Accounting process till Rectification of Error

The latter half of the CA CPT chapter “Accounting Process” tests your understanding of the accounting process and deals with rectification of accounting entries. It includes a discussion on capital and revenue items as well as contingent assets and liabilities.

CA CPT Exam  

With Sheela Warrier.Duration:3hrs 51min 

Capital & Revenue ,Contingent & Rectification of Error Duration (min:sec)
Capital & Revenue   
{modal https://www.youtube.com/embed/sfMOe1UegTM?autoplay=1;rel=0|width=780|height=439|title=Introduction}Introduction{/modal} 04:39
{modal https://www.youtube.com/embed/D4duGWzqAV4?autoplay=1;rel=0|width=780|height=439|title=What is Capital & Revenue Expense}What is Capital & Revenue Expense{/modal} 14:45
{modal https://www.youtube.com/embed/7VmS9NY6JXA?autoplay=1;rel=0|width=780|height=439|title=Implication of Wrong Recording}Implication of Wrong Recording{/modal} 04:29
{modal https://www.youtube.com/embed/VP3NxHpTNuE?autoplay=1;rel=0|width=780|height=439|title=Deferred Revenue Expense}Deferred Revenue Expense{/modal} 04:59
{modal https://www.youtube.com/embed/2BV_1HMPtsc?autoplay=1;rel=0|width=780|height=439|title=Example}Example{/modal} 10:24
{modal https://www.youtube.com/embed/Y4PsfQaZ_Rs?autoplay=1;rel=0|width=780|height=439|title=Conclusion Revenue vs. Capital Expense}Conclusion Revenue vs. Capital Expense{/modal} 04:20
{modal https://www.youtube.com/embed/DbKVy4P_tC0?autoplay=1;rel=0|width=780|height=439|title=Revenue & Capital Receipt}Revenue & Capital Receipt{/modal} 05:14
{modal https://www.youtube.com/embed/VxxV5unejxU?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 11:23
{modal https://www.youtube.com/embed/Ic4qJzdpmEc?autoplay=1;rel=0|width=780|height=439|title=Conclusion}Conclusion{/modal} 07:26
Contingent Asset & Liability  
{modal https://www.youtube.com/embed/H0qzglS1sek?autoplay=1;rel=0|width=780|height=439|title=Introduction}Introduction{/modal} 01:36
{modal https://www.youtube.com/embed/68jRJKfetcw?autoplay=1;rel=0|width=780|height=439|title=Contingent Asset}Contingent Asset{/modal} 04:08
{modal https://www.youtube.com/embed/JbdqKTeIkFc?autoplay=1;rel=0|width=780|height=439|title=Contingent Liability}Contingent Liability{/modal} 04:27
{modal https://www.youtube.com/embed/KyY1w6csLV8?autoplay=1;rel=0|width=780|height=439|title=Example}Example{/modal} 13:50
{modal https://www.youtube.com/embed/VFMylMvo_Fw?autoplay=1;rel=0|width=780|height=439|title=Recap}Recap{/modal} 04:07
{modal https://www.youtube.com/embed/3zLbwf940Sc?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 01:28
Rectification of Error  
{modal https://www.youtube.com/embed/_niSk2leKQk?autoplay=1;rel=0|width=780|height=439|title=Introduction }Introduction {/modal} 04:19
{modal https://www.youtube.com/embed/_LPQsl1BFeA?autoplay=1;rel=0|width=780|height=439|title=What is Rectification of Error}What is Rectification of Error{/modal} 05:17
{modal https://www.youtube.com/embed/MlMCMjx3ORs?autoplay=1;rel=0|width=780|height=439|title=When do error occur}When do error occur{/modal} 19:20
{modal https://www.youtube.com/embed/M3D3Tapk-WI?autoplay=1;rel=0|width=780|height=439|title=Types of Error}Types of Error{/modal} 10:59
{modal https://www.youtube.com/embed/cWRV_DU6_Dk?autoplay=1;rel=0|width=780|height=439|title=Quiz}Quiz{/modal} 02:09
{modal https://www.youtube.com/embed/OR9gb5XEPQQ?autoplay=1;rel=0|width=780|height=439|title=When is error detected}When is error detected{/modal} 03:36
{modal https://www.youtube.com/embed/XNCAhOTjt00?autoplay=1;rel=0|width=780|height=439|title=Error detected before TB}Error detected before TB{/modal} 19:18
{modal https://www.youtube.com/embed/V51SGyyDGWs?autoplay=1;rel=0|width=780|height=439|title=Error detected after TB}Error detected after TB{/modal} 09:55
{modal https://www.youtube.com/embed/OaJe6ZjAM_0?autoplay=1;rel=0|width=780|height=439|title=Example after TB}Example after TB{/modal} 07:41
{modal https://www.youtube.com/embed/reupJlpJyaI?autoplay=1;rel=0|width=780|height=439|title=Error detected after Final Account}Error detected after Final Account{/modal} 09:16
{modal https://www.youtube.com/embed/_l01mgNNwI0?autoplay=1;rel=0|width=780|height=439|title=Concept Impact of error on Profit}Concept Impact of error on Profit{/modal} 03:30
{modal https://www.youtube.com/embed/65YRQQ25tGI?autoplay=1;rel=0|width=780|height=439|title=Example Impact of error on Profit}Example Impact of error on Profit{/modal} 16:15
{modal https://www.youtube.com/embed/frAA1s1FLo8?autoplay=1;rel=0|width=780|height=439|title=Final Quiz}Final Quiz{/modal} 16:08
{modal https://www.youtube.com/embed/OtN7crymzUo?autoplay=1;rel=0|width=780|height=439|title=Additional Questions}Additional Questions{/modal} 9:56
{modal https://www.youtube.com/embed/khmPPh9JibQ?autoplay=1;rel=0|width=780|height=439|title=Conclusion}Conclusion{/modal} 05:59
Total 4:00:53

Notes

Few things covered by us :

Capital & Revenue Expenditure & Receipts

Capital Expenditure
Revenue Expenditure
Deferred Revenue Expenditure
Capital Receipt
Revenue Receipt

Considerations for Determining Capital & Revenue Exp

Nature of business
Nature of expense
Benefit of expense
Effect on revenue generating capacity of business
Materiality of amount

Capital Expenditure

Benefit derived over more than a year
Increases revenue earning capacity
Materiality

Revenue Expenditure

Benefit derived only in current period
Usually recurring in nature
Maintenance charges
Non material items

Deferred Revenue Expenditure

Revenue in nature
Matching with revenue deferred
Deferred revenue expenditure vs Prepaid expenses
Discount on issue of Debentures, R& D Expense

Revenue Receipt

Receipt from business activity
Taken to Profit and Loss a/c - credit side
Recurring in nature
Sale , Scrap Sale, Interest on Deposits, Profit on sale of fixed assets, Discount received

Capital Receipt

Receipts not from regular business activity
Not recurring in nature
Affects the financial position
Liability side of Balance Sheet
Bank loan, Sale of Asset, Issue of shares

Contingent Asset

Possible asset
From past events
Possibility of income in future
Prudence and AS
Disclosure
If outcome is certain ?

Contingent Liability

Possible obligation from past events
Present obligation from past events
Disclosure
Distinction between liability and contingent liability
Distinction between provision and contingent liability

Rectification of Errors

What is rectification of errors
When do errors occur
Types of errors
Stages of rectification of errors
Errors Impact on Profit

What is Rectification of Errors

Examples of errors
Reasons
Effect on Trial Balance
How to rectify

Errors occur - while recording

Omission of a transaction
Double recording of a transaction
Partial omission of a transaction
Recording a wrong amount
Recording in a wrong subsidiary book
Wrong totalling of subsidiary book

Errors occur - while posting

Omission of posting
Partial omission of posting
Wrong amount posting
Wrong totalling of day books
Wrong account posting
Posting to the wrong side of correct account
Posting to the wrong side of wrong account

Errors occur - after posting

Wrong balancing of ledger account
Omission of account from Trial Balance
Wrong totalling of Trial Balance
Taking balance to wrong side in Trial Balance


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