1 / 7

Final accounts

Final accounts. Introduction This is a key topic in the OCR specification. In the Accounting Principles paper, a question will be asked requiring you to prepare: A trading account A profit and loss account A balance sheet

solada
Télécharger la présentation

Final accounts

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Final accounts

  2. Introduction This is a key topic in the OCR specification. In the Accounting Principles paper, a question will be asked requiring you to prepare: A trading account A profit and loss account A balance sheet This brings together much of the work in the Accounting Principles unit. Use the vertical form of presentation.

  3. For this topic, you need to know how the following are dealt with in the final accounts: Depreciation Prepayment and accruals Bad debts and provisions Discounts Loan interest Drawings.

  4. Depreciation The amount of depreciation for the financial year must be shown in the profit and loss account as an expense. The fixed assets must be shown in the balance sheet at the NetBook Value. The cost of the asset less the accumulated depreciation to date equals the Net Book Value.

  5. £ • Cost of motor vans 60,000 • Provision for depreciation: vans 15,000 • Depreciation policy: reducing balance • Profit and loss account extract • Depreciation: motor vans (45,000 × 0.20) 9,000 • Balance sheet extract • Cost Depreciation Net Book Value • Motor vans 60,000 24,000 36,000

  6. Prepayments and accruals You will be required to adjust the trial balance figures for prepaid amounts and accruals/amounts owing. Prepaid amounts are assets and must be debit balances in the ledger. Prepaid amounts must be shown in the balance sheet at the year end as current assets. The amount shown in the trial balance plus prepaid amounts at the start minus prepaid amounts at the end = the expense for the profit and loss account for the year. It is very important to revise the work covered earlier on adjustments.

  7. Making adjustments When the note in the additional information affects an account in the trial balance, it is a good idea to mark the value in the trial balance with a cross, or show the adjusted amount. Items that are crossed or marked should be ticked as they are dealt with. If any items are not ticked, this should act as a warning that the items must be dealt with in the final accounts. It is vital to work through questions on this topic from OCR past papers, and use the mark schemes to see how marks are awarded.

More Related