BASIC TERMS

ASSETS smfhyouownand canuseorsell LIABILITY smithowingtosomeonenotyetpaid

a economic
present EIding Lowcostgoodusually apresent
credit
otfhe
obligation
purchases
rffwenrf.fyaagatmlnsodn.by inventory
AaRaiwabk
includedinExpenses totransferoneconomic AaPayable
entity
ofpastevents not Assets asaresultofpast
resource events

EQUITY Amountowingtoowners EXPENSES CostofOperation

amountinvested
electricity of
purchaseassetis
orig rent notanexpense
Profits LossesaffectsEquity
Economic
Resource
arightwpotentialtoproduce
REVENUE Moneyearnedbybiz benefit
economic

Gated tisane
iingon.se
fuegniedaikseasset

ACCOUNTING
FINANCIAL DonseepburangenBisharenoiders
MANAGEMENT
andevensoletraders
ForExternalUsers creditorsshareholders ForInternalUse
todateinto
AidsinDecisionMaking seasnaresinvest forManagement up
ProduceInfo
andforecasts
Bookkeeping 1acct LedgersPayableRecievable
keepsbizrecordsDoubleEntry

FinancialStatements
Produces
sheet SoFP APicatacertainPeriod
StatementofFinancialPositionBalance
statementofProfitorLoss Pic SopolAvidactivitiesover of
PeriodTime
statementofchangesinEquity SOCE
StatementofcashFlows CFS

ACCOUNTING EQUATION
shareholdersown
Net
Assets
Assets Liabilities
Equity
everything
notthecompany

So FP
Assets ShareCapital Liabilities
Profits CrewExpenses canbededucted10Assetside
Liabilities
or
added to equityside
TotalAssets TotalEquityandLiab

DUALITY QUADRANT
DUALINQUADRANI
LIABILITIES
SoFP ASSETS EQUITY

EXPENSES REVENUE
SOPL
DEBIT CREDIT

F ACCOUNTS
akaBanxaca
Balance is calculated after all transactions

Account Name Cash Equipment AlcsRecievable Inventory Prepayment

Debit Credit
Item Item Rent Purchases Sales
sdsieeg.sn
sharecapital AlcsPayable

A company is set up with initial investment of $210 Cash ShareCapital

210 210
Rent of $24 is paid, covering 6 months Reft cggh
Rgt Prypoagment
Company buys equipment on credit for $50 Equipment Aksgpoayable

Company makes credit purchase of $25 Purghgases Akszpgyable

Company makes cash purchase of $13 Purghgases coign

Company makes cash sales of $39 cggh Reggae

Akszpoayable
Company makes credit purchase of $20 Purghaoses

Company pays accounts payable $67 Aksffayable Caff

AlcsRegifable
Credit sales of $27 safes
 $5 is received from credit customers before month Cah
AlcsRetrievable

inventory Purchases
End inventory at the end of month is valued at $11
A A A A A
Cash Equipment AlcsRecievable Inventory Prepayment
21024 2420 275 n 20
39 is
67

E E R SC L
Rent Purchases Sales sharecapital AlcsPayable
2420 25 11 39 210 6750
13 27 25
so 20

ListofMonthEndBalances Statementof Pol statementofFinancial Position

Debit Credit sales 66 Equipment 50 snarecapital 210
Purchases at cash 150 profits is
cash to profit
Gross la Aksrecievable 22 225
Share
capital yo rent u Alcs 28
4 inventory Payable
Pfgroghpamsef
Et NetProfit is Prepayment
TotalAssets
20 TotalEquity's
liability 253
Alcspayable 28 253
rent a
Aksrecievable 22
Prepayment 20 SupplierBalance CustomerBalance
Sales 66 credit Debit
inventory
11
supplier customer
304 304 bid bld

DEBIT CREDIT

Cash Prepayment AlcsPayable

ASSETS Equipment
Inventory
AksRecievable ABILITIES
Rent sales
EXPENSES Purchases REVENUE
sharecapital
EQUITY

SPREADSHEET METHOD
Balance is calculated aftereverytransaction

Cash
Debit Credit Balance
100 too
 I
15 85
to 75
20 95

ACCOUNTS ListofFinancialTransactions
narrative aaawhat
togiveanaccountofsmthsof.pl describes
happens

