Increment in non-current asset is basically the profit on revaluation. Profit on revaluation will always be shared based on the old profit sharing ratio, not the new one.
We do not have any information regarding the cost of disposed vehicle, its NBV, its accumulated depreciation or its profit/loss on disposal. So we have no other way to calculate the NBV which is why we assume it to be zero.
Hi can you explain something because I'm a little confused. In question 6 you said when it comes to the bank statement, debit is an overdraft and credit is the balance of the bank statement, but in question 20 you were saying that when bank says credit that means it's part of the liabilities as in a bank overdraft. I don't get how this makes sense
For question 6, we are referring to the balance shown in the bank statement. Whereas for question 20, we're talking about the balance shown in the financial statements. Those are two different things.
Liquid ratio, also known as quick ratio or acid-test ratio is a liquidity ratio. Liquidity ratios measure the ease with which a business can meet their financial obligation with the liquid assets available to them. Liquid assets refers to all the current assets minus the closing inventory (subtracting the closing inventory because in order to change the closing inventory into cash, we'll need to sell the inventories which is not possible in a very short span of time) and minus the prepaid expenses (subtracting the prepaid expenses since it cannot be converted into cash). In short, the liquid assets only include those assets which can be immediately converted to cash. I hope this helps you. If you want to view all of the ratios, it is given in the official CAIE site in the PDF for the syllabus of this course.
Overheads are the revenue expenditures which are recurring in nature whereas vehicle at cost is a capital expenditure which are non-recurring in nature. And we are trying to figure out the profit from the year which can be considered as the income statement. In income statement, we only record the revenue expenses, and in this case $1100 is repairs to vehicles which is a revenue expenditure. So this amount should be subtracted as overhead in the income statement in order to figure out the correct profit for the year.
Q13 21:56 why are we sharing the increment in non current assest value in the old profit sharing ratio and not the new one
Increment in non-current asset is basically the profit on revaluation. Profit on revaluation will always be shared based on the old profit sharing ratio, not the new one.
@@studywithprashnaoh ok thank you so much🙏
thank you so much for making this video!!! really helpful ❤
You're most welcome!
7:50 Q 5 why are we assming the NBV of part exchange to be zero??
We do not have any information regarding the cost of disposed vehicle, its NBV, its accumulated depreciation or its profit/loss on disposal. So we have no other way to calculate the NBV which is why we assume it to be zero.
Hi can you explain something because I'm a little confused. In question 6 you said when it comes to the bank statement, debit is an overdraft and credit is the balance of the bank statement, but in question 20 you were saying that when bank says credit that means it's part of the liabilities as in a bank overdraft. I don't get how this makes sense
For question 6, we are referring to the balance shown in the bank statement. Whereas for question 20, we're talking about the balance shown in the financial statements. Those are two different things.
31:22 can u explain what liquid acid test means a bit more in details
Liquid ratio, also known as quick ratio or acid-test ratio is a liquidity ratio. Liquidity ratios measure the ease with which a business can meet their financial obligation with the liquid assets available to them. Liquid assets refers to all the current assets minus the closing inventory (subtracting the closing inventory because in order to change the closing inventory into cash, we'll need to sell the inventories which is not possible in a very short span of time) and minus the prepaid expenses (subtracting the prepaid expenses since it cannot be converted into cash). In short, the liquid assets only include those assets which can be immediately converted to cash. I hope this helps you. If you want to view all of the ratios, it is given in the official CAIE site in the PDF for the syllabus of this course.
qn 9 point no 3 why it is subtracted? vehicle(at cost) a/c is also a expense isnt it? and what is overhead?
Overheads are the revenue expenditures which are recurring in nature whereas vehicle at cost is a capital expenditure which are non-recurring in nature. And we are trying to figure out the profit from the year which can be considered as the income statement. In income statement, we only record the revenue expenses, and in this case $1100 is repairs to vehicles which is a revenue expenditure. So this amount should be subtracted as overhead in the income statement in order to figure out the correct profit for the year.
So why you told in q24 that hourly pay is not overhead
As it is recurring and revenue exp it should be overhead
@@MunazzaEhtesham-ik7zbit is because that is direct labour and not overhead
why cheque is considered as asset and not capital in 2:33?
It is a reduction in asset since we would be paying out $7500. We are looking at Arnold's accounting equation.
THANKYOU SO MUCH 🩶
You're welcome!
Kindly please solve Feb March 2024 paper. Before 3 June please 🙏🙏
Hi, I have already uploaded that video.
Best🤌🏻
Thank you!