For a moment i felt like giving up on accounting came you i should say im pleased and thank god for u Im writing accounting monday and was not prepared but now all is goof
Hi Sir, I would like to know why we subtract (purchases and opening inventory) and add closing inventory? I thought we're adding both opening inventory and purchases and subtract closing inventory.(3:30 - 5:20) or am I confused by the brackets placed?
Hi, yes I think the brackets are throwing you off. Consider that since both opening stock and purchases are both negative then we add them together and that closing stock being positive would then move the calculation in the opposite direction. This is something that’s “left over” from when i was learning accounts and was taught that we transfer items to the income statement using double entry (closing entries). Opening stock and purchases are debit items and since the income statement is sort of a revenue account, then both of those items are negative items in that account. The closing stock being positive is simply due to the double entry required for that item.
Hi :) Transportation-in (also known as carriage inwards) is added to purchases. This is of course provided that it is transportation on goods that were purchased. Carriage outwards is an expense and is placed in the expense section of the income statement.
Yo! So an income statement is the financial statement that shows the revenue earned and the expenses incurred (in creating the revenue that was earned) in a financial period. Accounts payable is a liability Accounts receivable is an asset Capital is … well, capital (neither revenue nor expense) And Drawings is a reduction in capital, again neither revenue nor expense. So that’s why those those items don’t go in the income statement. They go in the balance sheet 👍🏽😊
Hi Andrew 😊 Usually they tell you which is which outright. However, in the trial balance discount allowed has a debit balance because it is an expense, and discount received has a credit balance as it is a revenue.
Sir what about a question with work in progress at the start of a period and incompleted work at the end of period do we treat it as the way we do with opening and closing stock
Yes, we can have three (or more) inventory (stock) items at the start and/or at the end of the period: Raw materials, work in progress, and finished goods.
Hi! Carriage inwards is the delivery charge on purchases coming in. So we add that to the cost of purchases as it is a necessary cost to acquire the goods. Carriage outwards is also a delivery expense when we pay for goods to be delivered to the customers. Sales is a revenue. We don’t add expenses to revenue. But I understand why you asked that question. You saw a pattern and that’s a good thing. It just turned out that the pattern you saw wasn’t exactly working the way you thought. But that’s alright! It happens in the learning process and it shows you are thinking. Keep it up!
Shaniel Walsh let me take a look and get back to you 😊 You can always type the time like 11:05 and that way I can click on it and go directly to that part of the video so I can see exactly what you are talking about 😁
You can take a look at 07:41 (click on the time) to see the full explanation of the working of the depreciation expense of $1,105. If you still disagree please put your calculation and rationale and we can discuss. 😊
You are supposed to deal with the brackets first that is 7900-3480= 4420. Then you find 25% of 4420 which is 1105. Your mistake is that you finding 25% of 7900 which is 1975, from that and for the mistake you are saying 3480-1975 which is how you are getting $1505, that not correct
Hi @tjay5967 :) We need the total of what was paid and what was still owed/outstanding to find out the total amount of the expense that was INCURRED for the year. That figure (the amount incurred) is what goes in the expense section in the income statement. Hope that helps.
Jonathan Rampersad, you’re welcome. I will be doing balance sheets early next as I have a few things already planned to do before 2019 is out. What other topics are you interested in seeing videos for?
Hey :-) I looked through the video and didn't see the 75-8526 figure. Can you type the time from the video where you are seeing that figure? Thanks :-)
question sir , if there is a note that states that the owner took goods worth for example 5500 each monthly commencing October 1 2020 until march 31 2021 which was not previously recorded how would you approach it or what would it affect. where on the income statement would it go
Hi, so that’s 6 months worth of drawings. It would definitely affect the closing stock but other than that it wouldn’t go in the income statement as it’s not an expense. It would go in the capital section in the balance sheet.
another question so in the additional notes it says kadje rented an office space to jevan for the entire year at 8000 per month and in the balance sheet it says rent received from jevan 84000 how would you approach this adjustment
If the rent is $8,000 per month and there are 12 months in a year that means we earned $96,000 in rent revenue. However, if we only received $84,000 then it means $12,000 is still outstanding or accrued. Thus we will have a $12,000 figure for accrued revenue in the balance sheet
Hi Tamara 😊 A mortgage is a long term loan, so it’s classified as a non-current liability. Mortgages are taken for big purchases such as land or other huge investments and are paid back over long periods of time like 20-50 years So the for the borrower it’s a non-current liability.
Hi, I do have depreciation under the expense section in the income statement. If you're referring to the provision figure from the Trial Balance, that does NOT go in the income statement. That's the previous years' depreciation charges that have been totaled and brought forward. Might I suggest taking a look at the video I did where i prepare income statements adjusting ONLY for the provision for depreciation. I explain this specific item there.
Hi! You can check out the playlist that this video is part of and you'll find the video that you're asking about. I use the method that the syllabus I teach suggests but there is an alternative method. So be sure what you see in the video is the one that's appropriate for you.
