FRA exam today
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hey,
I'm not sure if i'm right but here's why i think it was 700.
The question said val took out items worth 350 for her personal use. This was debited to the purchases acnt.
now the correct entry for this would have been - cr purchases 350 and dr drawings) she didnt take out cash so the bank doesnt even come into it.
however the 350 was was sitting as a dr entry in the purchases and we know it should have been a credit. So you needed to cr purchases 350 to clear the wrong debit entry which was put in there, and then another 350 for the correct entry that should have been in there in the first place. So in total you were crediting the purchases acnt with 700. The double entry to that was in drawings so if you credited purchases 700 you had to debit drawings.
hope that helps clear up the 700 ( i did it this way, but not sure if im right, makes sense though)
I have done dr Drawings by 350 and cr Purchases by 350, but am now looking at your explanation and beginning to doubt myself :-).
I totally agree with your logic on cr Purchases 700, however, if you debit drawings by 700 that means she took out 700 worth of goods, which she did not.
It will be very interesting to find out the correct answer.0 -
hey,
I'm not sure if i'm right but here's why i think it was 700.
The question said val took out items worth 350 for her personal use. This was debited to the purchases acnt.
now the correct entry for this would have been - cr purchases 350 and dr drawings) she didnt take out cash so the bank doesnt even come into it.
however the 350 was was sitting as a dr entry in the purchases and we know it should have been a credit. So you needed to cr purchases 350 to clear the wrong debit entry which was put in there, and then another 350 for the correct entry that should have been in there in the first place. So in total you were crediting the purchases acnt with 700. The double entry to that was in drawings so if you credited purchases 700 you had to debit drawings.
hope that helps clear up the 700 ( i did it this way, but not sure if im right, makes sense though)
YEP that was what i did
i think the confusion comes because the question was worded " these items were charged"that why people thought about the bank/cash but actually if the items are for personal use the money to pay for this cannot come from the bank it has to come from the drawings....think about a partnership if one of the partners take items for personal use and the money used to pay for them is the bank it wouldnt be fair to the other partners ...hope i make sense
i do believe that the transaction to this was that the money paid for the goods came from the drawings....therefore you have cr 350 in drawings and dr 350 in purchases and therefore if you cr 700 purchases and dr 700 drawings it balances out ....0 -
HEllo jd09, I got the same fig 10123. But someone put 10213 so I was thinking I put the answer down in a big rush and put the fig otherway round. But it seems to be correct now as you got the same fig as well.
Thanks for ur comments.0 -
yep, i totally agree with you. I also assumed that if 350 was charged to the purchases it would have been a credit entry in the drawings, so made sense to debit drawings 700, i think the paper was designed to trick everyone in the wordings. Also if you noticed with that point of the purchases of 350 it didnt say that (no other enteries were made) coz with some of them it did clearly say it that no other enteries were made i.e with the disposal/part-exchange, thats why my bank was overdrawn.YEP that was what i did
i think the confusion comes because the question was worded " these items were charged"that why people thought about the bank/cash but actually if the items are for personal use the money to pay for this cannot come from the bank it has to come from the drawings....think about a partnership if one of the partners take items for personal use and the money used to pay for them is the bank it wouldnt be fair to the other partners ...hope i make sense
i do believe that the transaction to this was that the money paid for the goods came from the drawings....therefore you have cr 350 in drawings and dr 350 in purchases and therefore if you cr 700 purchases and dr 700 drawings it balances out ....
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i read the question as the goods that she took were charged to purchases when initially bought so i just debited drawings and credited purchases to remove the stock taken ? it didnt really specify that the drawings account had been touched. They are so misleading ! ! as someone else has said if you had debited drawings with £700 you debiting twice as much as they actually took ?0
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i read the question as the goods that she took were charged to purchases when initially bought so i just debited drawings and credited purchases to remove the stock taken ? it didnt really specify that the drawings account had been touched. They are so misleading ! ! as someone else has said if you had debited drawings with £700 you debiting twice as much as they actually took ?
Thats what I did, and everyone else in my class did the same.
I'm pretty sure the question was saying that she debited the amount to purchases instead of drawings, meaning that you had to credit purchases by £350 and debit drawings.
From Marga's answer, I can see how that works, however you are then debting drawings by twice as much.
Assuming Marga's theory is correct, and she took some items from her purchases for drawings the entry would be Dr Purchases, Cr Purchases (as she had done it incorrectly), meaning that the entry netted off against each other in the purchases nominal.
So, from that, we can then assume that only £350 needs to be deducted from purchases otherwise you are doubling up and reducing purchases by too much.
