CXC CSEC Principles of Accounts (POA) exam guide: Section 6: End of Period Adjustments
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CXC CSEC Principles of Accounts Exam Guide Section 6: END OF PERIOD ADJUSTMENTS
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SPECIFIC OBJECTIVES The students should be able to: |
CONTENT
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| 1. | Explain why adjustments are to financial statements; |
The reasons for adjustments; Application of the matching /accruals concept.
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| 2. | Prepare journal entries for pre-payments and advanced revenues; |
Journal entries for prepaid excuses and advanced revenues.
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| 3. | Prepare journal entries for accrued expenses and revenues; |
Journal entries for accrued expenses and revenues. |
| 4. | Determine the amount of expenses or revenues to be transferred to the Profit and Loss Account/Income Statement;
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Ledger accounts for expenses and revenues. |
| 5. | Indicate where accruals and prepayments will appear on the Balance Sheet; | The treatment for prepayments and accruals on the balance sheet.
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| 6. | Distinguish between bad and doubtful debts; |
The reasons for bad debts: aging debtors; Creation of provision for doubtful debts.
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| 7. | Prepare journal entries and ledger accounts to write off bad debts and create provision for doubt debts
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Accounting entries for bad and doubtful debts; The treatment of bad and doubtful debts in the Profit and Loss Account and Balance Sheet. |
| 8. | Explain the nature of depreciation;
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Definition of depreciation; Causes of depreciation; Factors to be considered when calculating depreciation (cost, estimated useful life and scrap value) |
| 9. | Calculate annual depreciation expenses using straight line method and reducing balance method; | Straight line method (useful formula) and reducing balance method of depreciation.
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Prepare journal entries and ledger accounts for provision for depreciation; |
Journal entries for the provision for depreciation; The maintenance of the provision for depreciation account; The treatment of accumulated depreciation on the Balance Sheet; The determination of Net Book Value (NVB).
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| 11. | Prepare Financial Statements after adjustments. |
The preparation of adjusted Financial Statements. |
principles of accounts
sitting poa may 2011