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Directions for solving Balance sheet and Income statement questions in MS Word.

G

George Philip

Active Member
I was practicing solving Balance sheet and Income statement questions and was struggling with time management and would like to know if anyone has any advice/techniques to increase efficiency?

Also, want to ask whether it is allowed to prepare the Balance sheet and Income statement in MS Excel and then copy it into a Word Doc? Is this within the guidelines?

Edit: And lastly is there an order which is preferred when solving "Account Constructing" questions i.e. is it better to prepare Income statement first and then balance sheet and vice versa?
 
Hi

Hopefully familiarity helps with the efficiency of producing the financial statements. Most people find that they naturally get quicker at doing these questions the more of them that they practice.

In terms of order, note that the 'earnings' or 'profit for the year' from the income statement is required to complete the equity section of the balance sheet. So, you either need to prepare the income statement first, or else produce the two statements concurrently. (Also, an aside but worth a mention, these statements are generally now referred to as the statement of profit or loss and the statement of financial position in the Core Reading).

I'd strongly recommend reading the IFoA Examination Handbook and Assessment Regulations for the definitive rules. In particular, paragraph 5 of the Examination Handbook covers copying and pasting from Excel.
 
Thank you Lynn for your response.

Going through the hand book its stated as such:

"Most of the examination subjects require the answers to be provided in Microsoft Word. The exceptions to this are CP2, CM1 Paper B and CM2 Paper B which require the use of Excel. When sitting subjects which require answers to be provided in Word, you may wish to use another software package to aid with calculations. You will be able to copy and paste this calculations on your submission, however, it should be noted that any calculations should appear in full in your Word answer script to ensure you receive the appropriate marks. If you do not display your full workings then examiners will not be able to assess how your answer was determined, and full marks may not be awarded."

From this can I take that we can construct the accounts in excel and copy to word as long as full working is shown?
 
Hi George

To me that seems in line with the handbook, provided full working is shown as you say. Full disclosure though: IFoA (rather than ActEd) are of course the judges here for what is ok, so it may be worth emailing the IFoA to clonfirm your intended approach is ok.

Best wishes
Lynn
 
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