Wednesday, December 26, 2007

Cool Joke

The following post is from my friend's blog: michaelsync.net. I really liked this joke and hope you guys like it too.

Title: Young and pretty lady wishes to marry a rich guy. Fantastic reply from a financial person

A young and pretty lady posted this on a popular forum:

Title: What should I do to marry a rich guy?

I’m going to be honest of what I’m going to say here. I’m 25 this year. I’m very pretty, have style and good taste. I wish to marry a guy with $500k annual salary or above. You might say that I’m greedy, but an annual salary of $1M is considered only as middle class in New York. My requirement is not high. Is there anyone in this forum who has an income of $500k annual salary? Are you all married? I wanted to ask: what should I do to marry rich persons like you? Among those I’ve dated, the richest is $250k annual income, and it seems that this is my upper limit. If someone is going to move into high cost residential area on the west of New York City Garden (?), $250k annual income is not enough.

I’m here humbly to ask a few questions:

1) Where do most rich bachelors hang out? (Please list down the names and addresses of bars, restaurant, gym)
2) Which age group should I target?
3) Why most wives of the riches is only average-looking? I’ve met a few girls who doesn’t have looks and are not interesting, but they are able to marry rich guys
4) How do you decide who can be your wife, and who can only be your girlfriend? (my target now is to get married)

Ms. Pretty
**************

Here’s a reply from a Wall Street Financial guy:

Dear Ms. Pretty,

I have read your post with great interest. Guess there are lots of girls out there who have similar questions like yours. Please allow me to analyze your situation as a professional investor. My annual income is more than $500k, which meets your requirement, so I hope everyone believes that I’m not wasting time here.

From the standpoint of a business person, it is a bad decision to marry you. The answer is very simple, so let me explain. Put the details aside, what you’re trying to do is an exchange of ‘beauty’ and ‘money’: Person A provides beauty, and Person B pays for it, fair and square. However, there’s a deadly problem here, your beauty will fade, but my money will not be gone without any good reason. The fact is, my income might increase from year to year, but you can’t be prettier year after year. Hence from the viewpoint of economics, I am an appreciation asset, and you are a depreciation asset. It’s not just normal depreciation, but exponential depreciation. If that is your only asset, your value will be much worried 10 years later.

By the terms we use in Wall Street, every trading has a position, dating with you is also a ‘trading position’. If the trade value dropped we will sell it and it is not a good idea to keep it for long term, same goes with the marriage that you wanted. It might be cruel to say this, but in order to make a wiser decision any assets with great depreciation value will be sold or ‘leased’. Anyone with over $500k annual income is not a fool; we would only date you, but will not marry you. I would advice that you forget looking for any clues to marry a rich guy. And by the way, you could make yourself to become a rich person with $500k annual income. This has better chance than finding a rich fool.

Hope this reply helps. If you are interested in ‘leasing’ services, do contact me.

signed, J.P. Morgan

ACCA F1 Exam Experience

I attempted ACCA F1(Accountant in Business) exam in december 2007. What surprised me the most is that quite a number of exam questions are based on the knowledge which I have never studied before. To be honest, I diligently studied Kaplan textbook for this module. It actually covers quite a lot of topics in its 600 over pages altogether but i feel it does notcover enough topics for the exam. I have checked with my friends who attempted the same exam and they did have problems too.


Many questions that came across my mind during or right after the exam.
  • Are those exam questions which I did not know how to answer really in the context of the syllabus?
  • If they are not, what is the purpose of the examiner?
  • If they are, why Kaplan textbook does not cover them?
  • Is an acca student supposed to study more than one textbook?

I attempted f1, f2 and f3 in december 2007 and my expectation before the exam was that f1 would be the easiest among them but it turned out to be totally wrong. Well that is the case with me at least!

Tuesday, December 25, 2007

Aid for an ACCA F3 Student I

The difference between having an easy life studying ACCA F3 and the tough struggle againt it mainly depends on your understanding about one of the most basic accounting concept named double entry accounting. Although, at times, this might seem quite trivial to some people, I firmly believe that the understanding of this is the most basic and the most important step to take for every student accountant before embarking the journey of financial accounting. Let's dig in a litter deeper into what I am talking about.

