Shortcomings of cost accounting
- Leads to duplication of work and may be a burden to the organisation.
- Unsuitable for uniform application as each industry operates under unique circumstances.
- It is not cost effective. Installation and operation of a cost accounting system requires huge
initial capital outlay.
- Stereotyped and mechanical since it involves filling in a large number of forms continuously,
unless modern systems are installed.
- Excessive estimation. Cost computation involves a large number of convention estimations,
arbitrary allocation of joint costs. No costs are exact and may give a misleading picture of the
organisation.
- Unsuitable for all purposes. The computation and presentation of particular costs depend on
the purpose for which the data is required.
- Failure to achieve targets may demoralize staff and erode their confidence.
marto answered the question on February 15, 2019 at 07:22
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Explain what 'integrated reporting' entails.
(Solved)
Explain what 'integrated reporting' entails.
Date posted:
February 15, 2019
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Answers (1)
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Explain the benefits that would accrue from the adoption of international public sector accounting standards (IPSASs) by governments and public entities.
(Solved)
Explain the benefits that would accrue from the adoption of international public sector accounting standards (IPSASs) by governments and public entities.
Date posted:
February 15, 2019
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Answers (1)
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The following information has been compiled by the Ministry of Finance for the fiscal year ended 30 June 2009:
(Solved)
The following information has been compiled by the Ministry of Finance for the fiscal year ended 30 June 2009:
Date posted:
February 15, 2019
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Answers (1)
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The International Public Sector Accounting Standards (IPSASs) are developed by the International Public Sector Accounting Standards Board (IPSASB) to enhance uniformity in the way...
(Solved)
The International Public Sector Accounting Standards (IPSASs) are developed by the International Public Sector Accounting Standards Board (IPSASB) to enhance uniformity in the way public sector organizations prepare their financial statements. The Board (IPSASB) is promoting the international adoption and application of these standards.
Required:
Highlight four challenges that the Board is facing in promoting the use of IPSASs.
Date posted:
February 15, 2019
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Answers (1)
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The following data has been collected from the Ministry of Trade and Commerce for the fiscal year ended 30 June 2010:
(Solved)
The following data has been collected from the Ministry of Trade and Commerce for the fiscal year ended 30 June 2010:
Required:
The following statements in accordance with IPSAS 1 (Presentation of Financial Statements):
i) Statement of financial performance for the year ended 30 June 2010.
ii) Statement of financial position as at 30 June 2010.
Date posted:
February 15, 2019
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Answers (1)
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The following summary of receipts and payments was extracted from the records of the Ministry of Finance for the fiscal year ended 30 June 2010.
(Solved)
The following summary of receipts and payments was extracted from the records of the Ministry of Finance for the fiscal year ended 30 June 2010.
Required:
The statement of comparison of budget and actual amounts for the fiscal year ended 30 June 2010 in accordance with International Public Sector Accounting Standard (IPSAS) 24 (Presentation of Budget Information in Financial Statements
Date posted:
February 15, 2019
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Answers (1)
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In the context of IPSAS 19 (Provisions, Contingent Liabilities and Contingent Assets), explain the meaning of the term 'constructive obligation'.
(Solved)
In the context of IPSAS 19 (Provisions, Contingent Liabilities and Contingent Assets), explain the meaning of the term 'constructive obligation'.
Date posted:
February 15, 2019
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Answers (1)
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In the context of IPSAS 23 (Revenue from Non-exchange Transactions), summarize five sources of revenue from non-exchange transactions recognized by this standard.
(Solved)
In the context of IPSAS 23 (Revenue from Non-exchange Transactions), summarize five sources of revenue from non-exchange transactions recognized by this standard.
Date posted:
February 15, 2019
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Answers (1)
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With reference to IPSAS 9 (Revenue from Exchange Transactions), summarize five conditions that must be satisfied before revenue from the sale of goods can be...
(Solved)
With reference to IPSAS 9 (Revenue from Exchange Transactions), summarize five conditions that must be satisfied before revenue from the sale of goods can be recognized.
Date posted:
February 15, 2019
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Answers (1)
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In the context of IPSAS 4 (The Effects of Changes in Foreign Exchange Rates), explain how exchange differences arising on monetary items are recognized.
(Solved)
In the context of IPSAS 4 (The Effects of Changes in Foreign Exchange Rates), explain how exchange differences arising on monetary items are recognized.
