The Statement of Financial Position and Income Statement (part c)
Reader Interactions
Comments
Leave a Reply
You must be logged in to post a comment.
Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
March 2025 ACCA Exam Results
20% off ACCA & CIMA Books
OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>
What about inventory, it is also an asset. The purchase of inventory would be a capital expenditure or a revenue expenditure??
The purchase of goods for resale is revenue expenditure. Only non-current assets are capital expenditure.
can you send me the video of F5& F3 Lecture note p/se help me !!!!!!!!!!!!!!!!!!!
Videos can only be watched online. It is the only way that we can keep this website free of charge.
Lecture notes can be downloaded free of charge.
Hello, Where can i get more practise at the equation net asstes = capital etc , question,
Hi, could anybody help me with this question please? Aubrey made a profit for the year of $345.687 and has closing net assets of $435.195. During the financial year, capital of $60.000 was introduced which consisted of $40.000 in cash and €20.000 in non -current assets. Drawings of $6.000 were taken out of the business each month. What was the opening capital balance? After watching a fantastic lecture on open tuition, I tried to use the formulae but am not really understanding if I’m using it right. So here it is… 435.195= 60.000+345.687-72.000 then 435.195 less 333.687 =101.508 Does that look right as I don’t really understand if that’s anywhere close to the answer? Many thanks in advance…
What you have done is correct 🙂
(I don’t have my calculator with me because I am on vacation, but in my head it seems correct 🙂 )
Thanks a lot 🙂
Hi,
Closing Net assets=Opening Net assets+introduced+profit-drawing, so
435.195=x+345.687+60000-72000
x=12089.508
Your equation is correct, but you have put the numbers in wrongly!!
If you are going to put closing net assets as 435.195 (instead of 435195) then you need to put profit as 60.0 and drawings as 72.0. So your final answer is wrong!
Given: Profit = 345,687, Net Assets = 435,195, investment = 60,000, withdrawal = 6,000*12 = 72,000
Required : Opening Capital = X
Opening Capital + investment + profit – withdrawal = ending capital
Net asset = Total assets – Total liablties= Ending capital = 435,195, given above
X +60,000 + 345687 -72,000 = 435,195
x = 435,195 – 333,687 =101,508
Check!
Opening Capital + investment + profit – withdrawal = ending capital
101,508 +60000 +345687-72000= 435 195
435,195 = 435,195
Thanks 🙂
Surely other factors from withdrawals, increase in capital and increase in profit can change the net assets figure for a company: such as an increase in the value of buildings owned i.e. appreciation…
Appreciation will only be relevant if there is a revaluation. This is not something that will happen often. If is really only limited companies that will do this, and it is dealt with in a letter chapter (on limited companies).
For a sole trader there is nothing else that will change net assets other than what is dealt with in this lecture.
the lectures are simple to understand its really helpful to me
thanks alot
Hi Admin,
the answers for the test aren’t to the end….. please let me know how I I I can get them please,
thanks a mil
im struggling on question 3 , is there a worked solution to question 3 please , somebody help
@r08923z, the ans is C bcoz at the year end net assets is worth 64800 so what u need to find is net assets at the begining of the financial year so use the eqn
closing net assets= opening net assets+capital introduced+netprofit-drawings
Hello, could you please write in details I can’t get answer c.
Thank you. J
The answer and the workings are at the back of the Course Notes.
helpfull
i am directly following the OT . i mean i am not getting any coaching from any college so i heard the lectures which were no doubt absolutely great and easy to understand but in the end of chapter 2 there are three test questions which were very tough and out of my understanding specially the third one i am very disappointed in myself 🙁
how can we match the answers of test questions?
can’t solve question 3
@aminah2010, The answers are on page 199 of the notes.
thanks
By definition, capital expenditure is spending on acquiring assets while revenue expenditure is spending on expenses. Inventory is an asset, how is spending thereon classifies?
By definition, capital expenditure is spending on acquiring assets while revenue expenditure is spending on expenses. Inventory is an asset, how is spending thereon classifies?
I am not sure but I think if you spend money on bying an inventory (assets not bills ) it could be capital expenditure.
thanks a mill great revision
Dear Admin, I’m new in learning ACCA topics. I started with F3 (financial accounting). Firstfull thanks for providing all nesessary materials.
Just i finish listening Chapter 2, and was working on a test at the end. i would ask you if i did it right? Q1-A, Q2- D, Q3-C.
Is it correct? Thanks in advance
natella: answers to all tests are at the end of the course notes
No, lectures are on line only, not offline(download)
Is it possible to download lectures and slides onto ipod touch.
Didnt take really long is finish off the entire chapter as per the given videos and practice questions, though I was using it as a revision material!
Thanks opentuition.com!