calculations and terms
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.
Net sales - cost of sales
Remember: Discount recieved= income +under gross profit
Discount allowed= expense - as an expense under gross profit
Balance sheet format
Non current assets
Less: Current liabilities
= Net current assets
Less: Non current liabilities
= Net assets
Plus: profit for the year