Date posted:
February 15, 2019
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Answers (1)
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With reference to IPSAS 26 (Impairment of Non-Cash Generating Assets):
i) Explain the meaning of ‘cash-generating assets’.
ii) Analyse the criteria that could be used to identify...
(Solved)
With reference to IPSAS 26 (Impairment of Non-Cash Generating Assets):
i) Explain the meaning of ‘cash-generating assets’.
ii) Analyse the criteria that could be used to identify ah asset that might be impaired.
Date posted:
February 15, 2019
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Answers (1)
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In the context of unethical management practices, discuss four incentives that could motivate the management of a business entity to manipulate the entity's financial statements...
(Solved)
In the context of unethical management practices, discuss four incentives that could motivate the management of a business entity to manipulate the entity's financial statements as well as the underlying supporting records.
Date posted:
February 14, 2019
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Answers (1)
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Pamoja group has-prepared the following draft statements of financial position as at 30 June:
(Solved)
Pamoja group has-prepared the following draft statements of financial position as at 30 June:
Date posted:
February 14, 2019
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Answers (1)
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The following trial balance relates to Ndovu Limited as at 31 March 2013:
(Solved)
The following trial balance relates to Ndovu Limited as at 31 March 2013:
Additional information:
1. The value of land in the trial balance is given as Sh.300 million. The buildings were revalued on 31 March 2013 at Sh.920 million. The estimated useful life of buildings was 20 years as at 1 April 2012. Depreciation on buildings is charged at 60% to cost of sales and 20% each to distribution costs and administrative expenses.
2. The company constructed its own plant at a total cost of Sh.240 million. The plant was brought into use on 1 October 2012 but its cost had not been capitalized. Instead, its cost had been included in the cost of sales. Plant is depreciated at 12.5% per annum using the reducing balance method (time apportioned) and charged to the cost of sales.
3. The fair value of the investments held at fair value was Sh.271 million as at 3 1 March 2013.
4. The balance of tax on the trial balance represents an overprovision of previous years" tax.
The estimate of tax for the current year is Sh.187 million. At 31 March 2013, there were Sh.400 million of taxable temporary differences. For deferred, tax assume an average tax rate of 30%.
5. The 2% loan note was issued on 1 October 2012 under the terms that require a large premium on repayment. The effective interest rate therefore is 6% per annum.
6. The suspense account relates to a rights issue of shares that was made on 1 January 2013. The terms of the issue were one share for every four held at Sh.8 per share. The par value of each share is Sh.5. The issue was fully subscribed.
Required:
Prepare the following statements in a format suitable for publication:
a) Statement of comprehensive income for the year ended 31 March 2013.
b) Statement of financial position as at 31 March 2013.
Date posted:
February 14, 2019
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Answers (1)
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The Kengo group has prepared the following financial statements for the years ended 31st March 2013 and 2012:
(Solved)
The Kengo group has prepared the following financial statements for the years ended 31st March 2013 and 2012:
Date posted:
February 14, 2019
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Answers (1)
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The following trial balance relates to Mapema Limited, a quoted company, as at 30 April 2013:
(Solved)
The following trial balance relates to Mapema Limited, a quoted company, as at 30 April 2013:
Required:
Prepare for publication purposes:
a) A statement of comprehensive income for the year ended 30 April 2013.
b) A statement of changes in equity for the year ended 30 April 2013.
c) A statement of financial position as at 30 April 2013.
Date posted:
February 14, 2019
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Answers (1)
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The following financial statements relate to the Crest group for the year ended 31 March 2013:
(Solved)
The following financial statements relate to the Crest group for the year ended 31 March 2013:
Date posted:
February 14, 2019
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Answers (1)
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The following are the group income statement and group statement or financial position of Soma group of companies, for the financial year ended 31 October...
(Solved)
The following are the group income statement and group statement or financial position of Soma group of companies, for the financial year ended 31 October 2013:
Date posted:
February 14, 2019
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Answers (1)
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Zeddy Limited is a company quoted at the securities exchange. The following trial balance was extracted from the books of the company as at 31...
(Solved)
Zeddy Limited is a company quoted at the securities exchange. The following trial balance was extracted from the books of the company as at 31 October 2014:
Date posted:
February 14, 2019
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Answers (1)
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Explain the meaning of the following terms as used in pension accounts
(i) Funded schemes.
(ii) Experience adjustments.
(Solved)
Explain the meaning of the following terms as used in pension accounts
(i) Funded schemes.
(ii) Experience adjustments.
Date posted:
February 14, 2019
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Answers (1)