1001 Everything Flashcards
(53 cards)
What order do entries in the sales journal go?
Debits are written first, credits written beneath.
What information do you have to put together before completing the income statement?
Total the sales (receipts from sales plus trade receivables)
Total the purchases (payments to suppliers plus trade payables)
Take away any prepayments
Add any accruals
Work out depreciation
Work out increase in allowance for doubtful debts and the difference between the two years.
What is the format of an income statement (basic)?
Sales
Less returns inwards
Less cost of sales
Opening inventory
Add Purchases
Add carriage inwards
Less returns outwards
Less closing inventory
Then that figure is taken from sales
Gross profit
Add discounts received
Less expenses
This gives net profit
What is the format for a balance sheet?
Non current assets
Current assets
Total assets
Less liabilities
Non Current liabilities
Current liabilities
Net assets
Financed by
Opening capital
Add net profit
Less drawings
Closing capital
What is the title for an income statement ?
[Business name] income statement for the year ending….
What is the title for a balance sheet ?
[Business name] balance sheet as at ….
What is the title for a statement of changed in equity?
[Busines name] statement of changes in equity for the year ended….
What is the table format for a statement of changes in equity?
Rows
Share capital
Share premium
General reserve
Retained earnings
Total equity
Columns
Opening balance
Bonus issue of shares
Profits for the year
Dividends paid
Transfer to general reserve
Closing balance
List the expenses in an income statement.
Any expenses
Bad debts
Depreciation
Adjustment in provision for doubtful receivables [ONLY THE INCREASE]
Carriage outwards
Discounts allowed
List assets found on a balance sheet.
Non current
Assets (machinery, vehicles, etc)
Less depreciation
Current assets
Inventory
Accounts receivable
Provision for doubtful receivables [WHOLE NEW AMOUNT]
Prepayments
Cash in hand
Bank
List liabilities found on a balance sheet.
Current
Accruals
Accounts payable
Bank overdraft
What is an error of omission ?
No debit, no credit
What is an error of commission ?
Wrong persons account
What’s an error of principle ?
Wrong class of account
What’s compensating errors ?
Separate errors cancel each other out.
What’s an error of original entry ?
The figure inputed was wrong
What’s complete reversal of entries
Correct accounts but entries on wrong sides of accounts
What’s transposition errors
Figured posted in wrong sequence
What is a suspense account?
If the error cannot be found, only then is it necessary to insert a suspense account to balance the trial balance.
Where does the suspense account show in the balance sheet ?
Where the balance is a credit balance, it is shown as a current liability in the balance sheet.
When the balance is a debit balance, it is recorded as a current asset.
What type of errors require a suspense account?
Addition errors
Posting errors
Trial balance errors
Compensating errors
How to work out the net profit figure from incomplete entries ?
Net profit = this years capital - last year’s capital
How to work out this year’s capital from incomplete entries
Last year’s capital + profits - drawings = this year’s capital
What four primary statements does the IAS 1 state?
Statement of financial position
Statement of comprehensive income
Statement of changes in equity
Statement of cash flows
