How to analyse ACCA FR Section C question Print Co 2022 past paper | ACCA Financial Reporting Exam

Summary

This video tutorial guides viewers on how to tackle a financial reporting question for the ACCA F7 exam, focusing on the statement of financial position and the income statement. The presenter offers insights on exam techniques, the importance of timelines, and adjustments, and emphasizes the necessity of detailed workings to secure marks. Exclusive notes and further resources are available through the provided link, aiming to streamline preparation and enhance exam performance.

Takeaways

• 📚 The video is a tutorial on analyzing and preparing for an ACCA F7 exam question, focusing on the Statement of Financial Position and the Income Statement.
• 🔍 The presenter suggests downloading a classic financial reporting mock paper from the ACCA study hub to practice.
• ⏰ The recommended time to spend on the question is 36 minutes, based on 1.8 minutes per mark, with a maximum of 40 minutes including adjustments for human marking.
• 📝 The presenter recommends starting with Section A, then Section C, and finishing with Section B to manage time effectively.
• 📈 The importance of creating a timeline when preparing financial statements is emphasized, to track events before and after the accounting period.
• 🧐 The presenter advises using Excel or the CBE platform to layout the Income Statement and Statement of Financial Position for exam preparation.
• 📊 Carrying forward figures correctly, especially net profit or loss to the Statement of Financial Position, is crucial for scoring marks.
• 📋 The presenter suggests making notes on adjustments and using them to review mock papers and past questions for exam technique.
• 💡 Understanding the accounting equation (Assets = Equity + Liabilities) is fundamental for balancing the Statement of Financial Position.
• 🔑 The video highlights the importance of 'workings' in exam technique, as they help the marker understand the candidate's thought process and award marks accordingly.
• 🚨 The presenter warns about the potential for the examiner to use bold or highlighted terms to test candidates' attention to detail, such as a tax refund being a cash inflow.

Q & A

What is the main focus of the video?

The main focus of the video is to guide viewers through the process of analyzing and preparing a financial reporting classic ACCA question, specifically on the statement of financial position and the income statement, which could appear on the F7 exam.

What is the significance of the timeline in the context of the video?

The timeline is significant as it helps to distinguish between transactions that occurred before the accounting period and those that occurred afterwards, ensuring accurate adjustments are made in the financial statements.

What is the recommended approach to tackling the ACCA F7 exam questions?

The recommended approach is to first work on section A, then section C, and finally section B, ensuring no more than 40 minutes are spent on the task. It is also suggested to use workings carried forward figures and to practice with mock papers and past exams.

Why is it important to carry forward figures in the exam?

Carrying forward figures is important as it helps in maintaining consistency across the financial statements and ensures that the marker can follow the candidate's thought process, which can lead to easier marking and potentially higher scores.

What is the purpose of the notes provided in the video?

The notes provided in the video are meant to serve as a guide and a template for candidates to follow when preparing their own financial statements, highlighting key components and adjustments that need to be made.

How does the video suggest candidates should approach the income statement and statement of financial position in the exam?

The video suggests that candidates should use an Excel spreadsheet or the CBE platform to layout the income statement and statement of financial position based on the answers, ensuring they understand where each component fits within the financial statements.

What is the significance of the accounting equation in the context of the video?

The accounting equation, which states that assets equal equity plus liabilities, is significant as it is the basis for ensuring that the balance sheet balances and reflects the correct financial position of the company.

What should candidates do when they encounter adjustments in the exam?

Candidates should carefully consider the adjustments, noting the date of each transaction and its impact on the current accounting period, and make the necessary adjustments in their financial statements accordingly.

How does the video address the issue of a non-current asset being sold after the year end?

The video explains that a non-current asset sold after the year end needs to be reclassified in the statement of financial position as a current asset held for sale, reflecting the change in its status.

What is the importance of 'workings' in the exam according to the video?

The importance of 'workings' in the exam is emphasized as it helps candidates to demonstrate their understanding of the financial reporting process, making it easier for the marker to award marks and follow the candidate's reasoning.

What is the final tip provided by the video for candidates preparing for the financial reporting exam?

The final tip is to imagine marking one's own work, which encourages candidates to be thorough and detailed in their workings, ensuring that even the simplest aspects of the financial statements are correctly accounted for.

