Solutions to Questions
One of the problems that most students of accounting face is being able to tackle calculation problems. The ‘fear of numbers’ is quite common with postgraduate students and practising managers. Students often look back to find a similar ‘model question’ and then try to repeat the calculation, simply replacing the numbers. This is not good practice as it does not help the student to think about the concepts involved. Each problem is different, and this mirrors day-to-day business decisions. Solving these problems is about applying the underlying concepts.
The questions in each chapter require the reader to perform calculations. In attempting to solve these problems, you need to think about
Accounting is a collection of systems and processes used to record, report and interpret business transactions. An account is an explanation or report in financial terms about those transactions. Accountability arises from the stewardship function under which managers have to provide an account to other stakeholders in the business.