lec 5 - preparing financial statement Flashcards
total asset
nca + ca
total liablities =
ncl + cl
net asset =
total asset - total liablities
aka = capital/equity
cant just take numbers from trial balance to is and bs what do we gots to do 1st
adjustment
what are hte 4 djustments we make
cost of sales
depreciation of NCA
Bad written off and provision for bad debt
accruals and prepayments
matching principle
measurement of profits- costs - revenue
should be aligned to the year they were incurred
what ar e the 5 groups of expenses
cost of sales
admin expenses -
selling and distribution costs - e.g. marketing costs
finance costs - borrowing and lending costs
tax expensee
what is cost of sales
value of goods removed from inventory as been sold
related to production costs
cost of sales value is converted from what to a what
asset to expense
cost of sales equation long 5 things
opening stock + purchases - returns + carriage in(delivery)
*gives us cost of goods available *
- closing stock
cost of slaes equation short 3 things
opening stock + purchases - closing stock
(values)
gross profit
revenue - cost of sales
where you can when calc prof/gross profit revenue should be
after decucting returns
when looking at the income statement always scan for …. and if its there…
any returns
deduct from sales and purchases
