Wk2 Transfer from TB to SOFP and IS Flashcards
1
Q
On a Trial Balance, what would go on the DEBIT ‘benefits in’ side?
A
- Assets
- Purchases
- Expenses
2
Q
On a Trial Balance, what would go on the CREDIT ‘benefits out’ side?
A
- Revenue (income)
- Liabilities
- Capital
3
Q
How would we compute profit from the SOFP if there are no ‘transactions with owners’?
A
If there are no ‘transactions with owners’ then profit or loss = change in capital.
Closing Capital - Opening Capital = Profit/ loss
4
Q
How would we compute profit from the SOFP if there are ‘transactions with owners’?
A
If there are ‘transactions with owners’ then we must allow for these in our calculation.
Capital At End = Capital At Start + New Capital Introduced - Capital Withdrawn + Profit or Loss
