22 May 2013 ACCN2 Exam

Heyy guys, thought I should make a thread relating to ACCN2 Accounting Exam tomorrow seeing as there was none. How are you guys revising for it? Any tips that might help?

Just confused myself.. Whats the difference between profit/loss for the year and retained profit? Is it the same thing? And are net profit and profit from operations the same thing?

Posted from TSR Mobile

Hi.

The difference between profit for the the year and retained earnings is that profit for the year reflects upon the business' earnings just for that one specific year. Whereas, retained earnings is a revenue reserve(gains arising from day to day trading) where all previous years' retained(held back) profit is accumulated.

Net profit is the old syllabus terminology for profit for the year so it would be the final figure on the income statement. Whereas, Profit from operations is the gains from sales after deducting cost of sales, admin/selling and distribution expenses.. But before deducting finance cost and taxation. The profit from operations figure is used in most calculations i.e. the profit in relation to revenue ratio, because tax and finance cost(e.g. interest) is compulsory so the business cannot do anything to reduce/alter it; thus the profit for the year figure would not be suitable as it would not project an accurate measurement of the business' performance.

Hope that helps.

Hey! That helps a lot! Thankss! One quick question.. What happens to the dividends? Is that a finance cost or is it just deducted from profit from operations after tax has been deducted?


Posted from TSR Mobile

Dividends does NOT appear on the Income Statement. It however gets deducted from the statement of changes in equity. For example, if the accumulated retained earnings from the years before is 200,000 and the profit for the year for the current year is 50,000 and Dividends paid is 30,000, then what you do is 200,000 + 50,000 - 30,000 = 220,000 this would be the ending figure for the retained earnings section in the statement of changes in equity (this shows how much the retained profit the business has left after one more year of trading).

What did everyone do for calculating the effect of introducing the budgeting on:

Profit

and

Bank Balance

i got 302060 for profit.. what did everyone else get?

Uh-oh I thought it was just stating what would happen to the profit and the bank balance.. e.g. Reduce bank balance by £35,000 for wages etc.

Overall I think the paper was alright!

Posted from TSR Mobile

I got 170 thousand something for the profit for the year.. it was generally a good paper, however there were a few parts that were really badly worded

Oh okay i got £168940 for that profit... And yeh i did find some buts weirdly worded...

yeah the some questions were weirdly worded such as Director's Remuneration and the rent receive relate to... i just added 12,000 with 13,500 or something like that and wrote under "any other income"