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Finance Technical Assessment

Accruals refer to expenses recognized in the accounting period they are incurred regardless of payment. Provisions refer to liabilities recognized for obligations from past events whose timing or amount is uncertain. The two biggest expense items are likely salaries and rent. Depreciation policy for the office renovation should set the useful life at the rental period to match expenses with period of use. Management accounts and financial accounts may differ in treatment of accruals and provisions, but the bottom line is the same.

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12 views3 pages

Finance Technical Assessment

Accruals refer to expenses recognized in the accounting period they are incurred regardless of payment. Provisions refer to liabilities recognized for obligations from past events whose timing or amount is uncertain. The two biggest expense items are likely salaries and rent. Depreciation policy for the office renovation should set the useful life at the rental period to match expenses with period of use. Management accounts and financial accounts may differ in treatment of accruals and provisions, but the bottom line is the same.

Uploaded by

ardiyuda
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Finance Technical Assessment

1. Describe the main difference between Accruals and Provisions.

2. Based on your understanding of our business, what do you think would be the 2
biggest expense items in our P&L?

3. If you were to recommend the Depreciation Policy for our office renovation, how
would you set the useful life of the asset? (Assume we rent the office.) And the
reason?

4. What is your interpretation of Management Accounts and Financial Accounts? Is


there any difference in the bottom line figure of both sets of accounts?
Finance Technical Assessment

5. Assuming you are keeping the books of a company that has only 1 employee. Basic
monthly salary is SGD 5,000. 30% of basic salary needs to be contributed to Central
Provident Fund by both an employee (20%) and the company (10%). Please work out
the following:

a. Net Amount Payable to the employee in Cash? ______________

b. Amount of contribution to Central Provident Fund?

Employee ________________ and Employer ________________

c. Amount of total cash outlay by the company as a result of employing this person?

____________________________

d. Journal Entries for the Payroll entries that you need to put through in the book
when you process payroll at month end? (Central Provident Fund is payable later
in the subsequent month.)

e. What are the journal entries when the company pays Central Provident Fund to
the government authority in the subsequent month?
Finance Technical Assessment

6. This is an example of how we charge our clients when we fill a position with a
suitable candidate for our clients:

The total consulting fee for the whole assignment is 30% of the offered actual annual
remuneration of the successful candidate or minimum SGD 30,000, whichever is
higher.
Our fees are payable in 3 stages:

a. Authorization fee is payable upon signing of Terms of Service with us. It is


charged based on 10% of the estimated annual remuneration of the position or
minimum SGD 10,000, whichever is higher;

b. Shortlist fee is payable upon presentation of shortlisted candidates reports to


clients. It is charged based on 10% of the estimated annual remuneration of the
position or minimum SGD 10,000, whichever is higher;

c. Final fee is payable upon signing of Letter of Offer by the successful candidate. It
is charged based on the balance consulting of 30% of the actual annual
remuneration offered to the successful candidate (or SGD 30,000 less the
Authorization and Shortlist fee; whichever is higher).

Scenario:
Assuming client has a budget of SGD 200,000 for the vacant position that we are
working on. What would be the amount to be charged for:

Authorization fee? __________________

Shortlist fee? __________________

i. Assuming the successful candidate signs the Letter of Offer for the annual
package of SGD 150,000, what would be the balance amount to be charged
for the final fee?

___________________________

ii. If the successful candidate’s package was SGD 120,000, what would be the
balance amount chargeable for the final fee?

___________________________

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