ACCA PAKISTAN

Introduction to inventory and cost of goods sold: Inventory is merchandise purchased by merchandisers (retailers, wholesalers, distributors) for the purpose of being sold to customers. The cost of the merchandise purchased but not yet sold is reported in the account Inventory or  Merchandise Inventory Inventory is reported as a  current asset  on the company's balance sheet. Inventory is a significant asset that needs to be monitored closely.  Too much  inventory can result in cash flow problems, additional expenses (e.g., storage, insurance), and losses if the items become obsolete.  Too little  inventory can result in lost sales and lost customers. Cost of goods sold: Main types of C G S is 1:LIFO(Last in first out) 2:FIFO(First in first out) 3: Average

http://hi2sales.com Property, plant and equipment are tangible items that a: are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and  b: are expected to be used during more than one period. The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:  a: it is probable that future economic benefits associated with the item will flow to the entity; and  b: the cost of the item can be measured reliably. Measurement at recognition: An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost.         The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date.             If payment is deferred beyond normal credit terms, the difference between the cash price equivalent and the total payment is recognised as interest over the period of credit unless such i

Cash Flow Statement:-          I n Financial accounting cash flow statement  also known as statement of cash flow   financial statement  that shows how changes in balance sheet  accounts and income affect cash and cash   equivalent   , and breaks the analysis down to operating, investing, and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and cash out of the business. The statement captures both the current operating results and the accompanying changes in the balance sheet  As an analytically tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7), is the international   accounting standard  that deals with cash flow statements. People and groups interested in cash flow statements include:      Accounting personnel, who need to know whether the organization will be able to cover payroll and other immedia

The purpose of adjusting entries is to assign to each accounting period appropriate amounts of revenue and expense. For example, overnight auto service purchased shop supplies that will be used for several month. Thus an adjusting entry is required to record the expense associated with the shop supplies that overnight uses each month. Types of Adjusting Entries                            1: Converting asset to expense.                            2: Converting liabilities to revenue.                            3: Accruing unpaid expense.                            4: Accruing uncollected revenue.   Adjusting entries to convert asset to expenses result from cash being paid prior to an expense being incurred.   Adjusting entries to convert liabilities to revenue result from cash being received prior to revenue being earned.   Adjusting entries to accrue unpaid expenses result from expenses being incurred before cash is paid.   Adjusting entries to accrue uncollected revenue resu