Negative Cash Balances

CIB GH – INTRODUCTION TO ACCOUNTING – APRIL 2024 – L1 – Q4 – Characteristics of Useful Accounting Information and Cash Budget

Explain five characteristics of useful accounting information; identify three ways to address negative cash balances in a cash budget.

Question

a) Explain each of the following characteristics of useful Accounting Information:

i) Relevance (3 marks)

ii) Understandability (3 marks)

iii) Materiality (3 marks) iv) Completeness (3 marks)

v) Neutrality (3 marks)

b) A Cash Budget is an estimation of the cash flows of a business over a specific period of time. This Budget is used to assess whether an entity has sufficient cash to continue operating over a given time frame. The Cash Budget provides a company with insight into its cash needs (and any surplus) and helps to determine an efficient allocation of cash. You are required to: Identify THREE (3) ways a business can address negative net monthly cash balances in a Cash Budget. (5 marks)

[Total: 20 marks]

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Budget, Completeness, Materiality, Negative Cash Balances, Neutrality, Relevance, Understandability
Level: Level 1

Topic: Cash forecast
Series: APR 2024

IMAC – DEC 2022 – L1 – Q1 – Budgeting | Marginal Costing and Absorption Costing

Features of a service, calculation of overhead absorption rates and production cost, addressing negative cash balances, and preparation of a flexible budget.

Question

a) Services are the non-physical, intangible parts of the Ghanaian economy, as opposed to goods, which we can touch or handle. Services, such as banking, education, medical treatment, and transportation make up a significant percentage of the economy.

Required: State and explain THREE (3) features of a service. (6 marks)

b) Edwin Ltd manufactures aviation components and parts to order, and the following are budgeted overheads for the year based on normal activity levels:

Department	Budgeted overhead	Labour hours
Welding	GH¢12,000	3,000
Assembly	GH¢20,000	2,000

Selling and administration overheads are 25% of factory cost.

An order for 350 units of engine parts, Job X 01, incurred the following cost:

Material cost: GH¢24,000
Labour:
- Welding: 200 hours @ GH¢5 per hour
- Assembly: 400 hours @ GH¢2 per hour
GH¢1,000 was paid for the hiring of a special x-ray machine for testing the welds.

Required: i) Calculate the overhead absorption rate for each department. (2 marks)

ii) Calculate the production cost for Job X01. (10 marks)

iii) Calculate the total cost of Job X01. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Flexible Budget, Negative Cash Balances, Overhead Absorption Rate, Production Cost, Service Features, Total Cost
Level: Level 1

Topic: Budgeting, Marginal Costing and Absorption Costing
Series: DEC 2022

CIB GH – INTRODUCTION TO ACCOUNTING – APRIL 2024 – L1 – Q4 – Characteristics of Useful Accounting Information and Cash Budget

Explain five characteristics of useful accounting information; identify three ways to address negative cash balances in a cash budget.

Question

a) Explain each of the following characteristics of useful Accounting Information:

i) Relevance (3 marks)

ii) Understandability (3 marks)

iii) Materiality (3 marks) iv) Completeness (3 marks)

v) Neutrality (3 marks)

[Total: 20 marks]

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Budget, Completeness, Materiality, Negative Cash Balances, Neutrality, Relevance, Understandability
Level: Level 1

Topic: Cash forecast
Series: APR 2024

IMAC – DEC 2022 – L1 – Q1 – Budgeting | Marginal Costing and Absorption Costing

Features of a service, calculation of overhead absorption rates and production cost, addressing negative cash balances, and preparation of a flexible budget.

Question

Required: State and explain THREE (3) features of a service. (6 marks)

b) Edwin Ltd manufactures aviation components and parts to order, and the following are budgeted overheads for the year based on normal activity levels:

Department	Budgeted overhead	Labour hours
Welding	GH¢12,000	3,000
Assembly	GH¢20,000	2,000

Selling and administration overheads are 25% of factory cost.

An order for 350 units of engine parts, Job X 01, incurred the following cost:

Material cost: GH¢24,000
Labour:
- Welding: 200 hours @ GH¢5 per hour
- Assembly: 400 hours @ GH¢2 per hour
GH¢1,000 was paid for the hiring of a special x-ray machine for testing the welds.

Required: i) Calculate the overhead absorption rate for each department. (2 marks)

ii) Calculate the production cost for Job X01. (10 marks)

iii) Calculate the total cost of Job X01. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Flexible Budget, Negative Cash Balances, Overhead Absorption Rate, Production Cost, Service Features, Total Cost
Level: Level 1

Topic: Budgeting, Marginal Costing and Absorption Costing
Series: DEC 2022

Question Tag: Negative Cash Balances

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CIB GH – INTRODUCTION TO ACCOUNTING – APRIL 2024 – L1 – Q4 – Characteristics of Useful Accounting Information and Cash Budget

Explain five characteristics of useful accounting information; identify three ways to address negative cash balances in a cash budget.

IMAC – DEC 2022 – L1 – Q1 – Budgeting | Marginal Costing and Absorption Costing

Features of a service, calculation of overhead absorption rates and production cost, addressing negative cash balances, and preparation of a flexible budget.

CIB GH – INTRODUCTION TO ACCOUNTING – APRIL 2024 – L1 – Q4 – Characteristics of Useful Accounting Information and Cash Budget

Explain five characteristics of useful accounting information; identify three ways to address negative cash balances in a cash budget.

IMAC – DEC 2022 – L1 – Q1 – Budgeting | Marginal Costing and Absorption Costing

Features of a service, calculation of overhead absorption rates and production cost, addressing negative cash balances, and preparation of a flexible budget.

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CIB GH – INTRODUCTION TO ACCOUNTING – APRIL 2024 – L1 – Q4 – Characteristics of Useful Accounting Information and Cash Budget

Explain five characteristics of useful accounting information; identify three ways to address negative cash balances in a cash budget.

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IMAC – DEC 2022 – L1 – Q1 – Budgeting | Marginal Costing and Absorption Costing

Features of a service, calculation of overhead absorption rates and production cost, addressing negative cash balances, and preparation of a flexible budget.

You're reporting an error for "IMAC – DEC 2022 – L1 – Q1 – Budgeting | Marginal Costing and Absorption Costing"

CIB GH – INTRODUCTION TO ACCOUNTING – APRIL 2024 – L1 – Q4 – Characteristics of Useful Accounting Information and Cash Budget

Explain five characteristics of useful accounting information; identify three ways to address negative cash balances in a cash budget.

You're reporting an error for "CIB GH – INTRODUCTION TO ACCOUNTING – APRIL 2024 – L1 – Q4 – Characteristics of Useful Accounting Information and Cash Budget"

IMAC – DEC 2022 – L1 – Q1 – Budgeting | Marginal Costing and Absorption Costing

Features of a service, calculation of overhead absorption rates and production cost, addressing negative cash balances, and preparation of a flexible budget.

You're reporting an error for "IMAC – DEC 2022 – L1 – Q1 – Budgeting | Marginal Costing and Absorption Costing"

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