MV Abitur Rechnungswesen cheat sheet

Separate business activity and owner transactions while recording capital and drawings appropriately.

Apply the supplied earning and expense-allocation model rather than cash timing alone.

Prudence requires caution without deliberate bias.

Identify the applicable framework and version before applying detailed recognition rules.

Distinguish changes in estimates, policies and genuine errors.

Debit assets and expenses; credit liabilities, income and capital

Trade discount is deducted before recording; cash discount is recorded on payment

Credit notes issued go to sales returns; credit notes received go to purchases returns

A trial balance proves arithmetical equality, not accuracy

Errors of principle, commission, omission and reversal do not affect trial balance agreement

One-sided postings and addition errors do affect the difference

Corrections are made by journal, not by changing source documents

Suspense is cleared only when every error is found

Adjust the cash book for bank charges, interest, standing orders and dishonoured cheques

Unpresented cheques are added to the adjusted cash book to reach the statement balance

Uncredited deposits are deducted in the reconciliation

Cost of sales includes carriage inwards and excludes carriage outwards

Closing inventory affects both the trading account and the balance sheet

Drawings reduce capital and are never an expense

An increase in the doubtful debts provision is charged to profit and loss

Capital = opening capital + net profit − drawings

Issued capital and actual cash received are different concepts.

Share premium in the supplied par-value model is not sales revenue.

Distinguish equity distributions from interest on liabilities.

Prime cost includes direct materials consumed, direct labour and direct expenses

Cost of production adds production overheads and adjusts for work in progress

Selling and administration costs are not production costs

Inventory is valued at the lower of cost and net realisable value

Inventory cost formulas and reporting rules must follow the stated framework.

Capital expenditure is capitalised; repairs and maintenance are revenue expenditure

Straight-line depreciation uses cost less residual value over useful life

Reducing balance applies the rate to opening net book value

Disposal profit or loss = proceeds − net book value at disposal

Remove both cost and accumulated depreciation from the accounts on disposal

Operating cash flow adjusts profit for non-cash items and working capital changes

Investing activities include purchases and sales of non-current assets

Use the stated cash-flow classification and reporting-period convention.

Depreciation is added back; profit on disposal is deducted

Ratios must be interpreted with accounting policies and business context

Contribution = sales − variable costs; profit = contribution − fixed costs

Break-even units = fixed costs ÷ contribution per unit

Relevant costs are future, incremental and differ between alternatives

Predetermined overhead rates use budgeted overheads and budgeted activity

Cash budgets exclude depreciation but include capital expenditure