THE PREPARATION AND ANALYSIS OF FINANCIAL STATEMENTS OF THE SOLE TRADER Flashcards
1
Q
explain the purpose of preparing
financial statements
A
The purpose of preparing Financial Statements
to satisfy the needs of the users.
2
Q
identify the components of the
Financial Statements;
A
Trading and Profit and Loss Account and
Balance Sheet.
3
Q
net profit
A
Profit after all expenses have been deducted
4
Q
What is the job of the balance sheet
A
to reveal the financial status of an organization, meaning what it owns and owes
5
Q
What are the different types of ratios
A
6
Q
Gross loss
A
When purchase price exceed the sales revenue
7
Q
Gross profit
A
Gross profit is profit before any form of expenses are deducted
8
Q
Net loss
A
Where expenses is more than gross profit