Outlines

00:00

📊 Introduction to Financial Reporting Exam Preparation

In this video, the presenter guides viewers through the process of analyzing and preparing for a financial reporting exam, focusing on a classic ACCA question from the March and June 2022 papers. The question covers both the statement of financial position and the income statement. The video provides insights and tips on creating effective notes and offers access to exclusive notes through a link in the description.

05:02

🗓️ Creating Timelines and Preparing Statements

The presenter emphasizes the importance of creating a timeline for understanding the financial period in question, starting from the 1st of July, 2001, to the 30th of June, 2002. This section covers the preparation of statements of profit and loss and the statement of financial position, including how to handle different adjustments and transactions within the period. Tips for exam technique, such as using Excel or the CBE platform for layout, are also discussed.

10:02

📅 Adjustments and Exam Techniques

This paragraph delves into handling specific adjustments and transactions, such as interest on loans and sales of non-current assets. The presenter highlights the importance of correctly apportioning figures and ensuring that transactions falling outside the current accounting period are properly classified. The focus is on maintaining accurate records and understanding the implications of various financial events.

📝 Importance of Workings and Mock Papers

The presenter stresses the significance of detailed workings in the financial reporting exam. They advise students to practice with mock papers and past exams to familiarize themselves with the exam format and to help markers follow their thought process. Key points include understanding tax refunds, recognizing liabilities or assets, and ensuring all figures are carried forward correctly.

📚 Final Tips and Additional Resources

The video concludes with final tips and a reminder to check out additional resources through the provided links. The presenter encourages viewers to like the video, leave comments with questions, and watch related videos for further exam preparation. The goal is to equip viewers with the knowledge and techniques needed to pass their financial reporting exam.

Keywords

💡Financial Reporting

Financial Reporting refers to the process of preparing and presenting financial information about a company's financial performance and position. In the context of the video, it is the main theme as the speaker discusses how to analyze and prepare for a financial reporting exam, specifically focusing on the statement of financial position and the income statement.

💡ACCA

ACCA stands for the Association of Chartered Certified Accountants, a global professional accounting body. The video is about preparing for an ACCA exam, which is a key part of becoming a certified accountant. The script mentions an 'ACCA question' and 'F7 exam,' indicating the specific level and subject of the financial reporting exam being discussed.

💡Statement of Financial Position

The Statement of Financial Position, also known as the balance sheet, is a key financial statement that presents a company's assets, liabilities, and equity at a specific point in time. The video script explains that the exam requires students to prepare this statement, emphasizing its importance in financial reporting.

💡Income Statement

An Income Statement, also referred to as the Profit and Loss Statement, details a company's revenues, expenses, and profits over a period of time. The video script mentions preparing an income statement for a specific company, which is a central task in the exam scenario presented.

💡Trial Balance

A Trial Balance is a report that lists the balances of all general ledger accounts at a particular time, with the amounts debited and credited. In the script, the trial balance is the starting point for preparing financial statements, indicating its role in ensuring that the accounting equations are balanced.

💡Adjustments

Adjustments in accounting are entries made to correct the amounts of asset, liability, or equity accounts to reflect the actual financial position of a company. The video script discusses various adjustments that need to be made when preparing financial statements, which is a critical part of the financial reporting process.

💡Timeline

A timeline in the context of the video refers to a chronological representation of events or transactions that have occurred within a specific period, which is crucial for determining the relevance of transactions to the current accounting period. The script emphasizes the importance of the timeline for identifying transactions that occurred before or after the accounting year-end.

💡Perforer

A Perforer, or Performer, in the context of the video, seems to be a typographical error for 'performer' and likely refers to a platform or tool used for practicing exam questions. The script suggests using a Perforer to lay out answers for financial statements, which helps in understanding the structure and components of these statements.

💡Retaining Earnings

Retaining Earnings represent the portion of a company's net income that is retained in the business rather than distributed to shareholders as dividends. In the script, retaining earnings are mentioned as a key component of the statement of financial position, where the net profit or loss from the income statement is carried forward.

💡Workings

Workings in accounting refer to the calculations and steps taken to arrive at a particular figure or result. The video script stresses the importance of showing workings in exam responses, as it helps the marker understand the process and ensures that marks are awarded for correct methodology.

💡Tax Refund

A Tax Refund is an amount of money returned by a tax authority to a taxpayer when the amount of tax paid exceeds the amount owed. In the script, the concept of a tax refund is discussed in the context of adjusting the financial statements, where a refund is treated as a positive cash inflow to the business.