DoubleEntrySystem
situation
responsibility to
beheldaccountableproducingqzqro.usagzowBizarenua Every Debithas
listotransactions
f Banks
corresponding Credit

A LANCE ResultsofEntriesintoAccount
Sofp Listof BalancesfromeachAccount
Summaryofwhathappin
Account

Bal of cashAcc
Bat of Prepayment
Bat of Equipment
ASSETS
CURRENT ASSETS Non CURRENT ASSETS
converted tocash in 12months AKAFixedAssets
Relates toTradingActivity NotpartofTradingActivity
inventory
AlcsRuievable SOFP usedlongerthan12months
prepayment
NoncurrentAssets Equipment
cash Equipment 50 Ii Yes
TotalNonCementAssets 50
currentAssets
cash 150
AlcsRecievable 22
inventory a
Prepayment 20
TotalcurrentAssets 205
TotalAssets 253

EXPENDITURE
CAPITALEXPENDITURE REVENUE EXPENDITURE
spendingon FixedAssets OtherExpenses
machines
equipment
rawmaterials

LOSING ACCOUNTS E
Rent
E
Purchases

tobeableto Formallyrecordbalanceof Account 24 20 25 11

13 CIF
a ch zo47
Down
Balanceiscalculatedand Brought 24 24 5858
 g
totalLargerside BID 4 BID47
Copytotaltootherside
EnterDiffascle carriedforward
Bringdow BID broughtdown

TRIAL BALANCE ListofextractedBalancesfromDoobleEntry NET valueaftersubtractingsmth

Debit credit

CAS.tt CREDlT SALES

SALES PURCHASES
CASH CREDIT CASH CREDIT
is
Debit customer'sAccount Debit Purchase Account
Debit CashAccount credit salesAccount Debit PurchaseAccount
creditsupplier's Account
credit salesAccount 2ndAfter
Payment
Account
Credit Cash 2ndAfter
Payment
Debit CashAccount Debit supplier'sAccount
credit customer'sAccount Account
credit cash

COST OF GOODS SOLD COGS

Credit
COGS Purchases Returnoutwards

Period 1 Period 2
Biz Buys10cansBeans Biz Buys 5morecans
Pi Ps overall
sells 1can sous 5cans OpeningIN 0 7 0
Sells 2morecans seas 3 morecans Purchases 10 5 15
Inventory 7cans O 2 15
closinginv 4cans
ClosingInv 7 4 4

I I tt
was 3 s

t
E IIE E E
El E t E
t
EE EE E E E EE E
E E E IIE EE
K

E Ea
RETURNS
SALES RETURNS PURCHASE RETURNS
 SALES RECORNS PURCHASE RETURNS
Goodssoldisreturned backtosupplier
Purchasedgoodssent
ReturnInwards ReturnOutwards

Sales SalesReturn Purchase PurchaseReturn

Debitcustomer Returninwardsshales
Debit Expenses
DebitPurchases DebitSupplier
CreditSales creditcustomer Revenue
Creditsupplier CreditReturnOutwards Purchased

salesExpenses

GrossProfit Netsales Returninward COGS Purchases Returnoutward

Alcs PAYABLE RECEIVABLE

Alcs Recievable Alcs Payable
Debtors creditors

Alcsofcustomerswhooweus Alcsowedtosoppier
creditsales creditpurchases

NOMINAL LEDGER
AKA GeneralLedger Ledger
WhereAlcs werekeptbefore
aaspayable
ausreceivable
DoubleEntry System
1customer
Onlyhas operates Alc TsupplierAlc
intotal

THER LEDGERS not partofMain DoubleEntry

Debtor SalesLedger Creditor PurchaseLedger

Alcsofeachcustomer Alcsofeachsupplier
Total Alcs
Receivable Total AlcsPayable
sales controlak
Ledger purchase control
Ledger Aic

CONTROL ACCOUNTS

Debtor SalesLedger Creditor PurchaseLedger

Alcsofeachcustomer Alcsofeachsupplier
Total AlcsReceivable Total AlcsPayable
sales controlak
Ledger purchase
Ledger Ak
control
 SALESLEDGER SALESACCOUNT PURCHASE LEDGER PURCHASES ACCOUNT
f
SALESLEDGER AlcsRECIEVABLE PURCHASE LEDGER AlcsPAYABLE

