Erstellt von claire.harrison
vor mehr als 9 Jahre
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Frage | Antworten |
Relevance | Financial Information is said to be relevant if : - It has the ability to influence the economic decisions of the users - It is provided in time to influence those decisions |
Reliability | Valuations (such as depreciation or inventory) must be; - Free from bias - Free from material errors - With a degree of caution (prudence) |
Comparability | Information is much more useful if it is comparable over time and also with similar information about other businesses. |
Ease of Understanding | Users should be able to understand with a reasonable knowledge of accounting and have a willingness to study the information diligently. |
Materiality | Materiality defines the threshold or cut-off point after which financial information becomes relevant to the decision making needs of the users. |
Statement of Profit or Loss (SPL) | Summary of Activity in the year Income Expenses |
Statement of Financial Position (SPF) | Snapshot of the business on final day of accounting period Assets Liabilities Capital |
SPL - Example | |
SFP - Example | |
SFP Non-Current Assets | Premises Shop Fittings Vehicles |
SFP Current Assets | Closing Inventory Trade Receivables (minus Allowance DD) Pre-Payment of Expenses Bank |
SFP Current Liabilities | Trade Payables Accrual of Expenses VAT Owed |
SFP Non-Current Liabilities | Loan from Bank Mortgage |
SFP Financed By | Capital + Profit - Drawings (Should match Net Assets) |
SFP Net Assets | Non-Current Assets + Net Current Assets - Non-Currnet Liabilities = NET ASSETS |
SPL Gross Profit | Sales Revenue - Sales Returns =SALES +Opening Inventory +Purchases -Purchases Returns -Closing Inventory =COST OF SALES SALES - COST OF SALES = GROSS PROFIT |
SPL Additional Income | Discount Received Rent Received Profit on Disposal Allowance for DD Adjustment (CR) |
SPL Expenses | General Expenses Interest Paid Wages Discount Allowed Irrecoverable Debts Depreciation Allowance DD Adjustment (DR) Loss on Disposal |
SPL Overview | Gross Profit + Additional Income – Expenses = Net Profit / Loss |
Accruals | SFP Current Liability |
Allowance For Doubt Debts | SFP (Removed from SLCA - Trade Receivables) |
Accumulated Depreciation | SFP Removed from Assets in the Accumulated Depreciation Column |
Pre-Payments | SFP Current Asset |
Allowance for Doubtful Debts Adjustments | SPL Expenses |
Opening Inventory | SPL |
SLCA Sales Ledger Control Account | SFP Trade Receivables - Remove Allowance for Doubtful Debts before posting to the SFP |
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