Incomplete records answering question Ans Statment For Chnages In Equity (layouts)

Question 1

What is the purpose for the statement of changes in equity?

Answer 1

Describes how the equity section of the SFP has changed from the beginning of the financial year to the end

Question 2

What is the title for the layout for the statement of changes in equity?

Answer 2

Statement of change in equity for year ended (date in full)

Question 3

What main titles must be included in the statement of changes in equity?

Answer 3

issued share capital
Share premium
Revaluation reserve
Retained earnings
(Total sometimes needed)

Question 4

What is the layout of the statement of changes in equity?

Answer 4

Equity at the start of the year (taken from SFP)
Issue of shares (different types of share issue will change statement in different ways)
Revaluation (negative = minus)
Profit for the year- added to retained earnings
Dividends paid- taken out of retained earnings
Closing balance- equity section after adjustments

Question 5

What are the 4 stages to creating accounts from incomplete records?

Answer 5

Opening statement of affairs
Cash and or bank account
Adjustment/ control accounts
Prepare final accounts

Question 6

What is the statement of affairs?

Answer 6

List of all a firms assets and all liabilities at one point

Question 7

What is the net assets method?

Answer 7

Calculating profit using the formula capital= assets - liabilities

Question 8

How can profit be determined by using statement of affairs?

Answer 8

I=can be determined if the amounts of opening and closing capital are known and the difference between them represents profit of loss

Question 9

What must the difference between a firms assets and liabilities show?

Answer 9

The firms capital

Question 10

What must be considered when calculating profit using capital?

Answer 10

Possible changes to might have occurred to capital that aren’t related to profit

Question 11

What adjustments would need to be made before using capital to calculate profit?

Answer 11

Subtract any injections of capital
Add any withdrawals of capital
Add back any drawings

Question 12

What can lead to a statement of affairs being inaccurate?

Answer 12

Lapses in memory and mistakes

Question 13

What will a cash book summary generally show?

Answer 13

Opening and closing bank and cash balances
Amount of all receipts and payments
All amounts received and paid during the year

Question 14

How would you calculate sales from a control account?

Answer 14

Debit- balance b/d sales(missing figure), balance b/d
Credit- receipts from receivables, balance carried down
Difference between debit and credit would be the sales figure

Question 15

What is the formula for getting sales from incomplete records?

Answer 15

Receivables at end of year + receipts from receivables - receivables at the beginning of the year

Question 16

What must your remember to add to credit ales before putting it on IS?

Answer 16

Cash sales

Question 17

What is the formula for getting credit purchases from control accounts?

Answer 17

Payables at the end of year (debit) + total paid payables (debit) - payables at beginning of year (credit)

Question 18

What do you do with accruals and prepayments of expenses at the start of the year? (Incomplete records)

Answer 18

Less: accrual at the start of year
+ prepayment at start of year

Question 19

What do you do to prepayments and accrual of expense at the end of the year?

Answer 19

+accrual at end of year
- prepayment at end of year