PoA - Jan 2016 P2 Q7 - Solution | Trial Balance | Double Entry

[@garangabrahamakoy6504]

very good lecturer indeed

[@adapttuition]

My pleasure to be of service. Happy you are finding the material helpful!

[@animefanangie7bts]

what is members honoraria and suspense sir??

[@adapttuition]

Hi! Honoraria is money paid to the members who run/manage the cooperative. Sort of like a reward or compensation for their services. The suspense account is the account used to facilitate the correction of errors that affect the agreement of the trial balance.

[@animefanangie7bts]

Thank you very much sir @@adapttuition

[@adapttuition]

Happy to help! Keep up the good work 💪🏽🧠

[@maliquesam3.536]

Hi sir,is anything paid up front whether its 3 months or 6 months or a year always prepaid revenue and therefore a liability????

[@adapttuition]

Hi Malique, any revenue paid in advance of being earned regardless of how far in advance is a current liability (prepaid revenue).

[@alanaharrylal7691]

Good day sir. Is it necessary to balance off the accounts? In the May June 2019 (I think it was) they specifically asked to balance off and rule the bank account whereas in this question they just said to post the transactions. I was contemplating balancing them off as well but in the exam paper for the bank account there's just one row left so I'm thinking that they maybe they would have left more space if they wanted that. But can you let me know please? Also, for question 6(c), which you did in another video, if the interest on debentures decreases net operating profits then how come it isn't added in the appropriation account. I watched your video on appropriation accounts already but I'm wondering if I didn't catch something.

[@alanaharrylal7691]

When I say 'added' in the appropriation account, what I really mean is 'included'.

[@adapttuition]

Hi, Alana :) That's a very good question and your observation about the number of lines/space given in the t-account format on the question paper is quite astute. If they don't give you enough space and they don't specifically ask you to balance off the t-accounts then it isn't absolutely necessary to do so.

[@adapttuition]

With respect to the debenture interest and the appropriation account: Interest is an expense and should be included in the income statement (the expense section). It's not an appropriation and as such should not be included in the appropriation account. However, if the interest was not deducted prior to the appropriation account then we may show its deduction from Net Income prior to starting the appropriations. Hope that answers your question :)

[@alanaharrylal7691]

@@adapttuition thanks much once again!

[@adapttuition]

Happy to help

[@ethancolaco14]

I have a question: What does capital include? Some say fixed assets while others say all assets.

[@adapttuition]

Hi Ethan :) Capital is ANY resource that the owner contributes to the business. This include both current and non-current assets.

[@adanna.k.george5672]

sir why wasn't suspense added in the trial balance ?

[@adapttuition]

Hi :) A suspense account balance is included in the trial balance when the trial balance does not agree, i.e. when the trial balance does not balance. The trial balance presented in the question had errors where certain items were put in the wrong columns. As such, the trial balance would not have balances and a suspense account balance was inserted on the credit side to make it balance. In the solution I put each item in the correct column and since there were no other errors that would have caused the trial balance not to agree it balanced on its own and therefore the suspense account balance was no longer needed to make it balance. Feel free to check out my Error Correction playlist using this link kzbin.info/aero/PL9u_QIMhEllvNgNs2TjcOHjARtfMe5VVN There is a suspense account video in that list that you might find helpful :) Best of luck to you and thanks for watching!

[@adanna.k.george5672]

Ok sir thanks alot

[@adapttuition]

Hope it helps 😊

[@tshyasookram4458]

Thank you very much Sir!!

[@adapttuition]

You're most welcome! Happy to know you are enjoying and learning from the content. Keep up the good work. I believe in you :)

[@tshyasookram4458]

@@adapttuition Thank you Sir🙏🙏🙏

[@keiras.p3419]

Hi. one question why is the S. Sampson a/c going to the purchases ledger?

[@adapttuition]

Hi Keira :) We are purchasing goods on credit from S. Sampson. Thus S. Sampson is a creditor. And, a creditor's personal account goes in the purchases ledger.

[@keiras.p3419]

@@adapttuition oh makes sense thank you!!

[@adapttuition]

Happy to help, Keira 😊

[@krystelleharris6699]

Hey sir. How do I find the handouts on your website? Every time I look for them, I only see past papers.

[@adapttuition]

I definitely don’t have past papers on my website. www.adapttuition.com/downloads

[@krystelleharris6699]

@@adapttuition Well it was solutions to the past papers. I didn't see these though. Thanks.

[@adapttuition]

Happy to help 😊

[@aliyahmohammed2982]

hi sir, can you explain why interest earned is credited? 2:00

[@adapttuition]

Hi :) Interest earned is a revenue and revenues have credit balances. Hope that helps :)

[@aliyahmohammed2982]

​@@adapttuition thank u very much sir!

[@adapttuition]

Happy to help! 😊

[@aneeliabalraj713]

Hi sir! Love your videos, just one question, isn't the Furniture and Things a/c a Purchases Ledger since they are creditors?

[@adapttuition]

Hi! That's an interesting question. I usually use the purchases ledger for trade creditors only (creditors from whom we purchase stock on credit). Since equipment in this context isn't stock I didn't put the account of this creditor in the purchases ledger. Hope this helps :)

[@aneeliabalraj713]

@@adapttuition ohhh this makes sense, thank you sir! btw, your videos are lifesavers.

[@adapttuition]

If you take the purchases ledger control account into consideration as well, we use the purchases journal (which records only credit purchases of stock), the returns outwards journal (which records only outward returns of stock), and the cash book for total payments to creditors and discounts received in order to prepare the control account. This confirms that it's only for trade creditors.

[@adapttuition]

Thanks for watching! Glad you are liking and benefitting from the videos 😊

[@aneeliabalraj713]

@@adapttuition OHH yes! Thank you sir :)

[@heerakhan1584]

Question 2 please

[@adapttuition]

Question 2 has too many issues so I won’t be doing a solution until I sort out those issues. Even my teacher had trouble with it and the workarounds he did it would be a lot to explain so I’m going to tackle that eventually

[@youraccamavusa740]

thank you sir

[@adapttuition]

You're very welcome :) Thanks for watching! Keep up the good work! You got this :)

[@almasolomon8089]

Great vid sir

[@adapttuition]

Thanks for watching 😊 Keep up the good work!