Topic 16

Question 1

Why is a statement of financial affairs created?

Answer 1

This is done to calculate the closing capital

Question 2

What is a statement of financial affairs?

Answer 2

This is assets - liabilities and is what would have been shown on a S.F.P if prepared from complete records

Question 3

How do you calculate profit?

Answer 3

Profit = Closing capital + Drawings - Opening capital - Additional Capital

Question 4

What do we use a cash book summary for when finding missing figures?

Answer 4

To find Cash/Bank balances

Question 5

What do we use a Control A/C for when finding missing figures?

Answer 5

Total Sales and purchases to turn receipts/payments to Income/expenditures

Question 6

What do we use a ledger A/C fro when finding missing figures

Answer 6

We use it for accrued/prepaid expenses/income and depreciation

Question 7

How to calculate Credit Sale?

Answer 7

Credit Sales = Receipts from Credit customers - Receivables at start + Receivables at Y/E