"LESS IS MORE"
TRUONG THI HANH DUNG
truongthihanhdung@uel.edu.vn
(+84)966724386
All rights reserved. Do not transfer without permission
CHAPTER 1:
1/Capital income (proceeds
from the sales of non current
assets) and revenue income
(income derived from normal
activities)
2/Capital expenditure
(INCREASE USEFUL LIFE &
CAPACITY OF FIXED ASSETS:
Dr NCA/Cr Cash) and revenue
expenditure (NOT INCREASE
USEFUL LIFE & CAPACITY OF
FIXED ASSETS: Dr EX/Cr Cash)
3/ Accounting assumptions and
underlying principles (accrual
basis, going concern, historical
cost, revenues recognition,
expenses recognition,
materiality....)
4/ IFAC and ICEAW Code of
Ethics (Integrity, Objectivity,
Professional competence and
due care, Confidentiality,
Professional behavior -
compliant, Life long practice)
CHAPTER 2:
1/ Chart of accounts (international)
2/ Debit and credit rules (assets, contra-assets,
liabilities, contra-liabilties, equity, contra-equity,
revenues, expenses) CHAPTER 4:
3/ Accounting equation: A = L + E 1/Control/Nom
4/ Set of statements - Sole traders, Partnerships and Personal/subsi
Corporations: 2/ Simple journ
- SCI (Statement of comprehensive income/Statement business (sales
of P&L-profit or loss/Income statement) inventories)
- Statement of changes in Equity (SCE) 3/Petty cash fu
- SFP (Statement of financial position/Balance sheet) 4/ Accounting
- CF statement (Cash flow statement) Cash discounts
- Notes to FSs (financial statements) discounts and t
5/ Accounting
- VAT account D
HMRC (other re
- VAT account C
HMRC (other p
CHAPTER 3:
1/ Source documents for trading business (sales,
purchases cycle) - Credit over Debit notes
2/ Petty cash fund (imprest system):
A/Dr Petty cash/Cr Cash:$1000
B/ AT THE END OF THE PERIOD: ACCOUNTANT
RECORDS: DR EXPENSES/CR CASH (TO
REIMBURSE THE FUND) 500 (ROOF: ALL THE
RECEIPTS OF PETTY CASH PAYMENTS MADE
DURING PERIOD)
C/ INCREASE OR DECREASE THE FUND:
DR PETTY CASH/CR CASH 500
DR CASH/CR PETTY CASH 200
3/ The payroll:
Gross pay to employees = PAYE (to HMRC) +
Employee’s NI (to HMRC) + Employee’s pension
contributions (to Pension trustees) + Net pay
(cash paid to employees)
Additional costs for the employers = Employer’s
NI contributions (to HMRC) + Pension
contributions (to Pension trustees)
TOTAL PAYROLL COST = GROSS PAY +
ADDITIONAL COSTS FOR THE EMPLOYERS
 CHAPTER 12: Pr
KEY POINTS CHAPTER 4: KEY POINTS CHAPTER 5: Simple process
VAT account
VAT due from HMRC (opening):£15,000
VAT input: VAT output:
Purchases (120,000 x 20%) = 24,000 Sales (500,000x20%)=100,000
Other expenes (70,000x20%) =14,000 Cash received = 12,000
Cash paid totalled = 40,000

93.000 112.000
19.000
UNDERLYING CONCEPTUAL FRAMEWORK CHAPTER 1:
LANGUAGE DIFFERENCES CHAPTER 1:
 A

CHAPTER 4:
1/Control/Nominal ledger accounts vs
Personal/subsidiary accounts: TP/TR
2/ Simple journal entries for trading
business (sales/purchases of
inventories)
3/Petty cash fund entries (imprest sys)
4/ Accounting for Trade discounts and
Cash discounts (record expected
discounts and then reverse if any)
5/ Accounting for VAT:
- VAT account Debit balance: Due from
HMRC (other receivables)
- VAT account Credit balance: Due to
HMRC (other payables)
CHAPTER 6:
1/ RECONCILIATION WITH EXTERNAL
DOCUMENTS (2 figures have to be the same)
*Bank reconciliation: Bank statement vs Cash
ledger
*TR reconciliation: Customer statement vs
Receivable ledger
*TP reconciliation: Supplier statement vs
Payable ledger
2/ Errors and correction: Your job is:
- Finding the errors
- Correcting errors (Writing entries: 3 steps:It
should be; It was; Correct entry)
- Suspense accounts back to 0
3/ Integrate the correcting errors entries into
TB and prepare simple FS.

