The dual aspect concept in accounting explained.

This concept is the core of accounting. According to this concept, every business transaction has a dual aspect. This concept is explained in detail below:

The properties owned by a business enterprise are referred to as assets and the rights or claims to the various parties against the assets are referred to as equities. The relationship between the two may be expressed in the form of an equation as follows: read more

The money measurement concept in accounting explained.

The money measurement concept in accounting explained

Accounting records only those transactions which can be expressed in monetary terms.

The importance of money measurement concept is that money provides a common denomination by means of which heterogeneous facts about a business enterprise can be expressed and measured in a much better way. For e.g. When it is stated that a business owns TZS.1,00,000 cash, 500 tons of raw material, 10 machinery items, 3000 square meters of land and building etc., these amounts cannot be added together to produce a meaningful total of what the business owns. However, by expressing these items in monetary terms such as TZS.1,00,000 cash, TZS.5,00,000 worth raw materials, TZS,10,00,000 worth machinery items, and TZS .30,00,000 worth land and building – such addition is possible. read more

Labour Mix or Gang Composition Variance

Labour Mix or Gang Composition Variance

Labour Mix or Gang Composition Variance arises due to change in the actual gang composition than the standard gang composition. This variance shows to the management how much labour cost variance is due to the change in labour composition. read more

Revision question on IAS 10 NBAA May 2019

Mapato Ltd is one of your audit clients whose financial reporting year ends on 31st July. The financial statements are always due to be approved on 18th September each year. While reviewing the audit work for the financial year ended 31st July 2018 the following events have come to your attention: 1. On 2nd August 2018, Mapato sold inventory for a price which was less than its cost (the inventory was recorded in the financial statements to 31st July 2018 as closing inventory). 2. Mapato issued new shares on 3rd August 2018. 3. A fire in the warehouse destroyed all of Mapato’s inventory on 8th August 2018. 4. A major customer that owed Mapato TZS.150 million at 31st July 2018 was declared bankrupt on 10th August 2018. 5. Mapato purchased an asset for TZS.800 million on 21st August 2018. 6. On 27th August 2018, Mapato’s lawyer received a claim from an employee who fell on Mapato’s office premises on 1st March 2018. The Lawyer estimates the value of the claim, indicating legal fees, to be TZS.75 million. read more