Incomplete Records

Question 1

Comparison of Capital (Net asset method) Advantages

Answer 1

Quick and easy

Provides quick answer for the Profit/Loss for year.

Question 2

Comparison of Capital (Net asset method) Disadvantages

Answer 2

Provides no evidence for the profit/loss figure.

Question 3

Statement of Affairs

Answer 3

List of assets and liabilities.

Assets
Liabilities
= Capital

Question 4

Mark Ups

Answer 4

Expresses profit as a percentage of Cost Of Sales.

Mark up % = (Profit/Cost) X 100

Question 5

Margin

Answer 5

Expresses profit as a percentage of Revenue.

Margin % = (Profit/Selling Price) X 100

Question 6

Stolen / Damaged Inventory

Answer 6

Stolen inventory = Opening Inv + Purchases - Cost of Sales - Residual Inventory.

Stolen Inventory goes in the Income Statement as an Overhead.