BULLETINS

I. MANUFACTURING ACCOUNTS
1. Manufacturing account includes only raw materials and is treated like
finished goods in the trading account or Work in progress on the total
cost of the manufacturing account..
2. Summarised manufacturing account starts with a prime cost and then
overheads.
3. Unrealised profits are provided for like depreciation and bad debts,
deducted from or added to POM in the income statement in order to be
prudent on the cost or net realisable valuation.
4. Marked up is Total X Mark up / (100+markup)
II. CLUBS AND SOCIETIES.
III.
1. A trading account is prepared for all other club activities like fundraisers and cafes
are netted and only the profit is added to incomes while the loss is added to the
expenditures.
2. Opening statement of affairs gives the Accumulated fund to use in the SOFP (don’t
forget to include opening bank balance).
3. Compile receipts & payments → bank account → adjust all accounts in OSOA →
prepare the financial statements.
4. At some point, subscriptions owing at the end of a period in context are written off as
an expense in the I & E if directed.
5. Other sources of income like donations, life membership and entrance fees could
are generally regarded as accumulated fund → special purpose fund or added to
the incomes.

THE PUBLISHED FINANCIAL STATEMENTS OF LIMITED COMPANIES

1. Limited companies must send to shareholders, debentures and anyone entitled a full
set of statutory account (IS, SOFP, SOC, SOCE, director’s and auditor’s reports )
2. Companies due to competition threats, are allowed to publish abridged accounts
3.
.
IAS 7 STATEMENTS OF CASH FLOW
1. Operating, Investing and financing as the order of cashflow activities.
2. Intangible non-current assets like goodwill can be amortised
3. Reducing profit without movement of actual cash is a cash inflow (Added back to
profit)
4. Increasing profit without movement of cash is a cash outflow.(Deducted from profit)
5.

INTERNATIONAL ACCOUNTING STANDARDS

1. Directors’ reports must contain activities, performance, dividends, directors, future
developments, donations, supplier’s policy and employee’s policy.
2. Notes aid users to understand statements by detailing summaries and key how items
were treated.
3. IAS1 Financial statements
 4. IAS 2 Inventories
5. IAS7 Cash Flows
6. IAS 8 requires that policies, errors used are included in notes
7. IAS!0 requires that changes after reporting be adjusted or not.
8. IAS 16 PPE - requires consistency and user understandability Leasehold is
depreciated but land isn’t.
9. IAS 36, Impairment occurs when the recoverable amount is less than the NBV.
10. IAS 37, notes should be made for users to understand provisions, contingent assets
and liabilities.
11. IAS 38 requires a distinction between capital expenditure in research of intangible
assets like copyrights, franchises, patents and revenue expenditures.
12. Social costs include pollution, workforce stress from lack of job security and new
technology, workforce pollution.

THE ROLE OF THE AUDITOR AND DIRECTORS.

1. Shareholders appoint directors and directors recommend auditors to the
shareholders.
2. An Auditor is a qualified accountant who examines a business' financial statements
by directors for consistency, true and fair view, verifies assets and liabilities and
concludes that accounts are reliable.
3. Auditor’s report has roles of the directors and auditors, Basis of opinion and opinion

BUSINESS PURCHASE AND MERGER

1. Purchase or merger could be a vertical or horizontal integration and the synergy can
be realised by the formed business through greater financial benefits like larger
market share, more skills, contracts, economies of scale, perception, profits, More
R&D, outreach and the diversification achieved.
2. Purchase consideration by a limited company for a purchase of a sole trade.
3. Revaluation is done on acquisition and capital accounts adjusted.
4. If more capital is required than in accounts, overdrafts are offered and treated as
cash and its equivalents
5. Purchase consideration is the capital for the new business and a payment for both
Current and fixed assets except cash .
6. Cash paid is taken off out of current assets.
7. Sale of two businesses to an ltd is same as for one and Once asked to close books
of accounts, should be dealt with separately from the opening of new accounts.
8. On acquisition of a partnership by a limited company, partners eat their cash privately
and more cash paid to them is taken out of the company’s bank or cash account and
if not enough, the remainder is a liability (Cash and its equivalents)
9. (PS) + Trade payables become an income in the realisation account if assumed by
the purchaser.
10. Goodwill is the Purchase Consideration less the value of Net assets if liabilities are
assumed.
11. Please do not forget to consider the share premium from the purchase consideration
incase par value exceeded.
 12. Once one limited company purchases shares from anotherr,Sellers books remain
unchange, Purchasor’s equity stays same, shares bought become NCA assets of the
purchaser and current assets are decreased by the purchase consideration.
13. if less than 50% IS BOUGHT, shares become current assets in the last year of
holding, if morethan 50% is bought, then it becomes a subsidiary company and
wholly owned if 100% paid.

14.

CONSIGNMENT ACCOUNTS
1. A consignee collects, stores and goods of a consignee who is only paid based on the
sale value and this value is collected by an agent who deducts his expenses and
commision payable.
2. During the transactions, a consignment(CR), GoC(CR), Bank., Consignee(),
PoC(CR) accounts are created.

JOINT VENTURES.
1. Two parties join resources for a transaction with each keeping their own books about
this encounter
2. A memorandum account is created to balance the whole transaction and each
member receives a share of the loss or profit depending on the pre-agreed ratios.
3.
IV. COMPUTERISED ACCOUNTING SYSTEM.
1.
2.
3.