ACCRUALS
Reporting transaction when it occurs
inExamno fort.aejustproduceFinancial
statement
need

ACCRUED EXPENSES AdjustmentsnotTransactions

PRE PAYMENTS
Payment in Arrears Payment inAdvance
Payment attheEndofusage Paymentatthestartofusage
Invoicenot processedduringSFP
yet Invoiceprocessedbefore
yearend
IncreasesExpenses Decreases Expenses
ProducescreditasCLinSFP
Bizrents Dee Jan for k
ProducesDebitasCAinSFP
Decsilkthisyr
Jan 1k nextyr

Arrears Advance

AtYrEndnothingischargedyet Attrendthewhole 2khas

butslikrenthasbeenused beencharged
already
would
statement slobotsinancis
show since
statements www.nowsizkbaonysk

alreadyuseditwill as
reflect accrued
expanses isusedfrom
another goes to
prepayment subtract

an
expenses D c se seat D c
Rent 1000 prepayment 1000
AccruedExpenses
merent
nooo
parse
1000
see
mniiiabiiiysrentiscreditwenifitsanExpensebeeauseitaa.d
like
revenue reduced
from work
expenses
the
expenses
aanalpayment
c rent
to accrual aura wooair onyrainisaarousine expenses casset
payment paymentwoo
beensent
www.nasm
Bamareaaynoesnut rent prepayments
woowoo runooo woo prepayment
ooo
prepasiants
wooair
awoo inion
expenses sooo sooo
awoo inion
expenses

WASTAGE
Whenusing COGS itisalreadypartofcostofgoods
Accurateclosingluv automaticallyincludeswastages

Overall
OpeningInv
that'swhyCOGScounts
Purchases ClosingInventory and
notamountsold so
Inv
closing that COGSinclude
thegoodsthatweresold
COGS
andgoods wasted
 T ACCOUNT EXAMPLE Capital so
Startup cash $50,000 Cash Capital
TradePayable AksPayable
Trade Receivable AksReceivable
MedicalSupplies Inventory
b Acquire equipments $30,000 NonCurrentAsset Cash
Income Revenue

Pay 1 month of rent in advance $1900 Expenses Cash

Buy furniture on credit $6500 NonCurrent Asset sortolfike

inventory
I TradePayable baitisusednot
sold
soibnotpartoecoas

e Medical supplies on credit $1200 Medical Supplies TradePayable

Receptionist’s wages 1 week $300 Expenses Cash

g 4 patients pay cash, $500 each Cash Income

h Settle accounts for medical supplies $1200 TradePayable Cash

Electricity paid in cash $100 Expenses Cash

s Receptionist’s wages 1 week $300 Expenses Cash

K3 patients $500 each, invoice to employer TradeRecievable Income

Receptionist’s wages 1 week $300 Expenses Cash

in3 patients above paid by employer Cash TradeReceivable

4 patients invoiced- total $2000 TradeRecievable income

0 Cash withdrawn by Dr. Lee $1000 Capital Cash

p Receptionist’s wages 1 week $300 Expenses cash

9 Loss in value of equipment and furniture $250 Expenses NoncurrentAsset

r Usage of medical supplies $350 Expenses Medical Supplies

A A A A listofMonth End Balances

Cash NonCurrentAsset Medical
Supplies TradeReceivable
C
asoooo30,988 bzooooasog.ci200 Bor
D
kisoo isoom Cash
92000 soot a csooseason ssoar naooowooair 18100
misoo zoon
iooi Non CA 36250
 308 Non CA 362,0
toooo
sooe
scoop
Statementof Pol MedSupplies 850
is at Income 5500 TradeReceivable 2000
soo soo 36 soo woo noo noo sooo sooo
Expenses 3800
zBb Expenses 3800
Bb Bb Bb Not
profit 1700
E Equity R L Capital 5500
Expenses Capital Income TradePayable Income 49000
ciaoosoooai o ooosoooo arssoo 2000g nizoo csooo Tradepayable 6500
f3,88 araaooo isook arasoo izoo
aooo 61000
isoo
esoo zooon
pao
aso
rsso StatementofFinancial Position
sooo sooo soooo soooo sooo soooo too too non ca 36250
3800 6500 capital aaooo
aaooo soooo assets
current
Medsupplies sso profit 17002
TradeReceivable 2000 5070
cash 18102 TradePayabies
650
ago
TotalAssess stzoo and
Equity liability 572

