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12 terms

Final Accounts

STUDY
PLAY
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