CHAPTER 7:
1/ Accounting for Inventories inpu
cost = Cost = purchase price + Deli
+ Import taxes and duties + Conve
(labor and production overhead if
CHAPTER 5: 2/ Accounting for Inv output (costi
1/ Balancing off the ledger accounts (FINDING THE FIFO, WAC): Output cost = COS
ENDING BALANCES FOR EACH ACCOUNTS) 3/ Entries for Inv:
2/ Prepare Trial balance: Ledger/T-accounts/ arithmetical At the beginning of the year:
method. Dr COS / Cr Inventory (opening b
3/ If the trial balance fails to balance: Entries during the year
*Omission errors (sai bo sot): a transaction is completely Dr Purchases (SPL)/ Cr Cash or pa
omitted. The inventory account is not touch
*Commission errors (sai tai khoan): debit/credit in correct At the end of the year:
side, but to wrong accounts. Ex: Wages paid: Dr Rent a/c a/ Dr COS (SPL)/ Cr Purchases (SP
instead of Wages a/c. b/ Dr Inventory (SFP) (closing b/l)/
*Compensating errors (sai bu tru): one error is exactly ----> in combination:
cancelled by another error elsewhere. DR ENDING INVENTORIES (SFP)
*Errors of principles (sai nguyen tac hach toan): such as DR COS (SPL)
cash from receivables DR TR/Cr Cash instead of the other CR OPENING INVENTORIES
way round. CR DELIVERY INWARDS (IF AN
*Transposition error (sai hoan vi): for ex, instead of writing CR PURCHASES
$4,386, you transposed $4,836 4/Valuing inventorie: Valuation (a
period for ENDING INVENTORY) –
COSTS OR NRV
5/ Using Margin and Mark-up% to
selling price: Mark-up on cost; Ma
6/ Owner takes out Inv for person
Dr Drawings/ Cr COS
 5/ Using Margin and Mark-up% to
selling price: Mark-up on cost; Ma
6/ Owner takes out Inv for person
Dr Drawings/ Cr COS

R 12: Prepare FSs (international)

R 5: Simple process of FS presentation for sole trader: KEY POINTS CHAPTER 6:
BANK RECONCILIATION:
Note: Cash may have credit opening balance. This
ERRORS IN TRIAL BALANCE:

Examples:
 ACCOUNTING CFAB - A WRAP-
CHAPTER 8:
1/ Trade receivables = Accounts receivables + Note receivables +
other receivables: Dr TR/ CR Sales
2/ When you have troubles with collection of TR. Treatments
e same) would be:
vs Cash * Direct write off: Dr Irrecoverable debt ex/Cr TR
* Reflect the non-payment of debt risks:
nt vs At the end of X, set up allowances for TR:
Dr Irre debt ex/ Cr Allowances for receivables 1,000
vs At the end of X+1, increase allowances for TR to 1,200:
Dr Irre debt ex/ Cr Allowances for receivables 200
At the end of X+2, decrease allowances for TR to 800:
DR Allowances for receivables/CR Irre debt ex 400
steps:It 3/ * Presentation of TR on SFP:
Net Receivables (CA) = TR – Allowances for receivables
* Presentation of COST RELATED TO TR on SCI/SPL:
ries into Operating ex: - Irrecoverable debt ex X

