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CSS Accounting and Auditing Specialized and Corporate Accounting Flashcards
51 question-and-answer cards covering Specialized and Corporate Accounting as it is examined in CSS Accounting and Auditing. 24 of them are printed below, taken from across the deck — no signup, no paywall on the preview.
24 sample cards from the Specialized and Corporate Accounting deck
Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.
Give the journal entry for forfeiture of shares originally issued at par (calls in arrears).
$\text{Share Capital A/c}\;\text{Dr}$ (called-up amount) to $\text{Share Forfeiture A/c}$ (amount received) and to $\text{Calls in Arrears / Share Allotment & Call A/c}$ (amount not received).
What is the difference between redeemable and irredeemable (perpetual) debentures?
Redeemable debentures are repaid by the company after a fixed period or on demand. Irredeemable (perpetual) debentures carry no fixed repayment date and are repayable only on winding up or breach of conditions; ongoing interest is paid until then.
What is a Debenture Redemption Reserve (DRR) and why is it created?
A DRR is a reserve created out of divisible profits and set aside before debentures are redeemed. Its purpose is to protect investors by ensuring funds are available for redemption, reducing reliance on fresh borrowing or capital depletion.
State the legal sources from which a company may redeem preference shares.
Preference shares may be redeemed only out of: (1) divisible profits otherwise available for dividend, or (2) the proceeds of a fresh issue of shares made for the purpose. Premium on redemption is met from securities premium or profits.
When preference shares are redeemed out of profits, what reserve must be created and why?
A Capital Redemption Reserve (CRR) equal to the nominal value of shares redeemed out of profits must be created, by transfer from divisible profits. This maintains the company's capital base to protect creditors (capital maintenance).
Name the methods commonly used to redeem debentures.
(1) Lump-sum payment at maturity; (2) payment in annual instalments by drawing lots; (3) purchase in the open market (for cancellation or investment); and (4) conversion into new shares or debentures.
What are the two main statements that comprise the final accounts of a company, and their purposes?
The Statement of Profit and Loss (Income Statement), which shows revenues, expenses, and net profit/loss for the period; and the Balance Sheet (Statement of Financial Position), which shows assets, liabilities, and equity at the period end.
How is the operating profit (EBIT) margin expressed as a formula in company final accounts analysis?
$\text{Operating Profit Margin} = \dfrac{\text{Operating Profit (EBIT)}}{\text{Net Sales}} \times 100$, where EBIT is profit before interest and tax.
What is the Profit and Loss Appropriation Account of a company used to show?
It shows the disposal/distribution of net profit after tax: transfers to reserves, proposed/interim dividends, dividend distribution tax (where applicable), and the balance of retained earnings carried forward to the next year.
Distinguish between interim dividend and final dividend.
An interim dividend is declared by the Board of Directors between two annual general meetings, out of current profits, before the final accounts are finalised. A final dividend is recommended by directors and approved by shareholders at the AGM after the year-end accounts are adopted.
What is the difference between a capital reserve and a revenue reserve?
A capital reserve arises from capital profits (e.g. premium, profit on reissue/forfeiture, redemption) and is generally not available for dividend distribution. A revenue reserve is created from trading/operating profits and is freely available for distribution as dividend.
What is the fundamental distinction between a Receipts and Payments Account and an Income and Expenditure Account of a non-profit organisation?
The Receipts and Payments Account is a summarised cash book (real account) recording all cash received and paid—capital and revenue, of any period. The Income and Expenditure Account is a nominal account recording only revenue items of the current period on an accrual basis to find surplus/deficit.
List the key features of a Receipts and Payments Account of an NPO.
It starts with the opening cash/bank balance and ends with the closing balance; records all cash transactions (capital and revenue) irrespective of the period to which they relate; ignores non-cash items like depreciation; and the debit side shows receipts, the credit side shows payments.
How are surplus and deficit determined in an Income and Expenditure Account?
If income (credit side) exceeds expenditure (debit side), the balance is a Surplus (excess of income over expenditure). If expenditure exceeds income, it is a Deficit. The balance is transferred to the Capital/General Fund in the balance sheet.
How is the Capital Fund (General Fund) of an NPO typically computed at the start of a year?
$\text{Capital Fund} = \text{Total Assets} - \text{Total Liabilities}$ (a balancing/opening figure). During the year it is increased by surplus and capitalised items (e.g. life membership, legacies) and decreased by any deficit.
