Preparing SOFP/P&L

Question 1

what are the categories for expense

Answer 1

costs of sale, distribution cost, admin expense

Question 2

what is included under distribution costs?

Answer 2

costs/wages under marketing & distribution

depreciation of motor vehicles

delivery OUTwards

Question 3

what is included under admin expense?

Answer 3

its a default category. includes:
depreciation of other non-current assets

irrecoverable debts expense

Question 4

how should revenue be recorded?

Answer 4

NET of any discounts/refunds/VAT; and is recognised when performance obligation is met

Question 5

what is included under other operating income

Answer 5

investment dividends, interest received, rent reviewed, insurance claim proceeds, profits on disposal

Question 6

what working must be done to retained earnings?

Answer 6

add profit

Question 7

what does the UK GAAP consist of

Answer 7

1. the Companies Act 2006
2. UK accounting standards
3. stock exchange listing requirements
4. international’s accounting and financial reporting standards

Question 8

what are statuary accounts?

Answer 8

Financial statements that limited companies are legally obliged to publish in a certain form

Question 9

can the true and fair view rule be overridden?

Answer 9

Yes, if necessary