CXC CSEC Principles of Accounts (POA) exam guide: Section 5: The preparation and analysis of financial statements of the sole-trader
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CXC CSEC Principles of Accounts Exam Guide Section 5: THE PREPARATION AND ANALYSIS OF FINANCIAL STATEMENTS OF THE SOLE-TRADER |
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SPECIFIC OBJECTIVES The students should be able to: |
CONTENT
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| 1. | Explain the purpose of preparing financial statements; |
The purpose of preparing Financial Statements to satisfy the needs of user.
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| 2. | List methods of inventory (stock) valuation; |
Methods of inventory (stock) valuation: First in, First out (FIFO), Last in, First out (LIFO), Average Cost (AVCO)
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| 3. | Calculate the values of closing inventory (stock); |
Calculation of closing inventory (stock) using: FIFO, LIFO, AVCO. |
| 4. | Assess the effect of different method of inventory (stock) valuation on profit;
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The effect on profit of different methods of (inventory) stock valuation. |
| 5. | Prepare closing journal entries; |
(a) journal entries to close off accounts in the ledger (b) linkage with Trading and Profit and Loss accounts
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| 6. | Identify the components of the Financial Statements; |
Trading and profit and Loss Account and Balance Sheet.
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| 7. | Draw up the Trading and the Profit and Loss account to determine gross profit or loss and net profit or loss;
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Trading and Profit and Loss Account for sole-traders including: adjustments for return inwards and outwards; closing stock. |
| 8. | Show the effect of net profit or loss on capital;
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Treatment of net profit or loss on the Balance Sheet. |
| 9. | Use ratios to determine the performance (profitability) of the business; |
Trading results: simple ratios such as stock turn, average stock, gross profit percentage, net profit percentage.
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| 10. |
Prepare classified balance sheet in vertical style; |
Definition of working capital, Calculation of working capital; Preparation of classified Balance Sheet showing working capital.
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| 11. |
Explain the significance of the working capital for the operation of a business;
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Working capital as a basic tool for solvency;
Working capital formula. |
| 12. | Calculate ratios to demonstrate the financial position of a business; |
Analysis and interpretation of the financial position of a business using ratio: current ratio; acid test ratio; return on investment.
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| 13. | Make recommendations about a business based on ratio analysis. |
Preparation of simple reports evaluating a business based on ratios and making recommendations. |
My Test is in 11 hours... and
My Test is in 11 hours... and I'm cramming 2 years of work in one night xD. Thank God for this site!
thanks muchas gracias
thanks muchas gracias