CHAPTER 9: ACCRUALS AND PREPAYMENTS UNDER INTERNATIONAL P

PTER 7: 1/ Accrued expenses (Salaries, Insurance, Interest, Utilities, Rent..):
ccounting for Inventories input cost: Input At year end X1: DR Expense (SPL)/Cr Accruals (liability on SFP) : 400
= Cost = purchase price + Delivery inwards First day next year X2: Dr Accruals/Cr Expenses (but toan dao - reversi
port taxes and duties + Conversion costs The day of payment X2: Dr Expenses/Cr Cash: 1,000
or and production overhead if any) 2/ Prepayments (Insurance, Utilities, Rent...):
ccounting for Inv output (costing methods: The day of payment: Dr Expenses/Cr Cash (book full amounts): 1,000
O, WAC): Output cost = COS At year end: DR Prepayments (SFP)/Cr Expenses (decrease expenses): 4
ntries for Inv: First day next year: Dr Expenses/Cr Prepayments (reversing entries) (a
he beginning of the year: prepayments of last year becomes expenses of this year): 400
OS / Cr Inventory (opening b/l) ------------> All roads lead to Rome (the same results with the VAS,
ies during the year 3/ Accrued income (thu nhap don tich): da hoan thanh doanh thu, ch
urchases (SPL)/ Cr Cash or payables At year end: DR Accrued income (asset in the SFP) (138-other receiva
inventory account is not touched at all. CR Other income (SPL)
he end of the year: First day next year: Dr Receivables/Cr Accrued income (special case of
r COS (SPL)/ Cr Purchases (SPL) entries, use Receivables as intermediate account as it reflects the relati
r Inventory (SFP) (closing b/l)/ Cr COS customers)
in combination: Next year sales: Dr Receivables/Cr Sales
ENDING INVENTORIES (SFP) The day of receipts: Dr Cash/Cr Receivables (cash receipts for sales of l
COS (SPL) year)
CR OPENING INVENTORIES 4/Deferred income (thu nhap hoan lai/doanh thu chua thuc hien): nh
CR DELIVERY INWARDS (IF ANY) The day of receipts: Dr Cash/Cr Sales (full amounts)
CR PURCHASES At year end: Dr Sales/Cr Deferred income (unearned revenues) (a par
aluing inventorie: Valuation (at the end of First day next year: Dr Deferred income/Cr Receivables (special case of
od for ENDING INVENTORY) – LOWER OF entries, use Receivables as intermediate account)
TS OR NRV When finished all invoices: Dr Receivables/Cr Sales
sing Margin and Mark-up% to establish
ng price: Mark-up on cost; Margin on sales
Owner takes out Inv for personal use:
Drawings/ Cr COS
 When finished all invoices: Dr Receivables/Cr Sales
sing Margin and Mark-up% to establish
ng price: Mark-up on cost; Margin on sales
Owner takes out Inv for personal use:
Drawings/ Cr COS

ational) for Corporations - Accru

HAPTER 6: KEY POINTS CHAPTER 7:
e credit opening balance. This is the case when Co has Bank overdraft.
Note:
Delivery inwards: added to cost of purchases
Delivery outwards: is a distribution cost, included in stateme

