Final Accounts

How should the owner of a business use his financial statements?

• To calculate the cash drawings for the year

• To determine the amount due to trade payables

• To measure the change in the bank balance

• To monitor the progress of the business

Why does the owner of a business calculate profit?

• To find the return on capital

• To find the total expenses

• To know how much he can borrow from bank

• To know the loan interest he can afford to pay

How are net sales calculated?

• Sales- returns outwards

• Sales + carriage inwards

• Sales- sales returns

• Sales+ returns inwards

Calculate cost of sales of from the following information

Opening inventory $7000

Purchases $6000

Carriage inwards $1000

Closing inventory $2000

• $12000

• $10000

• $8000

• $1000

In which order current assets are recorded in statement of financial position?

• Inventory, cash in hand, cash at bank , trade receivables

• Inventory,trade receivables,bank,cash

• Inventory, bank , trade receivables, cash

• Trade receivables, inventory, cash , bank