14. Incomplete Records Flashcards
1
Q
What might cause records to be incomplete?
A
- Incompetence
- Fraud
- Other events e.g. fire or tech failure
2
Q
What does a profit margin of 40% mean?
A
Sales 100%
Cost of Sales 60%
Gross Profit 40%
- Profit as a % of Sales
3
Q
What does a markup of 40% mean?
A
Sales 140%
COS 100%
Gross Profit 40%
- Profit as a % of COS
4
Q
When reconciling incomplete records, what is the calculation for purchases?
A
Payment plus increase (or less decrease) in creditors
5
Q
When reconciling incomplete records, what is the calculation for sales?
A
Receipts plus increase (or less decrease) in receivables
6
Q
What is the calculation for profit?
A
Closing Capital + Drawings - Capital Introduced - Opening Capital
