Chapter 18 - Incomplete records

Question 1

What is the equation for markup?

Answer 1

Gross profit / cost of sales X 100

Question 2

What is the equation for margin?

Answer 2

Gross profit / sales revenue X 100

Question 3

What is the accounting equation?

Answer 3

Assets = Liability + capital

Question 4

What is the equation to find the closing capital?

Answer 4

Opening capital X
Capital introduced X
Add/loss net profit. X/(X)
Less: Drawings

Question 4

What is the equation for equity?

Answer 4

Share capital + Retained earnings

Question 5

What is the equation for closing retained earnings?

Answer 5

Opening R.E + Shares - Dividends

Question 6

The credit sales figure can be derived from where?

Answer 6

From preparing a trade receivables’ ledger control account.

Question 7

Is contra debit or credit for receivables?

Answer 7

In credit side

Question 8

Is contra debit or credit for payables?

Answer 8

In debit side

Question 9

What is the equation for finding sales in the year?

Answer 9

Bal b/d - sales returns - contra - irr debts - bal c/d - cash from customers

Question 10

What is the equation for finding purchases?

Answer 10

• B/d + cash paid + contra + discounts received + Purchase returns + b/cd

Question 11

Markup is only on sales or cost?

Answer 11

cost

Question 12

Margin is only on sales or cost?

Answer 12

Sales

Question 13

What is markup?

Answer 13

Expresses profit as a % of cost, e.g., a markup of 25% means that profit is 25% of the cost figure

Question 14

what is margin?

Answer 14

Expresses profit as a % of selling price e.g., margin of 25% means that 25% of the selling price is profit

Question 15

Can you multiply margin on cost?

Answer 15

no