Hey, Rayshaad! Thanks for your question. The receivables and payables are asset and liability respectively and as such will go in the balance sheet (statement of financial position) and not the income statement. The income statement shows the revenues earned and expenses incurred in a financial period. Therefore receivables and payables would not go in an Income Statement. Hope that helps. If you have anymore questions please feel free to let me know.
For a moment i felt like giving up on accounting came you i should say im pleased and thank god for u Im writing accounting monday and was not prepared but now all is goof
Happy to hear that my friend :)
Glad you found the content helpful!
Keep up the good work and best of luck on Monday!
Hi Sir, I would like to know why we subtract (purchases and opening inventory) and add closing inventory? I thought we're adding both opening inventory and purchases and subtract closing inventory.(3:30 - 5:20) or am I confused by the brackets placed?
Hi, yes I think the brackets are throwing you off. Consider that since both opening stock and purchases are both negative then we add them together and that closing stock being positive would then move the calculation in the opposite direction.
This is something that’s “left over” from when i was learning accounts and was taught that we transfer items to the income statement using double entry (closing entries).
Opening stock and purchases are debit items and since the income statement is sort of a revenue account, then both of those items are negative items in that account.
The closing stock being positive is simply due to the double entry required for that item.
Noted, thanks
Happy to help 😊
why when you used the straight method in the depreciation of the fixtures , fittings and equipment
you had to incorporate the date in order to get 389
Sir thank you i finally found it,,,,Now back in my university they will call me engineer :)
Glad you found it :) where are you from?
@@adapttuition Tanzania,, it's in Africa
@@Xokingm, ok, thanks for watching :) I will be doing a video on depreciation within the coming months.
@@adapttuition Thanks sir, i will appreciate it
Great job as usual....really helpful
Ryan Khallie thanks! When are you sitting PoA? Also, what other topics would you like to see video for?
hello, is transportation inwards added to purchases?, where is carried outwards placed in the income statement
Hi :) Transportation-in (also known as carriage inwards) is added to purchases.
This is of course provided that it is transportation on goods that were purchased.
Carriage outwards is an expense and is placed in the expense section of the income statement.
oky thanks
Happy to help 😊
Kindly do an examples where your not given sales figure but ur given receivables and payables putting the first example in mind
good day to you sir why are we not supposed to include capital, accounts payable and accounts receivable in the income statment
sorry i forgot one thing why dont we include drawings
Yo! So an income statement is the financial statement that shows the revenue earned and the expenses incurred (in creating the revenue that was earned) in a financial period.
Accounts payable is a liability
Accounts receivable is an asset
Capital is … well, capital (neither revenue nor expense)
And Drawings is a reduction in capital, again neither revenue nor expense.
So that’s why those those items don’t go in the income statement.
They go in the balance sheet 👍🏽😊
what is the reason for multiplying by a quarter
Hi, could you reply to this and type the time in the video where you see that happening? I’ll be glad to take a look and answer your question 😊
What if the accruals and prepayments have dates
The dates should be taken into consideration 👍🏽😊
sir can u explain how u know which one is discount allowed and discount received ?
Hi Andrew 😊
Usually they tell you which is which outright.
However, in the trial balance discount allowed has a debit balance because it is an expense, and discount received has a credit balance as it is a revenue.
@@adapttuition thank you 🙏🙏
@AndrewWilliams-pp2gn happy to help! What other questions did you have?
Sir what about a question with work in progress at the start of a period and incompleted work at the end of period do we treat it as the way we do with opening and closing stock
Yes, we can have three (or more) inventory (stock) items at the start and/or at the end of the period: Raw materials, work in progress, and finished goods.
Thank you sir
I have a question, you have to add carriage inwards to purchases right? So what about carriage outwards? Should we add them to sales?
Hi! Carriage inwards is the delivery charge on purchases coming in. So we add that to the cost of purchases as it is a necessary cost to acquire the goods.
Carriage outwards is also a delivery expense when we pay for goods to be delivered to the customers.
Sales is a revenue.
We don’t add expenses to revenue.
But I understand why you asked that question.
You saw a pattern and that’s a good thing.
It just turned out that the pattern you saw wasn’t exactly working the way you thought.
But that’s alright! It happens in the learning process and it shows you are thinking.
Keep it up!
U still have classes on Monday and Wednesday??
Yes, I do 👍🏽😊
Am interested
Email me chris@adapttuition.com
sir the part in the less expense section that said depreciation on motor vehicle, shouldn't the answer be 1505 instead 1105?... just curious
Shaniel Walsh let me take a look and get back to you 😊
You can always type the time like 11:05 and that way I can click on it and go directly to that part of the video so I can see exactly what you are talking about 😁
You can take a look at 07:41 (click on the time) to see the full explanation of the working of the depreciation expense of $1,105.
