3.4 Final Account

Profit Loss Account

show the trading period of loss during a specific trading position of a business during a specified trading period.

• cost

• profit

• loss

• revenue

of the past year and past quarter shows history

Window dress - the legal manipulation of the final account to make them look more attractive to final investors.

• creative account

there is no international standardized format

Profit loss account

• have specific title

  • title is - Profit and loss account for {name} for year ending { date} year {money}

• trading account

• profit and loss account

  • variety of different types of profit

    • tell us if company making profit or loss

      • does tell why

    • TR

      • Sales Revenue - how much you actually made from sale of your product

      • - cost of goods sold - direct cost of production

      • = Gross Profit - profit or loss from a business

    • -TC

      • -Overhead / Expense

        • above are the trading activity of a business

        • below are the profit and loss account section

      • =Net Profit ( before Interest & Tax) - optional

        • this is all in control of the business

        • even the thing below cannot be controlled

      • -Interest

      • =Net Profit( before tax)

      • -Tax

      • =Net Profit

• appropriation account

  • if it is a public company

  • part of the profit goes to shareholders

    • Dividends

    • Retained Profit

Balanced Sheet

Balance Sheet - snapshot of the net worth of a company at one particular point in time

• called a balance sheet because two things have to balance

• net assets and equity have to balance

• net assets = equity

  • Net assets = assets - liability

    • assets- are values that a business owns

    • liability- values that a business owes

1. Title - Balance sheet for {company names} as at {date} - ($ money , year ) ($ money , year )

2. Non- current assets ( fixed assets)

   • items of value that a business owns that they plan on using in the production process for longer than a year

     • Ex

       • land

       • building

       • machines & equipment

         • total - non current assets

   Current Assets- item of value that a business owns that they plan to liquidate(sell) with in a year of the balance date

   • cash more

   • debtors

   • stock- inventory - the product that they own that they are trying sell to the customer-

     • total current assets

   Current Liability- items that a business owes thjat have pay off within a year of balance sheet

   • Creditors- opp debtor

   • Overdrafts

   • short- term borrowing

     • total current liabilities

   • working capital - money that business has for the daily running of the business CA(current assets) - CL( current liabilities)

   Non- Current Liability ( Long term liabilities) - items that a business owns taht they have more than a year to pay off

   • bank Loan / loan capital

   • debentures

   • mortrage

     • total non-current liabilities

   • Net assets = FA(fixed assets) +WC(working capital) - NCL ( non - current liabilities)

Equity 2nd half of balance sheet

finance by: (indicates that all of this is financed by this )

• share capital

• +retained profit

• = Equity

• double underline indicat taht is correct