Korea Computerized Accounting Level 2 cheat sheet

Accounting equation: Assets = Liabilities + Equity (owner's equity). Every transaction preserves this equality.

Debit/credit rules: assets and expenses increase with debits; liabilities, equity, and revenue increase with credits.

Journal entry must have equal total debits and credits; a voucher with unequal totals cannot be posted.

Account classification: real (permanent) accounts carry balances forward; nominal (temporary) accounts are closed to retained earnings at period end.

Trial balance checks debit-credit equality only; it does not detect omitted transactions, wrong-account postings, or offsetting errors of equal amount.

Accrual basis: revenue is recognized when earned and expenses when incurred, regardless of cash timing.

Ledger posting rule: each journal line is posted to its account code; subsidiary ledgers must reconcile to the control account in the general ledger.

Normal balances: contra accounts (accumulated depreciation, allowance for doubtful accounts, sales returns) carry the opposite balance of their parent account.

Inventory cost formulas permitted under K-IFRS include specific identification, FIFO, and weighted average; LIFO is not permitted.

Depreciation methods: straight-line = (cost − residual value) ÷ useful life; declining balance applies a fixed rate to the carrying amount each period.

Allowance for doubtful accounts is estimated at period end and expensed; write-offs later reduce both the allowance and accounts receivable.

Revenue from contracts with customers: recognize when the performance obligation is satisfied, at the transaction price allocated to that obligation.

Bonds issued at a discount amortize the discount over the term, increasing interest expense above the nominal coupon payment.

Equity components: share capital, share premium, retained earnings, and other components; treasury shares are deducted from equity.

Closing entries zero out revenue and expense accounts into retained earnings (or income summary) before the next period opens.

Cost flow: direct materials + direct labor + manufacturing overhead = manufacturing cost; plus beginning WIP − ending WIP = cost of goods manufactured.

Product costs attach to inventory (materials, labor, overhead); period costs (selling and administrative) are expensed as incurred.

Predetermined overhead rate = estimated total overhead ÷ estimated allocation base (direct labor hours, machine hours, or direct labor cost).

Overhead variance = actual overhead − applied overhead; underapplied overhead is a debit balance, overapplied a credit balance.

Cost allocation sequence for service departments: direct method ignores inter-service usage; step-down method allocates in a ranked order; reciprocal method solves simultaneous equations.

Equivalent units under weighted average = completed units + ending WIP units × percentage of completion.

Variable costing excludes fixed manufacturing overhead from product cost; absorption costing includes it.

Joint cost allocation bases include physical units, relative sales value at split-off, and net realizable value.

VAT output tax is computed on taxable sales; input tax is deducted on purchases supported by valid tax invoices; VAT payable = output tax − input tax.

Zero-rated supplies carry a 0% rate with input tax refundable; exempt supplies bear no output tax but their input tax is not deductible.

VAT return is filed and paid by the 25th of the month following the taxable period (monthly or quarterly filers).

Corporate tax base = accounting profit ± tax adjustments (non-deductible expenses, non-taxable income, special deductions).

Taxable income is multiplied by the applicable corporate tax rate bracket; tax credits (e.g., foreign tax credit, R&D credit) reduce the computed tax.

Withholding tax on domestic source income is withheld by the payer and remitted by the 10th of the following month.

Income tax for individuals is progressive by bracket; global taxation aggregates income with deductions and tax credits.

Electronic tax invoice must be issued at the time of supply; a corrected invoice (amended) is issued for errors in amount or tax.

Company information (legal name, business registration number, fiscal year start and end, base currency) is entered once and governs all reports.

Chart of accounts uses hierarchical codes; the leading digits usually indicate the financial statement category (assets, liabilities, equity, revenue, expense).

Opening balances are entered as of the fiscal year start date; total debit opening balances must equal total credit opening balances before posting.

Subsidiary master data (customers, suppliers, items, departments) must be created before transactions can reference them.

Account properties (control account, foreign currency, tax code, cost center requirement) determine which fields appear on transaction entry screens.

Period close locks prior periods; postings into a closed period are blocked until reopened by an authorized user.

User roles and permissions separate data entry from approval; the audit trail records who created, modified, or posted each voucher.

Voucher entry: select the transaction type (sales, purchase, receipt, payment, general), enter date, accounts, amounts, and tax code, then save and post.

Posting updates the general ledger and subsidiary ledgers; unposted vouchers appear only in the voucher list, not in financial statements.

Sales voucher: debit accounts receivable, credit sales and output VAT; purchase voucher: debit purchases and input VAT, credit accounts payable.

Receipt voucher debits cash/bank and credits accounts receivable; payment voucher debits accounts payable and credits cash/bank.

Bank reconciliation matches the book balance to the bank statement; outstanding checks and deposits in transit cause the difference.

Trial balance, general ledger, and subsidiary ledgers are generated from posted data; period-end reports must be run after all postings and closings.

Financial statements (balance sheet, income statement, statement of changes in equity, cash flow statement) are produced by mapping account codes to report lines.

Year-end closing transfers net income to retained earnings and carries forward balance sheet accounts as the next year's opening balances.