LOSSOF VALUE OF Non CA USAGE OF MED SUPPLIES

Justa simplifiedbutinaccuraterepresentation treatedasAssetbecauseitisusednotsold

Willbelearnedlateron GradualincreaseinExpenses
GradualincreaseinExpenses Gradual decrease inNonCA
Gradual decrease inNonCA

DRAWINGS E
whenmoneyis takenoutofbusiness businessowner Drawings
by
UsuallyforSoletradersdaPartnershiponly
Reducing capital1Ownershipofbusiness
berepresented in Capital Ak
Can
UsuallyhasownAlethen fromcapitalatyrend
deducted

TRIAL BALANCE
summaryofallbalancesattheendof Accountingperiod
Listofallgeneralledgersaccountscontainedin ledgerofbusiness
it TotalofDebitBalances TotalofcreditBalances
creditEntriesin Ledger
TotalDebitEntriesinLedger_Total
THEM

ERROR DETECTION
DETECTED NOT DETECTED
 Leadto UnequalTotalsinTrial
Bar TrialBialstilltotalsequal

1 aspectofcredit
OnlyDebit Transaction
Omitting Both
not
AspectsofTransaction
inDebitacredit
butNo item included
NoDebit
creditbut
ErrorinBothDECentryofsameMagnitod
butcoincidentlyequallywrong
error
transposition
Transposition Error
Diet
amounts
forDebitacredit correct Amount in wrongLedgerAk
forwagesantendasDebitCorRent
Debit
BothEntriesSame Column
2 no
Debit credit
2creditNo
Debit

IncorrectCalculation ofLedgerBalance

DEPRECIATION Newly Bought Endof

Regularchargesoverusefullifeofanasset
Treated as Expense SoFP SOFP SopL

DEPRECIATION CHARGE Depreciation

somecostoffixedassettreatedasexpense
A Debit Expense w corresponding credit
Usesseparate Account tokeeprecordoforig cost valueofAsset
Provision
forDepreciation
startofYz End42
Depreciation MarketValuation
SOFP Soph SOFP Soph
Accumulated Depreciation Empty
CreditonnoncurrentAssetin SoHo it's
because Depreciation
thestartof
Reduces valueto NBV inSoFP NewYear

cost
NET BOOKVALUE NBD
Depreciation

ACCOUNTS OF DEPRECIATION
Remainingvalueof NonCurrentAsset
AKACarryingValve orwrittenDownvalueinSoFP NBV Depreciation Expense Ak
NosingleAccount provisionforDepreciation Ale
cost Ak forDepreciation
Depreciationandprovision
Accumulated Depreciation Alc canbeusedforEitherAk

Originalcost Depreciation

8000 car
2000 depreciation
D C
Depreciation soph 2000 Expenses
Accumulated Depreciation
soft 2000 EntrysincedNCAisDebitinSopp
Double
sore soap sopL
A a SoFP
Accumulated e
Fixed Asset Depreciation DepreciationExpense Non Asset
current
bidsooosoooar arsooo sooo 2000 2000
Motor
vehicle 8ooo
8000 8000 sooo sooo sooozooo
AccumulatedDepreciation 2ooo
 8000 8000 sooo sooo sooosooo Aw ul apna oo
blazooo NetBookValue 6000
bid8000 zooobki

FollowingYear
sore soit soph
Accumaulated E SoFP
Fixed Asset Depreciation DepreciationExpense NoncurrentAsset
bldsooosoooar ar aooozoooi.la sooo soooo
zooo MotorVehicle sooo
8000 8000 ooo ooo woozooo
AccumulatedDepreciation 4ooo
NetBookValue 4000
bid8000 tooobid blazooo

CALCULATING DEPRECIATION
STRAIGTLINE METHOD REDUCINGBALANCE METHOD
Constantvalve fordepreciation constantRATE ofDepreciation
Assetusedevenlyovertime AssetsDepreciatefasterin
Origcost µBv earlyyears

