POA

Question 1

What is liability

Answer 1

The amounts owed by the business

Question 2

What is capital

Answer 2

The owner’s investment in the business or money used to start the business

Question 3

What is Assets

Answer 3

Resources owned by the business or organization

Question 4

What is Limited liability

Answer 4

You can only lose if the business goes bankrupt

Question 5

What is Unlimited liability

Answer 5

If the business goes bankrupt you can use your assets to pay the dept

Question 6

Formula for assets, capital and liability

Answer 6

A= C➕L
L= A➖C
C= A➖L

Question 7

What are two types of budget

Answer 7

Sales budget- this is an itemization of a company’s sales expectation for the budget

Production budget- the total amount of money that a company or individual plans to spend on creating a specific project

Question 8

Income statement format

Answer 8

Trading and profit & loss A/C for the year ended (2018)
Sales $last
Less return inwards. ($last)
Net sales $last
Less: cost of goods sold Nth
Opening inventory $middle
Add: purchases. $first
Less: return outwards ($first),side
Carriage inwards. $middle
Cost of goods available for sale. $middle
Less closing stock. ($middle)
Cost of goods sold ($last)
Gross profit. $last
Less expenses. Nth
Rent Middle
Wage Middle
Advertising Middle
Etc
($last)
Net profit. $last
Double line

Question 9

Balance sheet format

Answer 9

Balance sheet as at (2018)
Fixed Assets- underline
Building. $last
Computer equipment $last
Motor van. $last-underline

Current assets- underline
Inventory(closing). $middle
Debtor. $ middle
Bank $middle
Cash. $middle-un

Current liability- underline
Creditor. $first
Bank overdraft. $first ($middle) un
Working capital. $last- un
Double line

Long term liability- underline
Loan for Blake ($last)- un

Financed by- underline
Capital. $middle
➕Net profit. $middle- un
Total middle
➖Drawings. ($middle)- un
$total
Double line

Question 10

Balance sheet note

Answer 10

Foot note➕trial balance= depreciation for balance sheet

Question 11

Straight line method

Answer 11

% of cost
= % divided by 100✖️cost

Question 12

Reducing bal method

Answer 12

% of the NBV
= cost ➖ Acc depreciation

Question 13

Balance sheet new format

Answer 13

$cost. $Acc.Dep. $NBV

Fixed assets-
Machinery. $….. $……. $…..
M/vehicle. $……. $……. $….
Un $double line. Un