Final Accounts

12 terms by mrscw

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P&L Trading Accounts

Section of the P&L that includes: Sales - COGS = Gross Profit

P&L Profit & Loss Accounts

Section of the P&L that includes:
Sales - COGS = Gross Profit - Expenses = Net Profit before interest & tax

Cost of Goods Sold

Also known as cost of sales:
Opening Stock (inventory)
PLUS Purchases
LESS Closing Stock

B/S - Current Assets

Assets that will turn into cash within one year. Typically includes:
Cash
Stocks (inventory)
Debtors

B/S - Current Liabilities

Liabilities that will turn into cash within one year. Typically includes:
Creditors
Overdrafts

B/S - formula for Net Current Assets

Current Assets MINUS current liabilities

Profit

Revenues MINUS expenses (if negative number known as "net loss")

Two sections of a balance sheet (B/S) that MUST balance

Net Assets = Capital Employed

B/S Capital Employed

Loan capital (long-term liabilities)
Share capital (or owner's equity if sole trader)
Retained Profit

Profit & Loss (P&L)

A financial statement (aka final account) that summarizes the revenues, costs of sales and expenses incurred during a specific period of time

Balance Sheet (B/S)

A statement of the total assets and liabilities of an organisation at a particular date. Indicates how the Net Assets have been financed.

B/S - formula for Net Assets

Fixed assets PLUS net current assets

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