Week 4 - Revenue, Purchases and Cost of Sales

Question 1

What is the overview of financial accounting?

Answer 1

1) Day-to-day
- recording transactions
2) Year end
- produce trial balance
- undertake year end adjustments to produce:
3) Financial Statements
- prepare from accounting records
- comply with accounting standards

Question 2

When do we think about recording our transactions on a day-to-day basis?

Answer 2

If we raise an invoice, if we receive an invoice, or if there is a cash flow

Question 3

What is the cost of sales calculation?

Answer 3

Cost of sales = Opening Inventory + Purchases - Closing Inventory