Hopefully this makes sense, I'm crap with wording!0 -
Both answers sound credible in their own way but as it didnt say which was the other account it was debited/credited to i think it just means stock that had been charged to purchases originally had been taken. How would they expect you to know whether the other account was bank or drawings or whatever so to me it sounds like no entries had been made.
if they had you wouldnt charge the item to purchases as you put it on the credit side (to reduce the purchase expense account) so thats why it didnt really make sense to double it.
dont worry about the wording mate im the same its easy to say it but when you have to type it or write it its not so easy. The examiner who reads my answers to the deprecation and section 1 written question will read my answer and think what the hell is he going on about !! i put the right answer but just wrote a load of garble trying to explain it !0 -
yep, i totally agree with you. I also assumed that if 350 was charged to the purchases it would have been a credit entry in the drawings, so made sense to debit drawings 700, i think the paper was designed to trick everyone in the wordings. Also if you noticed with that point of the purchases of 350 it didnt say that (no other enteries were made) coz with some of them it did clearly say it that no other enteries were made i.e with the disposal/part-exchange, thats why my bank was overdrawn.
x
hi missy ....i found their wording so so confusing sometimes ....i am a spanish speaker so sometimes it is difficult for me to understand
example
when it says "allowance was given" ...unless you had done some practice papers and know what it means by allowance it can be very misleading
"allowance was given to you?
"allowance was given to the person exchanged the equipment?
it is very confusing sometimes0 -
accounts boy
I also remember getting 10123, so am now convinced that is the right answer.
Both the T.B in section 1 and B.S in section 2 balanced, is this a clear enough indicator that all the sub questions were correct?0 -
FRA exam DEC 09accounts boy
I also remember getting 10123, so am now convinced that is the right answer.
Both the T.B in section 1 and B.S in section 2 balanced, is this a clear enough indicator that all the sub questions were correct?
Tommo
Yes, it means all sub questions are correct. Good luck0 -
hey marga, yeah i know what u mean, their wording was confusing, and by the way just to clear up the purchases question it did say that val took these items for her personal use, when it says that in the question you automatically know that she took items from the purchases acnt for her personal use i.e the second entry being drawings. Has nothing to do with bank, either way if we are wrong its only a carried forward error. xxhi missy ....i found their wording so so confusing sometimes ....i am a spanish speaker so sometimes it is difficult for me to understand
example
when it says "allowance was given" ...unless you had done some practice papers and know what it means by allowance it can be very misleading
"allowance was given to you?
"allowance was given to the person exchanged the equipment?
it is very confusing sometimes
xx0 -
that 'allowance' part is confusing... x0
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for this question, when i read the whole thing about 3times, i noticed that it had said at the top 'no enteries were made' so i assumed that even though the money was paid (2400) from the bank, the entry wasnt made in the ledger. So thats why i credited the bank 2400, and my bank was overdrawn, i can see your point too. I've seen that past paper your talking and i remembered doing it and the bank wasnt touched. Oh well either way, the normal ledgers that you need for a part exchange are always bank/cost/disposal/accum dep and dep. xwell i did the same as you on the PL ie added the two incomes
i took the 2400 paid for the new equipment from the equipments account not the bank althought it said it was paid from the bank
there was a past paper that did the same ie not used the bank so i just remembered this thats why my bank is not overdrawn....
i had at the end in the equipment account
DR 600+2400 =3000 cost of new equipment
CR 2100 +2400 which was the disposal of the first equipment and the money to go to the bank to paid for the second vehicle
Must say, they love confusing us !0 -
hey,well i did the same as you on the PL ie added the two incomes
i took the 2400 paid for the new equipment from the equipments account not the bank althought it said it was paid from the bank
there was a past paper that did the same ie not used the bank so i just remembered this thats why my bank is not overdrawn....
i had at the end in the equipment account
DR 600+2400 =3000 cost of new equipment
CR 2100 +2400 which was the disposal of the first equipment and the money to go to the bank to paid for the second vehicle
wasnt the disposal acnt meant to have the following enteries ;
DR - original cost of the vehicle being disposed (2100)
CR - Accum Dep of the vehicle being disposed (1575) not sure exactly on the fig
- Allowence which was given (600)
thats how we knew there was a profit on the disposal. (75)
my equipment cost acnt had the follwoing enteries;
DR - price paid for new equipment (2400)
DR - the allowance (600)
CR - the cost of the equipment being disposed (2100)
so my cr entry for that 2400 came from the bank, which is why i credited it,if i had credited the disposal acount with 2400 i wouldnt have got a profit of 75 i would have got a profit of 2475 not sure ive done it right now.
x0 -
hey,
wasnt the disposal acnt meant to have the following enteries ;
DR - original cost of the vehicle being disposed (2100)
CR - Accum Dep of the vehicle being disposed (1575) not sure exactly on the fig
- Allowence which was given (600)
thats how we knew there was a profit on the disposal. (75)
my equipment cost acnt had the follwoing enteries;
DR - price paid for new equipment (2400)
DR - the allowance (600)
CR - the cost of the equipment being disposed (2100)
so my cr entry for that 2400 came from the bank, which is why i credited it,if i had credited the disposal acount with 2400 i wouldnt have got a profit of 75 i would have got a profit of 2475 not sure ive done it right now.
x
I debited 3000 to equipment cost as that is the actual cost regardless of the part exchange given and will be the figure that we need to depreciate from. Completely messed up on the provisional doubtful debt figure on the balance sheet though!!