How are subscriptions adjusted to find the amount to be shown as income in the Income and Expenditure Account?
$\text{Subscription Income} = \text{Subscriptions received} + \text{Outstanding at year end} + \text{Advance at beginning} - \text{Outstanding at beginning} - \text{Advance at year end}$ (recognise only the current year's subscriptions).
How are dependent (debtors-system) branches characterised and what type of account is used to control them?
Dependent branches keep no full double-entry books; the head office maintains control. A Branch Account is prepared at head office (debtors system for small branches) to ascertain branch profit or loss; goods are usually invoiced at cost or at selling/invoice price.
Under the stock-and-debtors system for a dependent branch, name the key accounts maintained at head office.
Branch Stock Account, Branch Debtors Account, Branch Expenses Account, Goods Sent to Branch Account, Branch Adjustment Account (for loading/profit margin), and Branch Profit and Loss Account.
When goods are invoiced to a dependent branch at a price above cost, how is the loading (profit margin) on unsold stock handled?
A stock reserve is created for the unrealised profit loaded into closing branch stock: $\text{Stock Reserve} = \text{Closing Branch Stock} \times \dfrac{\text{Loading}}{\text{Invoice Price}}$, removed via the Branch Adjustment Account so profit reflects only realised margins.
What distinguishes an independent branch from a dependent branch in accounting terms?
An independent branch maintains its own complete set of double-entry books, prepares its own trial balance, trading and P&L account, and balance sheet, and operates a reciprocal Head Office Account; the head office keeps a Branch Account, the two being reconciled and combined at year end.
In independent branch accounting, why might the Head Office Account and Branch Account balances differ, and how is this resolved?
They differ because of transactions in transit (cash or goods sent but not yet received) or unrecorded items. They are reconciled by recording the in-transit/unadjusted items before consolidation, after which the two reciprocal accounts should agree and cancel out.
Why are departmental accounts prepared, and what is the basic principle for apportioning common expenses among departments?
They are prepared to ascertain the profit or loss of each department separately for control and decision-making. Common (indirect) expenses are apportioned on an equitable basis—e.g. rent on floor area, lighting on points/area, carriage on purchases, and selling expenses on sales of each department.
How are inter-departmental transfers treated, and what adjustment is needed when goods are transferred above cost?
Transfers are recorded by debiting the receiving department and crediting the supplying department (at cost or transfer price). If transferred above cost, the unrealised profit included in unsold inter-departmental stock at year end must be eliminated by creating a Stock Reserve so combined profit is not overstated.
In consignment accounts, distinguish the roles of the consignor and consignee, and state the nature of their relationship.
The consignor is the principal who sends goods; the consignee is the agent who sells them on the consignor's behalf. Their relationship is one of principal and agent (not buyer and seller); ownership and risk of goods remain with the consignor until sold, and the consignee earns commission. Valuation of unsold consignment stock includes proportionate non-recurring expenses: $\text{Stock Value} = \text{Cost of unsold units} + \text{Proportionate non-recurring (and consignor's direct) expenses}$.
What this deck covers
The Specialized and Corporate Accounting deck follows the CSS Accounting and Auditing Specialized and Corporate Accounting syllabus — 6 chapters and 21 topics — so questions land on material that is genuinely examinable rather than trivia around it. That works out to roughly 8.5 cards per chapter.
Answers are written to be recallable, not just readable — averaging about 259 characters, which is long enough to carry the reasoning and short enough to say out loud.
A deck like this earns its keep on the second and third pass. Read the syllabus first so you know the shape of the subject, then use the cards to find the specific facts that have not stuck.
Specialized and Corporate Accounting flashcards FAQ
How many Specialized and Corporate Accounting flashcards are in this CSS Accounting and Auditing deck?
51 cards. This page previews 24 of them, sampled evenly across the deck so you can judge the difficulty before installing anything.
Are these CSS Accounting and Auditing flashcards free?
Yes. The preview here is free to read with no signup, and the full 51-card deck is free inside the Examius app.
What do the Specialized and Corporate Accounting cards cover?
They follow the CSS Accounting and Auditing Specialized and Corporate Accounting syllabus — 6 chapters and 21 topics — so the questions track what is actually examinable.
How should I use these flashcards?
Read the syllabus first so you know the shape of the subject, then drill the deck. Examius schedules each card with spaced repetition, so cards you keep missing come back sooner and ones you know drift further apart.