Chapter 9

Cost of sales
 Opening inventory + purchases + carriage in - purchase returns - closing inventory

Carriage in   is the expense to the business for having purchases delivered.  It is added to purchases.

Carriage out  Is the cost of delivering goods to the buyer. Should be treated as an expense in the income statement.

Gross profit 
Net sales - cost of sales 

Remember:    Discount recieved= income                  +under gross profit
                      Discount allowed= expense                  - as an expense under gross profit

Non current assets
Curent assets
Less: Current liabilities
= Net current assets

Less: Non current liabilities
= Net assets

Financed by
Capital
Plus: profit for the year
Less: Drawings