KEEP CALM AND EXAM ON PART 1 3E

to adjust for PREPAID expenses.

• Expenses INCREASE

• Expenses

  REDUCE

PREPAID expense =

• current ASSET

• current LIABILITY

to adjust for INCOME RECEIVABLE

• income INCREASE

• income REDUCE

income RECEIVED IN ADVANCE =

• current

  ASSET

• current

  LIABILITY

Allowance for impairment of trade receivables =

• expense

• contra asset

impairment loss on trade receivables =

• expense

• contra asset

(Cost - Scrap)/ No of years

• Straight-line

  method

• reducing-balance

  method

DEPRECIATION of equipment =

• expense

• contra asset

to calculate gain/ loss on sale of NCA =

• selling price - cost

• selling price - net book value

GAIN on sale of nca =

• INCREASE profit

• REDUCE profit