OriginalCost ResidualValue Fixed ofDepreciation x NBVatstartofyear

Depreciation

Life Expectancy Value

r Syros 20
of Depreciation logos 10
Percentage
At 20 Depreciation
Annual Accumulated Annual Accumulated
Cost Charge NBV Cost Charge Depreciation
NBV
Depreciation

Startof1 1200 Startof1 1000

EndofY 1200 200 200 1000 EndofY 1000 200 200 800
EndofYa 1200 200 400 800 EndofYa 1000 160 360 640
EndofY 1200 200 600 600 EndofY 1000 128 488 512
EndofYa 1200 200 800 400 EndofYa 1000 102 590 410
EndofYs 1200 200 1000 200 EndofYs 1000 82 672 328
EndofYa 1200 0 1000 200 EndofYa 1000 66 738 262
untilvalueissupersmall
1200 200 thrownaway
g
200

RESIDUALVALUE PARTYEARS
of
Expectedvalueatend expeded life
useful whenAssetsboughtIsoldfor thanyear
less
Ifstillusenocostnofurtherdepreciation Depreciationcalculatedontimebasis

Ifsoldremovedfrom1 accounts hyear 12depreciation ratelvalue

1month Yndepreciation

DISPOSALS A car cost 16000 Vehicleatcost

Motor Bank
GettingridofAssets AccumulatedDepreciation 14000 bidnoooo 2700
2000
thrownAggy orSold gNBV
 removedboat 1 Accounts sopkff.fr 2788 aaumuaiiBepia
nooo bid14000
ispgsa
A
SALES PROCEED bidvalvesarvaluesofcostlDepreciation
when shownin DisposalofAsset
are
values Ak
af too 2700
1670016700
MoneyfromDisposingNCA
Doubleentrysoitmustbeshowinother Ak
ProfitsoldformorethanNBV tozerooutAksinceAssetis Disposed procitisincredit
bµzoopro
Loss soldforless
thanNBV becauseRevis credit
Rev Expenses profit
startof 1 Endof 1 Endof42
Asset AssetSold Asset AssetSold Asset AssetSold

pc

f fits
NBV
Sold

NCACALCULATION DEPRECIATION CALCULATION

cost Depin NBV
Costbid 1000 Depreciation bid 350 Balbid 1000 350 650
new
a ssets
100
Additions 100 100
Bought Additions fortneyear
Expenses charge 210
sad
assetsDisposals
so sow
assets'Eefinases
Disposals 60 Charge 210 210
CostClf
amountowned 1020 Depreciation at 500 Disposals 80 Coo 207
BalUf 1020 soo 520

Year 1 Cost Depreciation NBV Year2 Cost Depreciation NBV

Bal
Opening Bal
Opening ClosingBalance ofYear1
Additions Additions
LessDisposals LessDisposals
Depreciation Depreciation

ClosingBal ClosingBal

DEBT bewritten
provisionEstimateamountto
Adjust ayearEnd
foraperioddtime

BADDEBT DOUBTFUL DEBT GENERAL PROVISION

Certain customerwon't willpayback
Somehopecustomer FundsforanticipatedLoss
paydebt ContainsbothBad'sDoubtfulDebt
RemovedfromAlcsReceivables NotremovedfromReceivables Lisa
Debtor
Nomina List
Debtor Expenseforprudence smith won CarriedForward tofollowing
Years
a
Ledgeralareceivable eExpense smiths isrobert
Baddest
Robertsso Nominal a.ae
isioaioEEsones ns AdjustExistingProvisions
i totalslab
asnoo too sones its a
LedgerAksreceivable e aprovision
Baaoebtexpenfooon.no
Tota 32 Endofy expense PPD
as too 100 receivables
2soo as
3 provisions as
sales sales BadDebt
Ledger smith
Roberts Jones Ledger smith
Roberts Jones SofPcurrentassets Endofy expense PDD
noonoo noo as too iso as Bio
provision
as is bid
alesreceivable ass receivables
3ooo as as
provisions saprovisions so oona
met receivables
cs
Baddest

