profit and loss
... THE ACCUMULATED DEPRECIATION AND ANSWER ACCORDINGLY. Net Assets SOLE TRADER OPENING CAPITAL + FURTHER INJECTIONS OF CAPITAL - DRAWINGS + / - PROFIT / LOSS COMPANIES SHARE CAPITAL (ORDINARY + PREFERENCE) + RESERVES (REVENUE + CAPITAL) + RETAINED EARNINGS (OR PROFIT C/F) REVENUE RESERVES V CAPITAL RESERVES ONLY REVENUE RESERVES CAN BE DISTRIBUTED AS DIVIDENDS TO SHAREHOLDERS. CAPITAL RESERVES AND REVENUE RESERVES CAN BE CONVERTED INTO SHARE CAPITAL REVENUE RESERVES: RETAINED EARNINGS… CAPITAL RESERVES: REVALUATION, SHARE PREMIUM… TOTAL ASSETS - TOTAL LIABILITIES = * CAPITAL VALUE OF THE BUSINESS, * NET ASSETS OF THE BUSINESS, * SHAREHOLDERS' INTERESTS (COMOPANY), * OWNER'S EQUITY (SOLE TRADER). NET CURRENT ASSETS = CURRENT ASSETS - CURRENT LIABILITIES NB. REMEMBER TO CHECK THE DIFFERENCE BETWEEN ORDINARY SHARES, PREFERENCE SHARES, BONUS ISSUE, RIGHT ISSUE… Bad Debts and Accruals STEP 1: WRITE OFF BAD DEBTS TRADE DEBTORS LESS: BAD DEBTS = XXX STEP 2: MAKE A PROVISION USING THE REMAINING BALANCE = XXX TIMES % STEP 3: NET DEBTORS CALCULATION TRADE DEBTORS LESS: BAD DEBTS LESS: PROVISION STEP 4: INCREASE IN PROVISION ENDING PROVISION LESS: OPENING PROVISION NB. IF BAD DEBTS ARE ALREADY WRITTEN OFF, DON'T WRITE OFF AGAIN. CHECK THE QUESTION AND ANSWER ACCORDINGLY. INCREASE IN PROVISION IS THE AMOUNT CHARGED TO THE P&L STATEMENT. ACCRUALS PAID DURING THE YEAR + ACCRUALS END OF YEAR - ACCRUALS START OF YEAR. PREPAYMENTS PAID DURING THE YEAR + PREPAYMENTS START OF YEAR -...