Creating income statements And Statement Of Financial Position (layouts)o Flashcards
What must the title of an income statement be like?
Income statement for the year/ month ending (date in full) for (name)
What does the Income statement section form Sales to gross profit look like?
Sales
Less returns in
Less Cost of sales (label needed)
Opening inventory
Purchases
Less returns out
Less goods own use
+ carriage in
Less closing inventory
Cost of sales (taken off sales)
Gross profit
+ additional income
What are some examples of additional income?
Rent received
Commission received
Discount received
Bad debts recovered
Recovery of irrecoverable debt
Profit on disposal of NCA
Decrease in provision for doubtful debts
What are some examples of things that go in the expenses section of the income statement?
Provision for depreciation (only that year)
Bad debts written off
Provision for doubtful debts (creation full, or increase)
Loss on disposal of NCA
Discount allowed
Carriage out
Rent and rates
Salaries
Telephone
Other expenses
How ill the end of an income statement be for a limited company?
Operating profit
Less: Finance costs (interest)
Profit before tax
Less: Tax
Profit for the year after tax and interest
What will the title of a SFP need to look like?
Statement of financial position at (date in full) - for (name)
What will the NCA section of an SFP look like?
Cost. Prov depreciation. NBV
(Cumulative)
Premises X. (X). X
Motor vehicles
Fixtures and fittings
What will the current assets section look like on an SFP?
Closing inventory
Trade receivables (minus bad debt)
Less: provision for doubtful debt (full)
Prepayments of expense (other receivables)
Accruals of income (other receivables)
Cash and other equivalents
What will the capital section of an SFP look like? (Sole trader)
Capital at …
Profit for the year (+)
Less drawings (add goods own use)
What will the capital section of an SFP look like? (Limited company)
Ordinary shares
Share premium
Revaluation reserve
Retained earnings (contains profit for year)
What will the NCL section of an SFP look like?
Long term loans (loan, debenture) if payable in next year can become a CL
What will the CL section of an SFP look like?
Trade payables
Accruals of expense (other payables)
Prepayments of income (other payables)
Short term loans
Cash and other equivalents (over draft)
What are the 2 types of depreciation and how are they done?
Straight line- same amount taken off as a % of original cost
Reducing balance- take previous depreciation off cost and then times by %
What is provision for doubtful debts?
Estimate of the likely % trade receivables which may go bad in one period
How would you calculate the provision for doubtful debt?
If being created you will times the trade receivables by the given % after this only the increase or decrease on IS and Full amount from TR in SFP