Highlights

The video guides viewers through analyzing and preparing a financial reporting classic ACCA question for the F7 exam.

Focuses on the statement of financial position and the income statement, which are key components of the financial reporting exam.

Provides insights on what to look out for in exam questions and encourages creating personal notes for better understanding.

Offers access to exclusive notes and other associated videos to save time and enhance exam preparation.

Suggests a time management strategy for the exam, recommending 1.8 minutes per mark and not exceeding 40 minutes for section C.

Advises starting with section A, then C, and finishing with section B for optimal exam performance.

Emphasizes the importance of understanding the timeline and adjusting entries based on events before and after the accounting period.

Recommends using a timeline to track the sequence of events and their impact on financial statements.

Discusses the use of Excel or the CBE platform for laying out income statements and statements of financial position.

Stresses the importance of carrying forward figures accurately to ensure consistency between the income statement and statement of financial position.

Details the process of adjusting non-current assets held for sale and their reclassification in the statement of financial position.

Provides a strategy for handling year-end purchases and their valuation in the financial statements.

Advises on the treatment of tax refunds in the statement of profit and loss, emphasizing their impact as a cash inflow.

Encourages thorough working calculations to assist markers in understanding the candidate's thought process and to secure marks.

Suggests that candidates imagine marking their own work to identify areas for improvement and clarity in presentation.

Reminds viewers to pay attention to details such as the treatment of tax refunds and their classification in the financial statements.

Ends with a call to action, encouraging viewers to like the video, leave comments, and explore related financial reporting videos for further assistance.

