FINANCIAL ACCOUNTING REVISION

  • Created by: Arzoo.xo
  • Created on: 07-01-18 11:07
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  • FINANCIAL ACCOUNTING
    • INCOME STATEMENT
      • COST OF GOOD SOLD = OPENING STOCK + PURCHASES - CLOSING STOCK
      • GROSS PROFIT = SALES - COGS
      • OPERATING PROFIT = GROSS PROFIT - OPERATING EXPENSES
      • NET INCOME = OPERATING PROFIT - INTEREST - TAX
      • STRUCTURE
        • SALES
          • - COGS
            • = GROSS PROFIT
              • - OPERATING EXPENSE
                • = OPERATING PROFIT
                  • - INTEREST AND TAX
                    • = NET INCOME
    • BALANCE SHEET
      • NET ASSETS = TOTAL ASSETS - TOTAL LIABILITIES
      • STRUCTURE
        • NON CURRENT ASSETS
          • CURRENT ASSETS
            • CURRENT LIABILITIES
              • NON CURRENT LIABILITIES
                • CURRENT LIABILITIES
                  • NET ASSETS
                    • EQUITY - ( SHARE CAP. , RETAINED EARNINGS , DRAWINGS)
                      • TOTAL EQUITY
      • FOR RETAINED EARNINGS ADD ON NET INCOME FROM INCOME STAT.
    • RATIO ANALYSIS
      • ROCE = OPERATING PROFIT / TOTAL EQUITY +NON CURRENT LIABILITIES
      • PAYMENT SETTLEMNT PERIOD = PAYABLES / CREDIT PURCHASE X 365
      • GROSS PROFIT MARGIN = GROSS PROFIT / SALES X 100
      • OPERATING PROFIT MARGIN = OPERATING PROFIT / SALES X 100
      • INVENTORY HOLDING PERIOD = INVENTORY / COGS X 365
      • RECEIVABLE SETTLEMNT PERIOD = RECEIVABLE / CREDIT SALES X 365
      • CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES
      • ACID TEST RATIO = CURRENT ASSETS - INVENTORY / CURRENT LIABILITIES
    • T ACCOUNTS & JOURNAL ENTRIES
      • CASH IN = DEBIT
      • CASH OUT = CREDIT
      • DEBIT = GAIN
      • CREDIT = LOSS
      • C/D = CLOSING BALANCE
        • B/D = OPENING BALANCE
      • DEBIT BEFORE CREDIT ALWAYS
      • DOUBLE ENTRY = MUST BALANCE

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