Yearly Exam Tips UPDATED P2A

Debit Note

Issued by a customer to record the details of goods returned to a supplier.

Credit Note

Issued by a supplier to record the details of goods returned from a customer.

Accrual Concept

Revenues and expenses are recognized when earned or incurred, not when received or paid.

Consistency Concept

Accounting treatment of similar items must be consistent within and across accounting periods.

Materiality Concept

Determines the impact of an item's nature and size on a company's financial operations.

Partnership Agreement Issues

Include capital contribution, interest on capital and drawings, salaries to partners, and profit-sharing ratios.

Provision Recognition Conditions

Must have a present obligation, probable outflow of resources, and a reliable estimate of the obligation.

Returned Cheque Reasons

May include insufficient cash, wrong drawee's name, post-dated cheque, or stale cheque.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life.

Limited Company

A business structure in which the company’s profits or losses belong to its shareholders.

Bank Reconciliation Statement

A document that compares a company's bank account records with its accounting records.