EVERYDAY

Question 1

Write out everything in a Statement of Profit and Loss

Answer 1

Revenue
Cost of Sales
opening inventory
purchases
(closing inventory)

Gross Profit
(distribution costs)
(administrative expenses)

Operating Profit
(finance costs)

Profit/Loss before Tax
(income tax)

Net Profit/Loss

Question 2

Write out everything in a Statement of Financial Position

Answer 2

Non-current assets
Land and Buildings
Plant and Equipment

Current assets
Inventories
Trade Receivables
Accrued Income
Cash and cash equivalents
Total assets

Equity
Ordinary share capital
Preference share capital
Share premium
Retained earnings

Non-current liabilities
Borrowings

Current liabilities
Accrued interest
Dividend payable
Trade payables
Deferred income
Tax payable
Overdraft
Provisions

Total equity and liabilities

Question 3

Depreciation double entry

Answer 3

Dr Depreciation Expense (P&L)
Cr Acc Dep (SFP)

Question 4

Irrecoverable Debts double entry

Answer 4

If definitely written off:
Dr Irr Debt Expense (P&L)
Cr Receivables (SFP)

If maybe written off
Dr Irr Debt Expense
Cr Allowance

Question 5

What is on a Statement of Cash Flows

Answer 5

Cash flows from operating activities
Profit before tax
Finance costs
(Investment/finance income)
Depreciation
Amortisation
(Profit)/loss on sell of PPE or intangibles
Inventories (increase)
T/R (increase)
T/P (decrease)

Cash generated from operating activities
(Tax paid)
(Interest paid)
Net cash from/used in operating activities

Cash flows from investing activities
(Purchase of PPE)
(Purchase of intangible assets)
Proceeds from sale of PPE/intangibles
Interest received
Net cash from/used in investing activities

Cash flows from financing activities
Proceeds from issue of shares
Movement in borrowings
(Dividends paid)
Net cash from/used in financing activities

Net increase/decrease in cash and cash equivalents

Cash and cash equivalents at beginning
Cash and cash equivalents at end of year

Question 6

How do the capital and equity sections on the SFP change for sole traders and companies?

Answer 6

Sole traders:

Capital
Opening capital
+ capital introduced
+ profit
- drawings

Companies:

Equity
Share capital
Share premium
Retained earnings (opening balance + profit - dividends)