20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for December 2024 exams.
Get your discount code >>

prepayment

This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.

Viewing 4 posts - 1 through 4 (of 4 total)

Author
Posts
March 16, 2020 at 4:56 am #565295
beticopper
Participant
- Topics: 69
- Replies: 13
when we have a prepaid expense ,net profit increases and we know that when net profit increases capital also increases so how capital remains unchanged when we have a prepaid expense?
March 16, 2020 at 7:14 am #565299
John Moffat
Keymaster
- Topics: 57
- Replies: 54478
The capital is displayed separately from the profit for the year.
March 17, 2020 at 9:09 am #565338
beticopper
Participant
- Topics: 69
- Replies: 13
don’t we add profit to the opening capital to reach the closing capital?
March 17, 2020 at 5:52 pm #565357
John Moffat
Keymaster
- Topics: 57
- Replies: 54478
For a sole trader, yes we do (but not for a limited company). However on the SOFP we still show the opening capital and the profit for the year separately.
Have you watched all of my free lectures?
Author
Posts

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.