CMA MINI MARATHON PART 1 | CHAPTERS 1,2,3,5 | CS EXECUTIVE OLD SYLLABUS
Amit Talda Mentorship (ATM)・2 minutes read
Ma is fine on June 23rd. The mini marathon covers five important concepts.
Insights
- The accounting cycle involves fundamental steps like double-entry systems, contra entries, and balance maintenance through the Impressed System, ensuring accuracy in financial records.
- Various types of accounts, including real, personal, and nominal accounts, are crucial in accounting for tracking assets, liabilities, and expenses accurately.
- Financial statements play a vital role in summarizing a company's financial health, including balance sheets, income statements, and disclosure of contingent liabilities.
- Equity share allotment and buyback procedures involve detailed accounting entries, shareholder eligibility criteria, and the importance of maintaining accurate records for transparency and compliance.
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Recent questions
What is the Impressed System in accounting?
A: The Impressed System in accounting involves setting a fixed amount at the start of the month for anticipated expenses. This system ensures that the balance is maintained by accounting for personal and real nominal accounts, with cash outflow corresponding to expenses made and reimbursement claimed from the cashier.
How are closing entries important in accounting?
A: Closing entries in accounting are crucial as they transfer balances and ensure accuracy in the trial balance. By making these entries, the financial records are updated, and the accounts are prepared for the next accounting period.
What are the three methods for maintaining balance in accounting?
A: The three methods for maintaining balance in accounting are the Total Method, Balance Method, and Compound Method. These methods help in ensuring that financial records are accurate and balanced, providing a systematic approach to managing accounts.
What are the different types of accounts in accounting?
A: In accounting, there are three main types of accounts: personal, non-personal, and real accounts. Personal accounts include representatives like suppliers and customers, while non-personal accounts cover real and nominal accounts. Real accounts follow the rule of debiting what comes in and crediting what goes out.
How are financial statements classified in accounting?
A: Financial statements in accounting are classified into balance sheets and income statements. These statements provide a comprehensive overview of a company's financial position and performance, helping stakeholders make informed decisions.
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Darryl Hill
COMP2404A Tuesday Apr 9 / 24
Summary
00:00
"Mini Marathon and Accounting Fundamentals"
- Ma is fine on June 23rd
- The number of attempts left onwards is old
- Mini Marathon is discussed
- Five words with important concepts definition
- Revision of all five chapters in detail
- Journal entries will be completed
- Approximate duration of the mini marathon is 324
- Fundamental steps of accounting cycle are explained
- Double entry system is detailed
- Contra entry examples are provided
18:41
Maintaining Balance and Accounting Principles
- Balance refers to the current cash on hand and the system of Impressed System.
- Impressed System involves setting a fixed amount at the start of the month for anticipated expenses.
- Cash outflow corresponds to the expenses made, with reimbursement claimed from the cashier.
- The system ensures that the balance is maintained by accounting for personal and real nominal accounts.
- Closing entries are made to transfer balances and ensure accuracy in the trial balance.
- The three methods for maintaining balance are Total Method, Balance Method, and Compound Method.
- Wasting assets are those with limited resources that diminish in value over time.
- Contingent liability pertains to pending events whose outcomes are uncertain.
- Disclosure of contingent liabilities is crucial in financial statements to adhere to accounting norms.
- The entry system in accounting can be either double entry bookkeeping or single entry, with the former being the preferred method for accuracy.
36:07
Recording Transactions in Subsidiary and Cash Books
- Acid is recorded in the gas book
- Non-cash expenses and income are not recorded in the single entry system
- Records are kept in subsidiary books like cash book and personal account
- Subsidiary books include purchase book, sales book, and bill receivable book
- Purchase transactions are recorded in the purchase book, especially credit transactions
- Sales transactions are recorded in the sales book, including credit sales and sales returns
- Debit notes are issued for purchase returns, while credit notes are issued for sales returns
- Bill receivable book records bills of exchange received or promised
- Cash transactions, including purchases, sales, and expenses, are recorded in the cash book
- Journal proper is used for transactions not recorded in subsidiary books, like opening and closing entries
52:30
"Accounting Essentials: Profit, Accounts, and Statements"
- Data completion leads to solving equations for profit and net profit calculation.
- Three types of accounts exist: personal, non-personal, and real accounts.
- Real accounts follow the rule of debiting what comes in and crediting what goes out.
- Personal accounts include representatives like suppliers, customers, and capital accounts.
- Outstanding expenses, prepaid income, and accrued income are examples of personal accounts.
- Nominal accounts cover expenses, income, and losses, such as commission received or office expenses.
- Financial statements include balance sheets and income statements.
- Accounting branches into financial, management, cost, and social responsibility accounting.
- Users of accounting information include investors, employees, lenders, suppliers, customers, and the government.
- Double-entry accounting involves real, personal, and nominal accounts, following the Golden Rules of accounting.
01:18:00
"Asset and Liability Balance in Accounting"
- Liability site balance includes property, plant, and equipment, and intangible assets.
- Fixed assets are categorized as property, plant, and equipment.
- Intangible assets are included in the liability site balance.
- Expenditures on incomplete projects are capitalized.
- Current assets include P, intangible assets, non-current investments, long-term loans, and advances.
- Current assets consist of current investments, inventories, trade receivables, cash equivalents, short-term loans, and other current assets.
- Inventory calculations involve material purchases, opening and closing stock adjustments.
- Employee benefits include salaries, wages, finance costs, depreciation, and other related expenses.
- Profit calculation involves subtracting total expenses from total income.
- Rounding off financial amounts is based on turnover, with specific categories for different amounts.
