Accounting Procedures

Worked examples (6)

• 1Classify items as capital or revenue expenditure (4 marks)
• 2Classify receipts as capital or revenue (4 marks)
• 3Classify tricky items: installation, legal fees and repairs (6 marks)
• 4Effect of treating revenue expenditure as capital expenditure (5 marks)
• 5Classify expenditure and explain misclassification effects (10 marks)
• 6Capital expenditure treated as revenue: correct the profit and assets (8 marks)

Model answers (6)

• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 evaluation (AO3) style
• ✓Model answer — Paper 2 structured/analysis style

Worked examples (6)

• 1Classifying accruals and prepayments on the SFP (2 marks)
• 2Calculating the income statement charge with an accrual (2 marks)
• 3Rent account with an accrual and SFP treatment (6 marks)
• 4Insurance account with a prepayment and SFP treatment (6 marks)
• 5Expense account with both an opening and a closing accrual (7 marks)
• 6Accrued income and income received in advance (8 marks)

Model answers (6)

• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 evaluation (AO3) style
• ✓Model answer — Paper 2 analysis/interpretation style

Worked examples (6)

• 1Calculate straight-line depreciation (2 marks)
• 2One year of reducing-balance depreciation (2 marks)
• 3Reducing-balance over three years (5 marks)
• 4Prepare the provision for depreciation account (5 marks)
• 5Compare straight-line and reducing-balance methods (6 marks)
• 6Disposal account with profit on disposal (10 marks)

Model answers (6)

• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 analysis style
• ✓Model answer — Paper 2 evaluation style
• ✓Model answer — Paper 2 evaluation (AO3) style

Worked examples (6)

• 1Identify the correct treatment (2 marks)
• 2Write off an irrecoverable debt (3 marks)
• 3Recovery of a debt previously written off (4 marks)
• 4Create a provision and show receivables net on the SFP (5 marks)
• 5Provision account over three years: increase then decrease (8 marks)
• 6Write-off, recovery and provision in one year (8 marks)

Model answers (6)

• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 analysis style
• ✓Model answer — Paper 2 evaluation (AO3) style

Worked examples (6)

• 1Apply the lower of cost and NRV rule to one inventory line (2 marks)
• 2Determine the cost of inventory (2 marks)
• 3Apply lower of cost and NRV item-by-item across three lines (6 marks)
• 4Value closing inventory using FIFO and AVCO (10 marks)
• 5Effect of overvaluing closing inventory on profit (6 marks)
• 6Two-year effect of an understated closing inventory (8 marks)

Model answers (6)

• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 1 short-answer style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 structured style
• ✓Model answer — Paper 2 evaluation (AO3) style
• ✓Model answer — Paper 2 analysis/interpretation style