P DD P A 1 9
 PROVISION FORDD
EstimatedValue Just
incase
ProvisionAmount
calcaftersubtracting
1
Accounting forPDD Reduces
bidvalueofAleReceivable BadDebtsWritten Debts
LikeaLiability CR ValueCalis valveinfinstatements
CalculateProvisionNeeded tucowants
value

CheckforExistingProvisioninTrial
BalfreditaksoFP
soft IncreaseProvisionExpensessoph
createanAccountor Alereceivable PDDtnisyrbiggermanPDDoepmiousyr

LessProvision
AdjustProvlogetvalueneeded Netakraeinble BackProvisionCcountedasincomesoPL
Write
DRor son
PDDissmanersothenisexcessPDD

SOPLDoubtfulDebtEXPENSE x Expensak BadDebtainttenorts

ProvisionDDlexpense
SOFPProvisionforDoubtful
Debt X Liabak
Balance AlcReceivable 2890 28906.037 86.7287
AdjustingUpward PDD
Increase provision for Debt
Doubtful 20 SoFP
BalPDD 36 503614incPDD
siYobnk28g9fProvDD Generalprovision 3 iesaskpR.eu

50
DR42 A E E weak 2803
AkReceivable PDD DD BD
SoPLDoubtfulDebtEXPENSE 14 ExpenseAk bid2890 20yd on oo soph
i BD o expense
SoFPProvisionforDoubtfulDebt 14Liabak proudest ain DD Ga
samarov
Sophshowsextra 14Expense
SophnewBalofPDDAK is 50 Balance AlcReceivable 3700 31106.027 62
Provision for Debt
Doubtful 110
AdjustingDownward PDDwrittenback GeneralProvision 2 soFP
back
BalPDD 2205 2025 5 5written owed Eadwnithnott 590 AlcReceivable 340
62
by lessprovision
DD
Prov
DR012 A E E metaler 3048
Ak Receivable PDD DD BD
5 ExpenseAk as a saosaoenaasoPL
SoPLDoubtfulDebtEXPENSE bid3700 Sao
snow I as mould miff BD 590 expense
Soft for Debt
Provision Doubtful 5 Ak
Lia's oPw DD 48notan
amarov
backbecomesSundryincome inSoPL
Written

Balgetsreduced
Credit
by5becoming20insoFP Balance AlcReceivable 3840 3425603572120
Provision for Debt
Doubtful
50 sore
GeneralProvision 3.5 AlcReceivable 3425
lessprovision 120
BacoWrittenoff

A
owed
by 415E E
TRADING
t 3305
C
Akkeetteivable
PDD DD BD gopi
bid3840 arsun qarseuaic BD 415
ttmoa
wagers
34 sobldaow.iq
provaero toin iiiis DD 70 expense
Firstpart of Sopot
RemainingPartiscelledSopot roaderov

Revenue
Trading Balance AlcReceivable 2525 0157
252510 38
COGS
Alc Provision forDoubtfulDebt 30 sopp
Profit
Gross GeneralProvision 1.590 iesaskpRE.gl obe 2535g
Other
Expenses pm BaldBadDebt 115
E E 2487
NetProfit At A
AleReceivable PDD DD BD soph
nemer
bid2525 soba 8 bunsmsn.ie BD 115
biasses proven.gg sinensis i DD 8 notanexpense

CARRIAGE ss.ae

CARRIAGEINWARDS Smith Ben CARRIAGE OUTWARDS

ioxsioowaeiimyioxsao.sroau.my
goodssold
costofgoodbought goods
Delivery woo a Deliverycostof
Delivered to us Delivered to customer
Dewey 0 no
Trading Ak ph Alc
cos 1000 too
 was 1000 1020
Partof COGS
showcheaperoption
addedto
oraseitwouldbe
other
expenses

SUSPENCE ACCOUNT
TemporaryAlc
Mustbesortedoutbeforefinancialstatementsaremade
canbefoundinTrialBalances
NotesexplainwhatAlocontains