Transcripts

in today's video I'm going to take you

through how to analyze and prepare a

financial reporting classic Acca

question that could come up on your F7

exam all about the statement of

financial position and the income

statement which it's a financial

reporting exam they have to test you on

either one of them thankfully for you

the print code question from the March

and June 2022 paper actually has both of

them so that at the end of this video

I'm going to give you some insights what

look out for and then you can be able to

create some notes yourself that could

look like these if you'd like access to

those notes which are exclusive click

the link in the description of this

video and you can have a look at some of

the other videos associated with it to

save you tons of time and the answers

are all fully analyzed as well but let

me take you through now the printco

question so this is a classic

downloadable document you can get from

the Acca study Hub a financial reporting

mock paper classic P paper question

trial balance and we were asked if I

come down to the bottom right now to

prepare a statement of profit and loss

for printco for the year ended 30th of

June

2002 and also on that so eight marks for

the income statement and 12 marks for

the statement of financial position

again for the same year end 20 marks in

total you should be working on the basis

of 1.8 minutes per Mark altogether 36

minutes is the sort of usual Benchmark I

would say now some students like to go a

bit higher than that because section c

is marked by a person I would actually

say because it's marked by a person an

actual marker uh you get workings

carried forward figures I would be doing

your exam section A first then section c

and then section B to finish with

section c you can't spend any more than

40 minutes you might be able to pinch a

few minutes from section A and to have

that as a as a bid in hand to go through

these style of questions as what you

tend to see in these areas is you get

lots of little notes on here adjustments

that go through the actual question

itself but one thing that will help you

out when you're going through this style

of question is to actually draw a

timeline so let me pull up my notes on

here for you so you can see the top of

them what we actually were told exactly

from the requirement straight the way we

had the 30th of June 2002 as the year

end so in my mind when I was doing these

notes going through it the 1st of July

2001 is going to be my first day of the

year and that is absolutely critical for

me as I need to be checking what

happened anything before the start of

the accounting period and also

afterwards another key thing for your

little uh notes and tips for this is

doing a per forer now what that means is

is that you could use an Excel

spreadsheet or you can use the CBE

platform so that you would lay out based

on the answers how a income statement or

statement of financial position is laid

out so that when it came to your

financial reporting exam if it asked you

to produce a statement of profit and

loss you would go right I know where

we're going with this James Revenue less

cost of sales gives me my gross profit

deduct any other expenses such as admin

cost any other expenses we may be given

in the trial balance and then from that

we'll be having our sort of operating

profit dedu any tax and interest giving

me my net profit for the end and another

key thing for your notes really good for

exam technique especially in this

question because they asked for the

income statement and the balance sheet

the net profit or loss whatever your

figure is as long as you carry that

forward to the statement of financial

position in the retaining earnings

that's the key bit for your notes you'll

also see that in the notes of this video

if you click the link down there as long

as you carry forward your own figure you

will get the mark for it on that even if

it's incorrect so the key bits on here

are you can see on my screen that what

I've put down for you there is a little

B and a little a so when you're

reviewing mock papers and past questions

maybe from your provider I've also put

some uh financial reporting books down

in the comments below the ones I would

recommend I would actually do a little

note on there so that you can see that

Equity shares and other components of

equity the share premium they're only

falling under the statement of financial

position under the equity heading so in

your pro fora for the statement of

financial position you would have all

your assets are equal to your Equity

total Equity plus your total liabilities

that is the accounting equation for your

notes and also so why the balance sheet

balances the other thing to note down

here for your actual notes for this

video is from that timeline when you're

going through any of the sort of

adjustments as you see like we've got

plenty on here but when you actually see

it as if it was the real examination

like on there highlighting the 1st of

January 2002 in this case print Co raise

funds for $30 million in other words

what we're saying there referring back

to

that timeline is your figures up here

are for the 30th of June on there and

this transaction happened on or the

initial information happened on the 1st

of January so that is partway through

the year so again it doesn't matter in

the exam it's up to you but you could

simply go January February March April

May June count on your fingers it

doesn't matter as long as you get it

right that's the key thing so so that is

6 months into the actual trading period

that we're looking at here and therefore

you've got to be thinking like we're

being asked for interest on the loan

that is going to lead to some

apportioning as a result and therefore

you're going to have to take these other

aspects into account other things as you

go through you start to pick up on this

with a bit more exam technique you're

thinking right there's another year end

purchase at the end there we've got

different values so I've got to be

showing all of my working

uh We've also got on the 1st of July

2001 so again for your timeline picking

up on it actually fell in this year but

this is the key thing that that they

actually posed on this question was

notice on here the first of July

2002 so that is where the alarm bells

and exam technique should be ringing to

you as to look at that full sentence on

the screen that we have the machine was

sold for 1.4 1.1 million after selling

costs on the 1st of July 2002 so this is

not within the current accounting period

that we've been asked to actually

prepare the statement of profit and loss

and statement of financial position for

this is in the following period And this

is where we have different assets on

here so this is where it test your

financial reporting knowledge and those

technical articles on acca's website

where what we have here is we have an a

non-current asset within the statement

of financial position that we now need

to change and reclassify because it's a

non-current asset held for sale we know

it is going to be sold the day after the

year end of 31st uh sorry the 30th of

June 2002 and on the 1st of July 2002 it

will be sold on there so again that will

be when it comes to your state of

financial position your non-current

assets we're going to have some workings

that we need to adjust and then show

that on a separate line within your Prof

forer on there the final tips I want to

make sure I get across for this short

and sweet video for you to note down are

if you're going to be doing the

financial reporting exam which is

probably why you're watching at this

point is workings workings workings and

the best thing I can say to I today to

all my students is imagine you are

marking your own piece of work so this

is where the more mock papers you do the

more past exams the more things you do

on the CB platform the pro forers for

the income statement the statement of

financial position and also the workings

this is where you're going to pick up on

the marks and you're going to help the

marker to actually give you those marks

and to follow through how you've gone

about it also within this you've got to

go through the notes one by one and pick

up on even just the simplest things like

notice here how the examiner actually

put refund for you in bold it I think

this was to actually put students off

because they'd probably seen in so many

other past paper questions that the tax

or income tax on this was payable for

the year and estimated to be

2.53 the final things for you note is

that if it's a refund that means it's a

cash inflow to the business so instead

of it being d Ed in the statement of

profit and loss we actually need a

positive amount in there and the final

thing which a few students get mixed up

on and they throw away easy Mark at the

end there is that if a tax is a refund

or if it's a payment that happens in the

following accounting period so you

actually need to have either a uh

liability a provision for that tax to be

paid or in this case it was going to be

a current asset because we are going to

be due that tax refund in the next

period on there but if you follow the

tips and tricks that I've gone through

in this video check out the link in the

description so you can access the full

notes and exclusive videos and it can be

the difference in getting you that pass

for your financial reporting exam but

thank you very much for watching be sure

to give this video a massive like leave

me any comments below any questions you

have and I've put a couple of videos up

above here that are also relating to

financial reporting click on one of them

out they're definitely going to help you

to pass your exam so best of luck and

I'll see you on the other side for

another video thanks very much