Accounting reference lists…

I just wandering around, browsing for some songs and some accounting information while finishing on something that I really need to do. Sigh! BUT I came across some good sites for students to do some researching or knowledge seeking. Websites, videos, slides etc…So I will post some first and maybe if I have time, I will continue to contribute here…


BUS1233 – PTPTN Session

I just got to know that today there will be a PTPTN session. So, I assume that you guys are busy completing all the required documents to be submitted to PTPTN. Therefore, today’s class is not compulsory. I will be at my place just doing my routine.


Date        : 15th August 2017

Day          : Tuesday

Time        : 9.00 a.m. until 5 p.m.

Venue      : International Islamic College Great Hall

Good luck

Week 5 – Valuing Shares and Bonds

Bonds are an investment ‘asset’ and their price (or value or worth) is the present value of their future cash flows. The bond contract is a special kind of business agreement. The deed of trust (bond indenture) states the explicit terms of the agreement such as the (fixed) coupon rate and the face value to be paid on the bond. The legal effect of having the agreement enshrined in a deed of trust rather than a contract of sale, means that the bond carries a stronger security of claim and lower probability of default risk. The economic effect of the trust deed means that the bond purchaser gains greater certainty over the cash flows the bond will generate. The bond must be held to maturity for it to generate the quoted yield.  The bond price remains subject to interest rate changes in the market.

The inverse relationship between interest rates and values is particularly relevant to bond markets.  If interest rates surge because of unexpected rises in inflation for example, bond prices fall analogously.  Bondholders then face the double stress of a lower bond value and lower interest income on their fixed-rate investment. Conversely, if there is a surge in demand for bonds, their yields may fall. This phenomenon has been recently reported in the US Junk bond market (BBB credit rating and below). Investors who were reportedly unhappy with the low returns being paid on secure bonds, increased their demand for riskier securities. They reportedly spent $US4.6 billion in the first six weeks of 2011 in the BBB-rated and below bond markets. This sent the high-risk class of bond yields down to extremely low levels.


Essentially, the market pricing mechanism ensures that everyone gets the same deal no matter what coupon interest rate the issuer is paying. If the bond coupon rate is above the market average, you have to pay more for the bond; if the bond coupon rate is below the market average, you pay less for the bond; and if the bond coupon rate is equal to the market average, you pay the same as the face value of the bond.

Here are some slides and notes for bonds.



Week 5a

Week 5 (Ch 6) Tutorial Questions

So another alternative for a company to raise funds is issuing stocks (shares). Take alook at this video…


Try to understand that first and we shall discuss later when we meet. Next, maybe I will touch a bit regarding the type of bonds…



BUACC3701 – Fisher’s separation theorem and The “Market Value Rule”

Hi guys, here are some notes just for you to read. I took them from the internet as I think they are quite important. You might find something in the YouTube if you want to avoid getting sleepy reading this. Hahaha

What is Fisher’s separation theorem?

By Richard Wilson

Fisher’s separation theorem stipulates that the goal of any firm is to increase its value to the fullest extent, regardless of the preferences of the firm’s owners. The theorem is named after American economist Irving Fisher, who first proposed this idea.

The theorem can be broken down into three key assertions. First, a firm’s investment decisions are separate from the preferences of the firm’s owners. Second, a firm’s investment decisions are separate from a firm’s financing decisions. And, third, the value of a firm’s investments is separate from the mix of methods used to finance the investments.

Thus, the attitudes of a firm’s owners are not taken into consideration during the process of selecting investments, and the goal of maximizing the firm’s value is the primary consideration for making investment decisions. Fisher’s separation theorem concludes that a firm’s value is not determined by the way it is financed or the dividends paid to the firm’s owners.

For related articles, check out Ten Books Every Investor Should Read and Profiting From Panic Selling.

This question was answered by Richard C. Wilson.

Read more: What is Fisher’s separation theorem?
Follow us: Investopedia on Facebook



The “Market Value Rule”

If you have ever lived in a property and then began to rent it out to produce income, then the application of the “market value rule” is something you need to be aware of.

If you first commenced to rent out your main residence after 20 August 1996, you have the option of obtaining a valuation of the value of the property as at that date which then becomes the “deemed purchase price” for any future capital gains tax calculations. This will ensure that any capital gain that as accrued up until the time the property was first used to produce income is effectively disregarded.

Although not clear from a literal reading of the Tax Act, based on the advice from the Tax Office, it appears that where the market value rule applies, the property’s entire purchase price including legal fees, etc, is replaced with the property’s market value.

This means that all expenditure incurred in relation to the property before it first became income producing, is replaced with the property’s market value at the first income time.

However, any cost base expenditure incurred after the first income time, will be included in the property’s cost base in addition to the property’s market value  at the first income time.

For example, let’s say a property was valued at $350,000 at the first income producing time. A number of improvements were made to the property after it commenced producing income. The cost of these improvements would be added to the $350,000 to form the cost base for any future capital gains tax calculations.

If you initially purchased your property, lived in it, then commenced renting it after 20 August 1996, the market value could be extremely valuable in your endeavours to reduce any capital gains tax payable.

 If you have any questions regarding the market value rule and how you might take advantage of it, please contact Ellingsen Partners.

ACC2231 – Single entry and incomplete records

Hi again,

Looking at the topic, we might be asking why it is a single entry? Well, some business owner does not really know how to do accounts…I mean, they don’t know how to record all the transactions properly. It is normal and the answers we get from them is almost the same, that they knew but they don’t have the time to do it.

Normal accounting records should gave both debit as well as credit. Here, what we can say is, when when the records in only filled one sided, either debit or credit. Disaster! And it is a fail system where it should be double entry instead. They may only know to record the entry in the cashbook only because, there where the money goes in and out. For them CASH IS KING!. As long as they can control the cash, then, that’s it.

This single entry somehow potentially causing the financial statement to be incorrect, simple…not balance!.

There are two approaches to settle this matter.

  • Comparison method
  • Analysis method


Comparison Method

A quick method to determine ‘estimated’ profit without preparing financial statement. can it be? What choice do we have when we are force to do the accounts with limited information or no records available.

In determining the profit for the year, we shall go back to basic. We have to play with the capital account. Logically, when we started a business, we had capital, and this capital is being invested into the business and there…the business is built.

The business activities ie the buying, the selling of goods will eventually created profits or losses. Thus, those profits or losses will effect the capital which the owner invested. If the business had a good profit, the capital account will grow and vice versa.

In this method, the profit or losses can be determined from the difference between the owner’s capital at the end and the owner’s capital at the beginning. If it is increased, then it is profit, if the capital amount is lesser than the previous period, then it is said that the company is having a loss. Therefore we need to open up the Statement of Affairs. This statement shows an estimate assets and liabilities of the business at a particular date, the beginning and also at the end of a period. The the difference between the two is the profit for the period.


Analysis Method

The analysis method came into the picture to overcome the weakness of comparison method. This method involves the analysis of all transactions that related to sales, purchases, expenses, revenues and cashbooks.

Using this method, we will again use our knowledge of control accounts and other topics that we have already covered. Further we will use as many information available to find our answers. For example, to find total sales, we need to look at the cashbook, the opening balance of our receivables as well as our closing. Open up our control account and start put in the figures, the missing figures then will be your answers. Same goes to purchases and other expenses…

Try this….Exercise 1 – Single entry and incomplete records – Fitri and Hafiz – Analysis Method

Another one….just calculate for a), b) and c). Fitness Club – Receipts and Payments Account