Inv CO
15.000

98.000 X X
150 Loss o

18.000 18.000
200

PRODUCTION/MANUFACTU
Raw materials WIP
A -
B D D D

C
Production wages

E E E E
 PRODUCTION/MANUFACTU
Raw materials WIP
A -
B D D D

C
Production wages

E E E E

Production overheads
F
F F F

USING MARGIN AND MARK UP FOR CALCULATING SELLING P

A WRAP-UP
NTS UNDER INTERNATIONAL PRACTICE
e, Interest, Utilities, Rent..):
ruals (liability on SFP) : 400
penses (but toan dao - reversing entries) 400
Cash: 1,000
nt...):
h (book full amounts): 1,000
xpenses (decrease expenses): 400
ayments (reversing entries) (all the
ses of this year): 400
e same results with the VAS, US GAAP sys)
da hoan thanh doanh thu, chua nhan tien
in the SFP) (138-other receivables)
L)
crued income (special case of reversing
account as it reflects the relationship with
les (cash receipts for sales of last year and this
doanh thu chua thuc hien): nhan tien truoc
l amounts)
e (unearned revenues) (a part)
Cr Receivables (special case of reversing
account)
es/Cr Sales
CHAPTER 10: NCA (IAS 16, IAS 38, IAS 36)
1/ Compute cost of PPE (at acquisition date)
2/ Compute Depreciation/Amortisation during useful life:
* Straight-line method (use Depreciable amount = cost - residual
value/scrap value/salvage value)
* Unit of production(use Depreciable amount)
* (Double) Declining balance (start with Cost, end with Residual value)
Dr Depreciation ex/Cr Accumulated depreciation
3/ Subsequent expenditure after initial recognition:
*Capital expenditures (increase cost, useful life, capacity of PPE):
capitalise (plus to Cost of PPE )--> Dr PPE/Cr Cash
* REvenue expenditures (not increase cost, useful life, capacity of PPE
like repair ex): expense to P&L --> Dr Ex/ Cr Cash
4/ Impairment loss = carrying amount (giá trị còn lại = Cost - Acc Dep)
– recoverable amount (giá trị có thể thu hồi của TS) (IAS 36). Journal
Entry:
Dr Impairment loss (SCI)/ Cr NCA (SFP) or Acc Impairments
5/ Total expenses related to NCA on SCI = Depreciation expenses +
Amortisation ex + Impairment loss (PPE/Intangibles) + Revenue
expenditures
6/ Disposals, exchanges (trade-in) NCA and correct errors on NCA for
FS preparation
7/ Intangibles: Patents, Licences, (purchased) Goodwill
Note: Internal-generated Goodwill not recognised!
--> Dr Intangible/ Cr Cash
CHAPTER 11: ACCOUNTING FOR EQUITY, LIABILITIES, TAX, PROVISIONS, R
CORPORATIONS
1/ Corporation feature: limited liability to their owners (shareholders)
2/ Basic Equity of Corporations include:
* Share Capital (Ordinary/Preference) : Dr Cash (Receivables)/Cr Share Cap
* Share Premium: Dr Cash (Receivables)/ Cr Share Capital and Cr Share Pre
* REtained earnings: RE ending = RE opening + Net income - Dividends pay
* Other reserves
3/ Dividends: Always pay Dividends for Preference shares before Ordinar
* DAte of declaration: Dr RE/Cr Dividends payables
* Date of records: do nothing
* DAte of payments: Dr Dividends payables/Cr CAsh
4/ Preference shares:
7% $1 irredeemable preference shares $100,000: Equity account -->Prefer
$100,000 x7%=$7,000
7% $1 redeemable preference shares $100,000: NCL account --> Finance c
preference shares) = $7,000
5/ Right issues and Bonues issues: 1 (new) for 5 (old) rights/bonus issues
* Right issues: Dr Cash/ Cr SC (face/par value) and Cr SP (premium above
* Bonus issues: Dr Share Premium/ Retained earnings (Automatically take
RE, it would be detailed in the exam) and Cr Share Capital
6/ Liabilities:
Non-current liabilities: Debt securities: debentures, loan stock and bonds
Redeemable preference shares
Dr Cash/Cr NCL ----> Repayments: Dr NCL/Cr Cash
Remember accrue interest (on months-base) at the end of the period
kinds of NCL: Dr Interest expenses/ Finance cost
es/Cr Sales 5/ Right issues and Bonues issues: 1 (new) for 5 (old) rights/bonus issues
* Right issues: Dr Cash/ Cr SC (face/par value) and Cr SP (premium above
* Bonus issues: Dr Share Premium/ Retained earnings (Automatically take
RE, it would be detailed in the exam) and Cr Share Capital
6/ Liabilities:
Non-current liabilities: Debt securities: debentures, loan stock and bonds
Redeemable preference shares
Dr Cash/Cr NCL ----> Repayments: Dr NCL/Cr Cash
Remember accrue interest (on months-base) at the end of the period
kinds of NCL: Dr Interest expenses/ Finance cost
Cr Interest payable/ Accruals
Current liabilities:
*Provision: legal claim/legal cases; Warranties
* Income Tax liabilities: account for tax due on profits, and Any over-provi
in previous reporting periods is credited/debited in the current reporting p
Tax estimates: Dr Tax expense/Cr Tax payable
Tax payments: Dr Tax Payables/ Cr Cash
Over-provision of tax last year: Dr Tax payables/Cr TAx expenes
Under-provision of tax last year: Dr TAx expenes/ Cr Tax payables (account
----> Frequent question: How much Tax expenses on SPL and TAx payables
Using T accounts of Tax

- Accrual accounting
KEY POINTS CHAPTER 9:

Unearned revenues (cash

paid in advances)
Subscription Income Cash
E
A A C C

X?????
 Unearned revenues (cash
paid in advances)
Subscription Income Cash
E
A A C C

X?????

Cash paid in arrears

Subscription Income (RECEIVABLES) Cash
F
B B D D

Cash receipts for the year: C + D KNOWN

Income incurred: A+B KNOWN

of purchases
tion cost, included in statement of profit or loss.

COGS

X
Loss on Inv

18.000

ODUCTION/MANUFACTURING COMPANIES
WIP FINISHED GOODS COS
- H
D D D

X X
E E E
ODUCTION/MANUFACTURING COMPANIES
WIP FINISHED GOODS COS
- H
D D D

X X
E E E

F F
F I

FOR CALCULATING SELLING PRICE:

e:
esidual

esidual value)

of PPE):

pacity of PPE
ost - Acc Dep)
36). Journal

nts
on expenses +
venue

rs on NCA for

CHAPTER 13: CFS IAS 7

ABILITIES, TAX, PROVISIONS, REVENUES OF
1/ Accrual basis and Cash basis Accounting
2/ Classification and presentation: OCF
(direct/indirect method), ICF (direct method), FCF
(direct method) and Other notes
2/ US simple format for CFS
3/ International format for CFS

heir owners (shareholders)

ash (Receivables)/Cr Share Capital
Share Capital and Cr Share Premium
g + Net income - Dividends payables (if any)

ference shares before Ordinary shares.

ayables
Cr CAsh

,000: Equity account -->Preference dividend paid =

000: NCL account --> Finance cost (interest on

or 5 (old) rights/bonus issues

ue) and Cr SP (premium above par)
d earnings (Automatically taken from SP, If taken from
Cr Share Capital

entures, loan stock and bonds ; Bank loans ;

