LA 3 Flashcards
Gross profit =
Gross profit = Sales - Cost of sales
Sales =
Sales = Cost + Gross profit
Mark up on cost
Cost = 100
Profit = (mark up given)
Sales = (markup + 100)
Mark up on sales/gross profit margin
Sales = 100
Profit = (mark up given)
Cost = (100 - markup)
Formula for mark ups:
Amount given x What I am looking for/What I have
Cash receipts
dr Bank (A+)
cr Whatever (A- E+)
Cash payments
dr Whatever (E- A+)
cr Bank (A-)
Credit sales
dr Debtors control (A+)
cr Sales (E+)
dr Cost of sales (E-)
cr Inventory (A-)
Sales returns
dr Debtors allowances (E-)
cr Debtors control (A-)
dr Inventory (A+)
cr Cost of sales (E+)
Credit purchases
dr Whatever (A+)
cr Creditors control (L+)
Credit purchases returns
dr Creditors control (L-)
cr Equipment (A-)
Bad debtors/ insolvent/writing off balances
Dr Bank (A+)
Cr Debtors control (A-)
Dr Credit losses (E-)
Cr Debtors control (A-)
Credit losses recovered from bad debtor
Dr Bank (A+)
Cr Credit losses recovered (E+)
Owner contributions
Dr Bank (A+)
Cr Capital (E+)
Drawings of money
Dr Drawings (E-)
Cr Bank/Petty cash (A-)
Drawings of inventory
Dr Drawings (E-)
Cr Inventory (A-)
