Final accounts Details Flashcards

1
Q

Examples of internal stakeholders

A

-Owners/shareholders
-Managers
-Employees

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2
Q

Examples of external stakeholders

A

-Pressure groups/Unions
-Suppliers
-Government
-Bank
-Media
-Competition
-Customers

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3
Q

Format of a statement of profit or loss

A
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4
Q
A
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5
Q

Format of a statement of profit or loss(for non-profit social enterprises)

A
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6
Q

Examples of expenses

A

-Rent
-Advertising
-Lighting
-Administrative staff salaries
-Transport

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7
Q

In statements of financial position/balance sheets, net assets and equity must always be equal(T/F)

A

True

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8
Q

Examples of current assets(in statements of financial position)

A

-Cash
-Debtors
-Stock

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9
Q

Examples of current liabilities(in statements of financial position)

A

-Overdrafts
-Trade creditors
-Short-term loans

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10
Q

Examples of current assets(in statements of financial position)

A

-Buildings
-Machinery and equipment
-Vehicles

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11
Q

Examples of current assets(in statements of financial position)

A

-Borrowing(long-term)
-Mortgage

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12
Q

In statements of financial position, depreciation is accounted for for non-current assets(T/F)

A

True

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13
Q

Formula for total equity

A

Total equity = Retained earnings + Share capital(for-profit only)

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14
Q

Examples of intangible assets

A

-Patents
-Copyright
-(Registered) trademark
-Goodwill

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15
Q

Format of a statement of financial position

A
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16
Q

Elements in a statement of profit or loss

A

Sales revenue → Cost of sales → Gross profit → Expenses → Profit before interest and tax → Profit before tax → Profit for the period → Dividends(if applicable) → Retained earnings

17
Q

Elements in a statement of financial position

A

Non-current assets → Current assets → Total assets → Current liabilities → Non-current liabilities → Total liabilities → Net assets → Total equity

18
Q

Causes of depreciation of non-current assets

A

-Wear and tear
-Equipment not up to latest standards(i.e. obsolescence)

19
Q

Ways to calculate depreciation

A

-Straight-line method of depreciation
-Units of production method of depreciation

20
Q

Formula for straight-line method of depreciation

21
Q

Formula for units of production method of depreciation

22
Q

Advantages of the straight-line method of depreciation

A

-Easy to calculate and apply
-Complete value of the asset is accounted for in the scrap value so the full value is accounted for

23
Q

Disadvantages of the straight-line method of depreciation

A

-Assumes that the asset is used evenly throughout its life
-Depreciation figures may not be accurate in certain cases where the useful life or scrap value cannot be predicted

24
Q

Advantages of the units of production method of depreciation

A

More realistic and accurate for many types of assets

25
Disadvantages of the units of production method of depreciation
More complex to calculate
26
Formula for contribution per unit
Contribution per unit = Price per unit - Variable cost per unit
27
Formula for margin of safety
Margin of safety = Current level of output - Break-even quantity
28
Formula for break-even quantity
fixed costs ÷ contribution per unit
29
Formula for(profit at a certain level of output)
(Output × contribution per unit) – fixed costs
30
The break-even point is where...
total revenue = total costs