DISCOUNTS
Persuade customers topayquicker

CASHDISCOUNTS TRADEDISCOUNT
AppearsinPILAlcas otherexpenses Nottreatedas discount
Doesn'tappear in trading Ak
Diffprice fortrade4nontradecustomers
DiscountAllowed Expense DiscountReceived income specialpriceforbulk
buyersprivileged etc
discount
gets
customer wegetaiscountaomsupplier 25 tradeDiscount
cashflow
improves customer piscount Trade
good price
risk
reduces baddest
Boughten 100
price
sowaooasi.co
Discounts Discounts s A too 25 as
R
sales
discount
allowed
E
pomases
Rreceived
Discount B so 20 Go
too s too s goes
to lao
en a zs ios
a n l a
Aksraeivable
cash a payable cash
woes
s as wass as
or or
cash as
s a bltbalances
r a
Discounts
ausrevivable too SoFPAlc I in nextyear's
Pll Account Assets A D
g Ledger
Liab L u
Sales Haz Equity s
cogs
profit
Gross
801
c.az
Pll Ak
BE
A
I profitsbecome
received
Discount
16 revenue N E 7sopp
treatedas

708 Expenses c N Equity

wages as E
s y
s
allowed
discount
2g
Netprofit 198

SUNDRY REV ADJUSTMENTS

MiscellaneousIncome TrialBalanceisextractedbeforeitemsare processed
OtherOperatingIncome Transactionsnot includedin Accountingrecord
Accruals
yet
Discount Received
SoldFixAssets Prepayment
DepreciationIas sale
Changeinshaccap

Trial Balance forSoleTreder

DR CR Trading Alc c a
 capital
a
sales
g l 870
e A
gso Purchases inventory
cash 256 Returninward bidsaasaacogs bidzooaooags
opening
soo
inventory zoo 840 ageingcogs
doesnt
appearinaosigba

purchases 844 Bdane

Opening soo e aaatomsin
cogs
sopeorsonresornokurwards
Purchases 844 saa ro cogsas
outward
Return as 200 bidas
sales
Returnoutward as sooaosingba

870
inward
Return ego Goodsfor
selling
ne aaaaa
notintrialbalance
waa 044
bidaoa
Debtors zoo
ClosingBalance Good usuallyjust
given
COGS
creditors iss
Grossprofit
661
171
Equipment aoo
GeneralExpenses so GenExpenses
Drawings too Netprofit in
2080 zoso

SoFP solpof JohnSmithat31stDoc2020

NoncurrentAssets capital aso
Equipment 400 Addprofits 121
Current Assets 1071
Inventory 300 Alcs
Payable Iss
AlcReceivable 200 Drawings Coo
Cash 256 1156
1156

LIMITED LIABILITY
1
Liabilityislimitedto nominal facevalueofshare
shareholderscan'tbechased to
paydebts

PUBLICLIMITED COMPANIES PLC PRIVATE COMPANIESCEOLtd

Listed at Stock Market Hasstock9shareholders
Easier to buybell shares NotonstockExchange

EQUITY
AKAsharecapital for companies
interest
Dealswownership

PILaddedtoEquityatyearend
2typesof DiffSharePrices
RESERVES Nominal ParValve Book thatgoesto
ValueValue
SHARES capital
shave
cap
Moneyorig inbiz
invested
Retained Profit
ValueIssuing
SharesatPremium Nominal Premium
GeneralReserve
ShareCapital Equity Share Premium
PreferenceShares RevaluationReserve MarketvalvefromstockExnotdirectfromco
aliasnot
considered Nominal Premium
Capital Redemption Reserve
Equity

ORDINARY SHARES EQUITY

 1
OrdinaryShareholders Equityshareholdersownthecompany
Right to allitsprofit
Obligationtopayloss
lossisrestrictedtonominalvalveofshares
Dividends distributedis dictated
byBoardofDirectors
Hasvotingrights

SHARE CAPITAL PREFERENCE SHARE

HasNominalValue Aka preferredstock
1 pershare shares w indicatedDividendrate
value
Nominal Parvalue NovotingRights

Ye Yao Yeo
ooo siooo 000
toooshares 10 10 1000shares to
6 new
investorscome
RetainedProfit
agreetoexpandco
New
1000 shares to
Equity 10 16 sooldandnewhave sharePremium 6
ofenlargedbiz retainedProfit 6
Netassets to 16 TotalEquity 32
NetAssets 32

RESERVES
Amount shareholdersown reserves
Dividends Bai
notincludenominalvalue
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