Double Entry Concept

Each transaction that a business enters into affects the financial statements in two ways; e.g, a business buys a building for cash. This transaction have two effects on the financial statements.

1. There is an increase in buildings.
2.There is a decrease in cash.

To follow the rules of double entry bookkeeping, each time a transaction is recorded, both effects must be taken into account. These two effects are equal and opposite such that the accounting equation ' Assets - Liability = Capital' will always prove correct. Traditionally one effect is referred to as the debit side and the other as the credit side of the entry.

A quick reference to wiki about this is here.

Please let me repeat again here. This is one of the most important keys to unlock ACCA F3.

Monday, December 24, 2007

ACCA F2: Formula Guide

Things you should remember before entering the exam hall for ACCA F2 or before you start practicing Past Exam Papers: This is some kinda acca f2 formula guide.


************************************************************************************
Material
************************************************************************************
1) Reorder Level=Maximum Usage * Maximum Lead Time


2)Minimum Stock Level=Reorder Level - (Average Usage * Average Lead Time)


3)Maximum Stock Level=Reorder Level + Reorder Quantity - (Minimum Usage * Minimum Lead Time)
************************************************************************************
************************************************************************************



************************************************************************************
Variance
************************************************************************************
4)Sales Margin Price Variance is the difference between a and b.

a. Actual Sales Qty x Actual Selling Price
b. Actual Sales Qty x Standard Selling Price


5)Sales Margin Volume Variance in Absorption Costing is the difference between a and b.

a. Actual Sales Qty x Standard Profit Margin
b. Standard Sales Qty x Standard Profit Margin



6)Sales Margin Volume Variance in Marginal Costing is the difference between a and b.

a. Actual Sales Qty x Standard Contribution
b. Standard Sales Qty x Standard Contribution


7)Material Price Variance is the difference between a and b.

a. Actual Qty Purchased x Actual Price
b. Actual Qty Purchased x Standard Price


8)Material Usage Variance is the difference between a and b.

a. Actual Qty Usage x Standard Price
b. Standard Usage for Actual Production x Standard Price


9)Labor Rate Variance is the difference between a and b.

a. Actual Hours Paid x Actual Rate
b. Actual Hours Paid x Standard Rate


10)Labor Efficiency Variance is the difference between a and b.

a. Actual Hours Worked x Standard Rate
b. Standard Hours for Actual Production x Standard Rate


11)Variable Overhead Expenditure Variance is the difference between a and b.

a. Actual Variable Overhead
b. Actual Hours Worked x VOAR


12)Variable Overhead Efficiency Variance is the difference between a and b.

a. Actual Hours Worked x VOAR
b. Standard Hours for Actual Production x VOAR


13)Fixed Overhead Expenditure Variance is the difference between a and b.

a. Actual Fixed Overhead
b. Budgeted Fixed Overhead


14)Fixed Overhead Capacity Variance is the difference between a and b.

a. Budgeted Fixed Overhead
b. Actual Hours Worked x FOAR


15)Fixed Overhead Efficiency Variance is the difference between a and b.

a. Actual Hours Worked x FOAR
b. Standard Hours for Actual Production x FOAR

************************************************************************************
************************************************************************************



************************************************************************************
Labor
************************************************************************************
16)Halsey's Scheme to calculate bonus.

Time Allowed - Time Taken
-----------------------------
2


17)Rowan's Scheme to calculate bonus.

Time Taken
----------------- x Time Saved x Time Rate
Time Allowed
************************************************************************************
************************************************************************************



************************************************************************************
Cost-Volume-Profit Analysis
************************************************************************************
18) C\S Ratio

Contribution per unit
------------------------
Selling price per unit


19) BEP(units)

Fixed Cost
-------------------------
Contribution Per unit


20)BEP($)

Fixed Cost
-------------
C/S Ratio


21)MOS($)=Budgeted Revenue - BEP($)


22)MOS(units)=Budged Sales Units - BEP(units)


23)MOS(%)

Budgeted Sales - BEP Sales
--------------------------------- x 100
Budgeted Sales


24)Target Sales Units

Fixed Cost + Target Profit
------------------------------
Contribution per unit
************************************************************************************
************************************************************************************

The Joy of Tech III