Really hope I've done enough to pass. Can't stand the thought of having to re-sit. If I can't do it now while it's fresh cos we are studying it I wouldn't stand a chance in June after we've moved on. Report writing looks exciting stuff - not!!0 -
does anyone know the unit for technician level thats continues on from unit 6?
x0 -
hey,
wasnt the disposal acnt meant to have the following enteries ;
DR - original cost of the vehicle being disposed (2100)
CR - Accum Dep of the vehicle being disposed (1575) not sure exactly on the fig
- Allowence which was given (600)
thats how we knew there was a profit on the disposal. (75)
my equipment cost acnt had the follwoing enteries;
DR - price paid for new equipment (2400)
DR - the allowance (600)
CR - the cost of the equipment being disposed (2100)
so my cr entry for that 2400 came from the bank, which is why i credited it,if i had credited the disposal acount with 2400 i wouldnt have got a profit of 75 i would have got a profit of 2475 not sure ive done it right now.
x
Missy i can be completely wrong ...i cannot remember if it said that no entries were made or not... i didnt credit the bank with the 2400 i credited the equipment account! because i thought about that past paper exam....
we'll see hopefully both of us have passed:)0 -
same here, i was just looking at the technician level units online and wanted to know which units follow on from unit 5/60
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i'm confused dont know what the best way is to go about this, should i enrol at a college or do it myself ... argh decisions lol0
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i am doing technician on my own gotta buy me the books and teach myself:)0
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lol i spoke to the one of the AAT advisors today on the phone, complained firstly about unit 6 exam and then asked what my options were incase i didnt make that unit. She was telling me that u can sit the unit computer based anytime during the year which was good to know, regarding technician i think i might just study it myself at home. Only problem is when im at home i get distracted and become lazy, dont want to work.
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hey when are you planing to start technician? maybe we can encourage each other?
i still have to to my unit 32 and unit 15 for intermidiate though0 -
i dont have any work outstanding for level 3, aww you havent done unit 15? or 32? i can help you with that if you need help, as ive completed that, i have some practise simulations for unit 15 if you want i scan them to u. I'm hoping to start technician asap, i've got the text book for MAC started reading the first chapter lol
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oh that would be so cool thanks .... i want to take the two exams for technician level on june DFS and MAC i will buy the books asap
as the simulations are done quarterly i hope to have them done by March 2010
Do unit 10 MSP project for September if possible and then the BTC and PTC on December 2010 ....
Hopefully by then i would have passed everything and will be an AAT Technician:)
which books did you follow?0 -
I thought I was bad putting my fugures up but you guys have over-analysed it to death!
For the record, I debited drawings 350 and credited purchases 350!
My other figs were:
For Q1, I got 81,610 for the trial balance totals
Q2; 8,738 for the adjustment column totals
27,513 for the net profit and 10,213 for the total net assets
Stock re-valuation £155 (£25 lower); gross profit down
Ben0 -
dieselhead wrote: »I thought I was bad putting my fugures up but you guys have over-analysed it to death!
For the record, I debited drawings 350 and credited purchases 350!
My other figs were:
For Q1, I got 81,610 for the trial balance totals
Q2; 8,738 for the adjustment column totals
27,513 for the net profit and 10,213 for the total net assets
Stock re-valuation £155 (£25 lower); gross profit down
Ben
i am a number freak what can i say?0 -
same here, i'm a number freak too, cant get them out of my head lol ive got the old kaplan book which says unit 8/9 but i think they have changed it now so im not sure which one we need to get, i checked the website and they dont have units 8/9 on there so they must have replaced it, i'l find out and let you know this book continues on from unit 6 at technician level.
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btw, the higher ur cost of sales are the lower the gross profit ur going to get. however if u reduce ur cost of sales ur increasing ur gross profit arent u?dieselhead wrote: »I thought I was bad putting my fugures up but you guys have over-analysed it to death!
For the record, I debited drawings 350 and credited purchases 350!
My other figs were:
For Q1, I got 81,610 for the trial balance totals
Q2; 8,738 for the adjustment column totals
27,513 for the net profit and 10,213 for the total net assets
Stock re-valuation £155 (£25 lower); gross profit down
Ben
x0 -
Hi Missy that works for the opening stock and the purchases because you are taking it from Sales , so the higher these two the less profit , the lower , the more profit
but closing stock is something that you add to sales to get your profit so the higher the better
Sales - Opening Stock -Purchases +Closing stock = Gross Profit0
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