If you still disagree please put your calculation and rationale and we can discuss. 😊
You are supposed to deal with the brackets first that is 7900-3480= 4420. Then you find 25% of 4420 which is 1105. Your mistake is that you finding 25% of 7900 which is 1975, from that and for the mistake you are saying 3480-1975 which is how you are getting $1505, that not correct
Good explanation
Sir why did you add miscellaneous expenses paid to the miscellaneous owed if it had been paid
Hi @tjay5967 :)
We need the total of what was paid and what was still owed/outstanding to find out the total amount of the expense that was INCURRED for the year.
That figure (the amount incurred) is what goes in the expense section in the income statement.
Hope that helps.
Thank you so much. Could please go through balance sheet, please
Jonathan Rampersad, you’re welcome. I will be doing balance sheets early next as I have a few things already planned to do before 2019 is out. What other topics are you interested in seeing videos for?
Thanks for the response
A Different Approach Tuition Limited past paper questions on accounting ratios 😬
Definitely gonna tackle that in the new year
Sir how you get the 75 -8526 i din't understand
Hey :-)
I looked through the video and didn't see the 75-8526 figure.
Can you type the time from the video where you are seeing that figure?
Thanks :-)
question sir , if there is a note that states that the owner took goods worth for example 5500 each monthly commencing October 1 2020 until march 31 2021 which was not previously recorded how would you approach it or what would it affect. where on the income statement would it go
Hi, so that’s 6 months worth of drawings. It would definitely affect the closing stock but other than that it wouldn’t go in the income statement as it’s not an expense. It would go in the capital section in the balance sheet.
another question so in the additional notes it says kadje rented an office space to jevan for the entire year at 8000 per month and in the balance sheet it says rent received from jevan 84000 how would you approach this adjustment
If the rent is $8,000 per month and there are 12 months in a year that means we earned $96,000 in rent revenue. However, if we only received $84,000 then it means $12,000 is still outstanding or accrued. Thus we will have a $12,000 figure for accrued revenue in the balance sheet
@@adapttuition thank you so much for your help and very fast response really appreciate it
Happy to help 😊
You caught me at a good time but now I’m heading home for the evening.
Have a good night yourself 😊
hi. Where would mortgage go and why?
Hi Tamara 😊
A mortgage is a long term loan, so it’s classified as a non-current liability.
Mortgages are taken for big purchases such as land or other huge investments and are paid back over long periods of time like 20-50 years
So the for the borrower it’s a non-current liability.
Okay thx you sm for the quick response
You’re welcome 😊
I have problem I additional information especially depreciation
Hi Rafael :)
Did you check the other income statement tutorials that deal specifically with depreciation?
Hi sir, can you please share for me those questions in softcopies?
I am understanding your explaination very well. God almighty protects you.
Thanks.
Happy to hear you’re finding the content helpful! Thanks for watching. Keep up the good work.
Where are the balance sheet videos?😭😭
They’re coming 😊
Good afternoon sir, for the jan 2019 paper why would you we not include provision for dep'n under expenses?
Hi, I do have depreciation under the expense section in the income statement. If you're referring to the provision figure from the Trial Balance, that does NOT go in the income statement. That's the previous years' depreciation charges that have been totaled and brought forward.
Might I suggest taking a look at the video I did where i prepare income statements adjusting ONLY for the provision for depreciation.
I explain this specific item there.
Thanks sir, do you do CAPE as well?
Hey, Shareida, yes I do teach CAPE Accounting. Are there any topics you'd like to see videos for?
@@adapttuition yes, adjustments to trial balances and statements of financial postion. Thanks so much for the videos😊😊
shareida Brathwaite those will probably come early next year as I already have a list of items to complete for 2019. So be sure to look out for them.
Hello sir I hope you're doing well
My quiz is how is allowances given due to bad debts treated in the preparation of income statement
Hi! You can check out the playlist that this video is part of and you'll find the video that you're asking about. I use the method that the syllabus I teach suggests but there is an alternative method. So be sure what you see in the video is the one that's appropriate for you.
Sir in the 2019 Jan Paper what happened to the receivables and payables?
Hey, Rayshaad! Thanks for your question. The receivables and payables are asset and liability respectively and as such will go in the balance sheet (statement of financial position) and not the income statement. The income statement shows the revenues earned and expenses incurred in a financial period. Therefore receivables and payables would not go in an Income Statement.
Hope that helps. If you have anymore questions please feel free to let me know.
Thank you can you do some trial balance?
Hi, if you take a look at the videos i released between March and May you'll see a few questions with Trial Balance in them.
why did u multiply by a quater
See my above comment 😊
sorry sir i just saw your messages
No worries David 😊
great video!!!
Farnaz Nizaam thanks 😊 I am happy you found it helpful. Was there any part you found was really good or any part you found could have been better?
@@adapttuition everything was fully clear...great job!!
Thanks You...very helpful
what happen to the balance sheet sir???
You’re very welcome! Where are you from and when are you sitting PoA?
Farnaz Nizaam this video focuses on Income Statements so I didn’t do the balance sheet. I’ll try to organize that a bit later on.
@@adapttuition ok....Thanks
@@adapttuitionGuyana. A student who will be writing CXC this year
it was the second question sir