Formuals Flashcards
(23 cards)
Formula for gross profit %
Gross profit divided by sales revenue x 100
Gross profit mark up
Gross profit divided by cos x 100
Expense/sales revenue percentage
Specified expenses divided by sales revenue x 100
Return on capital employed %
Profit for the year divided by capital employed x 100
Capital employed
Capital + non current liabilities
Partner profits appropriation
Interest on drawings - interest on capital - salary
Margin percentages
Cos = % - 100
Gp = %
Sales = 100
Markup percentages
Cos = 100
Gp = %
Sales = 100 +%
Cos calculation
Cos = opening inventory + purchases - closing inventory
Double entry to accrue expense
Debit - expence account
Credit - accrued expense
error of princable
wrong account
error of commisION
wrong value or as account within a ledger
error of original entry
wrong ammount
error of ommision
transaction not entered
reversial on entries
posted to wong side of account
What is the business entity princable
The fact that financial statements record and report if activites of one particular business. They do not include assets and liabilities of owner/owners of the business.
The principle of materiality
Some items and accounts are such low value. It’s not worth recording them separately depends on the size of a business.
The principle of going concern
Presumes that the business to which the financial statement relates will continue to trade in the foreseeable future
The principal of accurals
This principle require the income and expenses are matched so they relate to the same goods or services and the same accounting period
The principle of consistency
When a business adopts a particular accounting policy should continue such policies consistency
The principle of prudence
This principal requires that caution is exercise for making judgements and consistence of uncertainty
The principle of money measurement
Refers to fact that the account system uses money as a common denominator for recording or reporting all business transactions
What is pearls
Purchases,expenses, assest (debit)
Revenue, liabilities,sales (credit)
