Info to remember Flashcards
VAT control account, debit and credit
Debit - purchases / money out
Credit - sales / money in
20% mark up …
sales - 120%
Cost of sales - 100%
Gross profit - 20%
20% margin …
Sales - 100%
Cost of sales - 80%
Gross profit - 20%
Current account, debit and credit
Debit side - drawings and interest on drawings
Credit side - Salaries, sales commission, interest on capital, profit share …
Purchase ledger control account, debit and credit
Debit side, Purchase return day book, bank, discount received, balance c/d
Credit side, Balance b/d, Purchase day book
Formula for capital
Assets - liabilities
Profit and loss, other income examples
Allowance for doubtful debt adjustment (credit side on trial balance)
Profit and loss, expenses examples
Depreciation charges
New partner joins partnership, debit side and credit side of capital account
Debit side - Goodwill (new partnership agreement, Balance c/d)
Credit Side - Balance b/d (what is already in capital account), bank (new partners capital), Goodwill (Eliminating old partners goodwill)
Existing partner C leaves partnership - goodwill account
Debit side - Capital account Partner A, Capital account Partner B, capital account partner C
Credit Side - Capital account with new partnership agreement (Partner A) and Capital account with new partnership agreement (Partner B)
Appropriation account
Profit for appropriation - Salaries - Sales Commission - Interest on capital + interest on drawings.
Then do the profit share
What is Allowance for doubtful debt adjustment on the Profit and loss?
Other income
What is disposal of non-current assets on the profit and loss? Debit and credit
Credit in PL - other income
Debit in PL - expense
What does a credit balance on bank statement mean
Debit in the bank T account
Statement of financial position: Financed by section:
Sole trader:
Add: Profit / loss for the year
Less: Drawings
Partnership:
Capital Account
Current Account
