What is prime cost?
Prime cost is a sum of all the direct costs i.e. prime cost is the aggregate of all such costs that can be traced back to products (cost units) or cost centers. Thus prime cost means sum of direct material costs, direct labour costs and direct expenses. Direct material costs include cost incurred on material […]
Why capital account is not debited to record drawings?
When owner of the business withdraw funds or goods from the business, we do not debit capital account instead we open record these withdrawals in another account which is usually named as Drawings account. So, we record such transactions without disturbing capital account in drawings account. Drawings account is also a capital account as this […]
What is nominal ledger?
First of all students must not confuse the accounts with ledgers. These are two totally different things. Even though these terms are loosely used for each other but they are certainly not the same. Ledgers can be regarded as big registers where we write up and update different accounts. So, it means accounts are specific […]
What is the difference between negative assurance and positive assurance?
Positive assurance is a positive assertion or in other words when opinion is stated in “positive form”. On the other hand, negative assurance is simply an opinion expressed in negative wordings. We call negative assurances negative because of the sentence structure. Sentences that contain NOT in them are called negative sentences or negation But such […]
Why do we add back depreciation and interest income / expense in cash flow statements?
The answer to this question is hidden right in the word “indirect method”. When we prepare statement of cash flows using indirect method we have to use income statement to find out the cash flows indirectly from it. Now, we can understand that the basic purpose of Income statement or Trading and Profit & Loss […]
FIA | Foundations in Accountancy - Suit of qualifications by ACCA
Foundations in Accountancy is NOT just a new certification instead it is a whole new suit of qualifications all set to include Certified Accounting Technician (CAT) under its umbrella. This whole suit is subdivided into three certificates and a diploma. So here we are with yet another innovation of “ACCA LABS”, Foundations in Accountancy (FIA). […]
Is FIA equivalent to CAT in terms of value?
Since ACCA has launched the new suit of qualifications, much confusions are surrounding it. I must suggest that ACCA should write a whole student accountancy issue about it. Another problem is, ACCA has already issued FIA introductory document in addition to help available on ACCA website, but as the information is scattered, students are not […]
How long does it take to complete FIA?
In order to do ALL the qualifications under Foundations in Accountancy (FIA), a new suit of qualifications being offered by ACCA, you have to sit in exams for 9 papers. So it will be taking almost the same time as CAT. To know more about FIA and qualifications under it you can read an article […]
What is the difference between “Selling costs” and “Cost of Sales”?
“Cost of sales” if said in a phrase then it basically is, manufacturing cost of units sold in a particular period or simply cost. On the other hand “selling costs” include such costs that are incurred to make things available for sale. Important thing to understand here is that even after incurring cost of sales, […]
What are TT5 TT6 and TT7 subjects under FIA?
As we all know that FIA is about to replace CAT qualification completely and the move over will complete by the end of August for existing CAT students i.e. all current CAT students will be transferred to new suit of qualifications - Foundations in Accountancy (FIA). Since January 1, 2011 the registration under CAT qualification […]
