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MANAGEMENT ACCOUNTING

Co products – meaning and explanation.

Co products - meaning and explanation. meaning of co product

Co-products are a particular type of product but produced in different varieties. These products may not necessarily arise from the same operation or raw materials and may be produced in different quantities without any co-relation to the others according to the needs of the market. read more

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MANAGEMENT ACCOUNTING

Revision question on IASB conceptual framework ( capital maintainanance)

Managerial Accounting Revision Book Free Download

According to the IASB Conceptual Framework, the concept of capital maintenance is concerned with how an entity defines the capital it seeks to maintain. The concept of capital gives rise to financial capital maintenance and physical capital maintenance. The selection of the appropriate concept of capital by an entity should be based on the needs of the users of its financial statements. read more

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MANAGEMENT ACCOUNTING

Revision question on internal control and internal control deficiencies NBAA May 2019

Revision question on internal control and internal control deficiencies NBAA May 2019

Al-amry Co. ‘owns’ and operates an electric power station, which produces electricity 24 hours a day, seven days a week. The Company’s year end is 30th June.

You are an audit manager of Hickman & Associates, the auditors of Alamy Co. The interim audit has been completed and you are reviewing the documentation describing Al-amry Co’s payroll system. Payroll Systems notes Al-amry Co employs over 250 people and approximately 70% of the employees work in production at the power station. There are three shifts every day with employees working eight hours each. The production employees are paid weekly in cash. The remaining 30% of employees work at the head office in non-production roles and are paid monthly by bank transfer. The Company has a Human Resources (HR) Department, responsible for setting up all-new employees’ records. Pre-printed forms are completed by HR for all new employees and, once verified, a copy is sent to the Payroll Department for the employee to be included in the payroll for payment. This form includes the staff employees number and employees’ payroll cannot set up new department without this information. To encourage staff to attend work on time for all shifts, Al-amry Co. introduced a discretionary bonus, paid every three months, for production staff. The production supervisors determine the amounts to be paid and notify the Payroll Department. This quarterly bonus is entered into the system by a clerk and each entry is checked by a senior clerk for input errors prior to processing. The senior clerk signs the bonus listing as evidence of undertaking this review. Production employees are issued with clock cards and are required to swipe their cards at the beginning and at the end of their shift. This process is supervised by security staff 24 hours a day. Each card identifies the employee’s number and links it with the hours worked report produced by the payroll system, which automatically calculates the gross and net pay along with relevant deductions. These calculations are not checked. In addition to tax deductions from payroll, some employee’s wages are reduced for such items as repayments of student loans owed to the central government. All employers have a statutory obligation to remit funds on timely basis and to maintain accounting records which reconcile with annual loan statements sent by the government to employers. At Al-amry Co. student loan deduction forms are completed by the relevant employee and payments are made directly to the government until the employee notifies HR that the loan has been repaid in full. read more

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MANAGEMENT ACCOUNTING

Sales budget – meaning

Sales budget - meaning

Sales budget is one of the important functional budgets. Sales estimate is the commencement of budgeting may be made in quantitative terms. Sales budget is primarily concerned with forecasting of what products will be sold in what quantities and at what prices during the budget period. Sales budget is prepared by the sales executives taking into account number of relevant and influencing factors such as: read more