01:38:16
Accounting Treatment and Classification of Items
- Schedule 3 Country Note deals with accounting treatment of items under accounting standards and best practices.
- Companies should disclose unmortised portions in balance sheets for items not yet written off.
- Unmotivated expenses are written off gradually over time, either in current or non-current categories.
- The classification of assets depends on the remaining period for writing off.
- Operating cycles determine the classification of assets based on consumption, sale, or release.
- Cash and cash equivalents are classified based on restrictions on conversion or exchange.
- Liabilities are classified based on expected settlement within the normal operating cycle.
- Liabilities with unconditional rights to defer beyond 12 months are classified as non-current.
- Share application money received over authorized capital is classified as other current liability.
- Refundable portions of share application money are shown in other current liability if not in pending allotment.
01:58:05
Financial Reporting Guidelines for Company Compliance
- If minimum subscription is not received, the entire amount will be refunded.
- Debit balance is the reserve, show it with a negative sign.
- Current maturity of long-term debt should be shown in the short term.
- MSME details can be read, nothing special to ask.
- Long-term other current liability should not be seen as short term.
- Current maturity of finance should be shown accordingly.
- Interest, dividend, and sale of investment should be reflected in other income.
- Non-operating income should be shown separately.
- Differential voting rights have a maximum limit of 74%.
- Minimum application money should be 5% of the face value.
02:25:12
"Redemption and Benefits of Securities Issuance"
- Redemption of Preference Lion and Premium Debenture involves using the 'Aap Securities Vav' part from your account for paper and redemption.
- Avenues exist for buying back securities, including Foolish Tree, Bonus Shares, Writing Off Preliminary Expenses, and Commission and Discount on Issue of Security.
- Intangible benefits are received in exchange for sweat equity shares, with the option to give cash or non-monetary elements.
- Provisioning for Rights in the Nature of Intellectual Property rights involves value addition by Vetiver name.
- Employee stock options can be granted to employees and directors, with specific conditions and vesting periods.
- Non-payment of money for shares results in defaulting and potential forfeiture of shares.
- Forfeited amounts on shares must be shown in the balance sheet and transferred to capital reserve accounts.
- Lion's profit can be canceled by debiting share capital and transferring the balance to capital reserve accounts.
- Minimum issue price and discount calculations are based on the amount received and the maximum discount allowed.
- Redemption of Preference Shares can be done using free reserves, but premium is not allowed in this process.
02:47:55
"Share Buyback Guidelines and Restrictions"
- The first option for buyback is from existing shareholders.
- Buyback can also be done in the open market.
- Share buyback can be shared with employees.
- A condition to maintain in the shop after buyback is not to exceed the date of equity.
- Debt equity ratio should not be exceeded after buyback.
- Debt capital and free reserves should be provided after buyback.
- Extinguish within 7 days after buyback.
- Restrictions on issuing money for the next six months after buyback.
- No further issue of shares or securities for six months after buyback.
- Limits on board power for buyback not to exceed 10% of equity share capital and free reserves.
03:13:17
Equity Share Issuance and Accounting Essentials
- ₹2 lakh is the entry amount, preventing a combined entry.
- Liability side is visible with a negative sign due to debit balance.
- Money is yet to be received, leading to interest charges if delayed.
- Interest income is earned on assets, with interest on loans being a regular occurrence.
- Board of Directors decides on dividend distribution and share issuance discounts.
- Equity shares are transferred to capital accounts, with premiums credited accordingly.
- Employees, directors, and shareholders are eligible for equity shares based on specific criteria.
- Intellectual property rights valuation is necessary for equity share allotment.
- Register maintenance is crucial for equity share issuance to eligible employees.
- Promoters, directors, and shareholders have distinct eligibility criteria for equity share allotment.
- Allotment money not received results in due balances and necessary adjustments.
- Forfeited shares are transferred to capital reserves to absorb losses.
- Cash consideration is vital for promoters in free corporation contracts.
- Intangible benefits from promoter services are debited to goodwill.
- Asset purchases and share issuances impact capital and reserve accounts.
- Entries for fresh share issuances and redemptions involve specific debits and credits.
03:36:28
"Accounting for Share Issuance and Redemption"
- Cancellation of a credit, requiring payment to be made, leading to a liability and a debit reference.
- Redemption process involving security rules and the use of premiums to absorb losses.
- Differentiating between redemption of reference shares and buyback, emphasizing the absorption of losses through debiting and crediting shareholders.
- Payment amounts of ₹10 without a premium and ₹12 with a premium, with corresponding debit and credit actions.
- Calculation of funds required for capital increase based on the number of shares issued and the issue price per share.
- Filing requirements for the Solvency file by at least two directors, using Form SH9 for declarations.
- Prohibitions on buybacks in cases of non-compliance with financial statements or dividend payments.
- Detailed instructions on the accounting treatment of bonus shares, including the absorption of losses and the use of reserves.
- Conditions for issuing bonus shares, including limitations on the percentage of capital granted to employees and the need for separate disclosures.
- Specific entry procedures for allotment of shares to underwriters, emphasizing the debit and credit actions involved in settlements.
04:00:00
"Exclusive Cigarettes, Lion Notes, Free Study Materials"
- Premium cigarettes can only be purchased on Ishung Phuli tree, along with bonus lion notes, and the conversion of patli notes.
- The notes, endgame notes, and revision notes are available on the speaker's website, accessible through a direct Google search for free notes.
- The speaker has covered chapters one, two, three, five, and tax chapters in the mini marathon, with plans to teach four to five more chapters in the next session, emphasizing the importance of hard work and thorough revision for success.