L/Cr Cash
ase) at the end of the period when you have any
e cost
 or 5 (old) rights/bonus issues
ue) and Cr SP (premium above par)
d earnings (Automatically taken from SP, If taken from
Cr Share Capital

entures, loan stock and bonds ; Bank loans ;

L/Cr Cash
ase) at the end of the period when you have any
e cost
uals

es
on profits, and Any over-provision or under-provision
bited in the current reporting period’s SPL.
e

les/Cr TAx expenes

enes/ Cr Tax payables (account)
enses on SPL and TAx payables/Accruals on SFP--->

KEY POINTS CHAPTER 10: DR NCA/ CR CASH

1/
Cost PPE = Purchase price + Delivery costs + Stamp duty and import duties (and irrecovera
cars) + Costs of preparing the site for installation and assembly of assets + Professional fee
legal fee and architects’ fee + Cost of testing whether the assets are functioning

2/ Disposals of NCA:

es (cash
es)
Cash

?????
es (cash
es)
Cash

????? 3/ Exchanges of NCA:

ears
S) Cash

4/ Research and Development costs on Intangibles:

* Research costs: Dr EX/Cr Cash
* Development costs: Dr Intangibles/Cr Cash (if qualified)

5/ Amortisation ex on limited useful life Intangibles:

Dr Amortisation ex/Cr Accum Amortisation
Note: Goodwill is unlimited useful life, so we don’t compute Amortisation of Goodwill
Instead, for Goodwill we have to test Impairment loss annually.
CHAPTER 14: FS format under UK GAAP
1/Country-GAAP is made up of:
• Accounting standards
• company law
• stock exchange requirements
• international financial reporting standards (IFRS).
2/ Statement of financial position format:
A=L+E
 E (residual interest) = A - L
Net assets = A - L
CHAPTER 15: Sole trader (1 own
1/ Sole trader FS example (1 ow
2/ Partnership agreement: Capit
3/ Loans from partners:
• The double entry when the loa
Dr Cash X
Cr Loan (liability) X
• The interest arising is treated a
• The double entry for the loan
Dr loan interest expense X
Cr Bank (if paid) X
or Cr Partner’s current a
4/ Changes in partnership's stru
Double entry for the cash that th
The partnership structure will al
5/ACCOUNTING FOR CHANGES
Step 1: Calculate the profits up t
Step 2: Approriate the profits aft
6/ Retirement or death of a par
• capital account balance
• current account balance
• share of any goodwill in the pa
 Accounting fo

KEY POINTS CHAPTER 11:

1/ Accounting for provision:
d import duties (and irrecoverable VAT on
mbly of assets + Professional fees, such as
ssets are functioning

2/ Accounting for Income tax:

 3/ Revenues guidelines for IFRS 15:

mortisation of Goodwill
HAPTER 15: Sole trader (1 owner) and Partnership (two or several owners/partners) FSs under UK GAAP
Sole trader FS example (1 owner, focus Equity section)
Partnership agreement: Capital; Interest on capital; Partners’ salaries; Profit-sharing ratio (PSR); Guaranteed minimum profit shares; Dr
Loans from partners:
The double entry when the loan is made is:
r Cash X
Cr Loan (liability) X
The interest arising is treated as a business expense which is charged to profits before the profits are shared between the partners
The double entry for the loan interest is:
r loan interest expense X
Cr Bank (if paid) X
or Cr Partner’s current account (if outstanding) X
Changes in partnership's structure:
ouble entry for the cash that the new partner brings into the partnership is: Dr Cash/ Cr New partner’ s capital account
he partnership structure will also change.
ACCOUNTING FOR CHANGES IN PARTNERSHIP STRUCTURE
ep 1: Calculate the profits up to the date of change and approriate them according to the old PSR.
ep 2: Approriate the profits after the date of change according to the new PSR
/ Retirement or death of a partner: When a partner retires from a partnership the full amounts due to him must be calculated, these being
capital account balance
current account balance
share of any goodwill in the partnership.
Accounting for Partnerships(Equity and profit share) - A

KEY POINTS CHAPTER 12:

1/ Reclassifications of Expenses and Income according to IAS 1 guidance:
2/ Steps to follow:

3/ EXAMPLES: CLICK TO SHEET 2 "EXAMPLE CHAP 12"

ed minimum profit shares; Drawings

between the partners

s capital account

must be calculated, these being:

ofit share) - Accrual accounting

KEY POINTS CHAPTER 14:

1/ Difference in terminology
KEY POINTS CHAPTER 15: