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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.
With Sheela Warrier.Duration:3hrs 51min
| Capital & Revenue ,Contingent & Rectification of Error | Duration (min:sec) |
| Capital & Revenue | |
| Introduction | 04:39 |
| What is Capital & Revenue Expense | 14:45 |
| Implication of Wrong Recording | 04:29 |
| Deferred Revenue Expense | 04:59 |
| Example | 10:24 |
| Conclusion Revenue vs. Capital Expense | 04:20 |
| Revenue & Capital Receipt | 05:14 |
| Quiz | 11:23 |
| Conclusion | 07:26 |
| Contingent Asset & Liability | |
| Introduction | 01:36 |
| Contingent Asset | 04:08 |
| Contingent Liability | 04:27 |
| Example | 13:50 |
| Recap | 04:07 |
| Quiz | 01:28 |
| Rectification of Error | |
| Introduction | 04:19 |
| What is Rectification of Error | 05:17 |
| When do error occur | 19:20 |
| Types of Error | 10:59 |
| Quiz | 02:09 |
| When is error detected | 03:36 |
| Error detected before TB | 19:18 |
| Error detected after TB | 09:55 |
| Example after TB | 07:41 |
| Error detected after Final Account | 09:16 |
| Concept Impact of error on Profit | 03:30 |
| Example Impact of error on Profit | 16:15 |
| Final Quiz | 16:08 |
| Additional Questions | 9:56 |
| Conclusion | 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
CPT Exam Exposure
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