Reference no: EM13369538

Ethical Code in cost & Management Accounting

CIMA has provided the following as elements of code of conduct to be followed by cost and management accounts. Define and explain them in relation to cost and Management Accounting

• Confidentiality
• Integrity
• Objective or Credibility
• Professional Competence and due care
• Professional behavior

Financial Acc.

 

Exercise

Wori corp maintains its financial recorders on the cash bases of accounting interested in securing a long term loan from its regular bank, wori corp. Requests you as its independent CPA to convert its cash-basis income statement data to the accrual basis you are provided with the following summarized data covering 2003,2004,abd2005

	2003	2004	2005
Cash receipts from sales:
On 2003 sales	$295,000	$160,000	$30,000
On 2004 sales	-0-	355,000	90,000
On 2005 sales			408,000

 

	2003	2004	2005
Cash Payment for expense:
On 2003 expenses	185,000	67,000	25,000
On 2004 expenses	40,000a	160,000	55,000
On 2005 expenses		45,000b	218,000

 

a= prepayments of 2004 expenses

b= prepayments of 2005 expenses

Instructions

a)    Using the data above, prepare abbreviated income statements for the years 2003 and 2004 on the cash basis.

b)    Using the data above, prepare abbreviated income statements for the years 2003 and 2004 on the accrual basis.