Introductory accounting and finance :: essays research papers fc

Contents rapscallionPage 3 element A Trading, Profit and injustice account Page 4 atom B brace Sheet Page 5 segmentation CPage 6 Section DPage 7 Section EPage 8 Section FPage 9 Section GPage 10 Section HPage 11 BibliographyTrading, Profit & Loss accountfor Mr. Stanley relating to trading during Sales125000 little Cost of SalesOpening business line10430Add Purchases6763478064 slight returns outward-bound4878016Add Carriage Inward212080136Less Closing Stock1125068886GROSS PROFIT56114Less ExpensesSalaries28400Postage & Stationary98 exact & Rates (2900-860)2040Packaging3217Bad debt126Provision for Bad Debt60 indemnity1220Electricity (953+263)1216 Depreciation (3000 + 1680)468041057Carriage Outward285043907NET PROFIT12207This is a balance woodworking plane for Mr. Stanley as at 31st declination 2002. heady AssetsFixtures & Fittings (15,000 + 8,400)23,400Less Depreciation (3,000 + 1,680)4,68018,720Current AssetsStock 11,250Debtors3,200Less Prov.for bad debtcl3,050Bank5 90Add Prepayments8601,450Cash16515,915Less Current LiabilitiesCreditors6,765Accruals263 functional Capital7,0288,88727,607Financed ByCapital25,000Add Net Profit12,027Less Drawings9,60027,607C. Give an explanation of the write up treatment for invoices that have been uncompensated and lively at the date of the preparation of the final accounts.This is known as an assemblage of spendings, an accrual occurs when expenses that have occurred during an accounting period are not include in the trial balance, they are unpaid and unrecorded. When this occurs the accounting treatment in the profit and loss account would be to add the big pith to the expense in question showing the full make out of expense used up in that accounting period. In the balance sheet however an accrual is classed as a current liability. This is because the firm owes the outstanding keep down and is expected to pay this debt in the short term. The outstanding amount will therefore appear under current liabil ities in the Balance Sheet under the heading ACCRUALS. The reasons for making these adjustments is to ensure that the profit and loss account records the cost that has been incurred for that particular accounting period instead of patently the amount that has been paid.An example of an accrual during the accounting period of January 1st 2002 and December 31st 2002 a phone bill is incurred for the months June to September however it goes unpaid and is not incorporated into the telephone account. This means that adjustments have to be do so that it can be included in the final accounts for that accounting period.D. Mr. Stanley had paid a proportion of the rates for the following accounting period. explicate how this impacted on the preparation of the accounts for the current accounting period.A prepayment is when an amount is paid in advance of the accounting period in which it is very due.