The Statement of Financial Position and Income Statement (part a) – ACCA Financial Accounting (FA) lectures
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Sir why was the drawings not subtracted from Profit?
As explained in the lecture, the drawings do not affect how much profit the business makes. They reduce the amount owed to the owner on the SOFP.
Is drawing subtracted for submision of capital and profit or it can reduce single one
Greetings Mr John Moffat. Thank you for taking the time, this is much appreciated. For i) statement of profit/loss, how did you arrive at Sales of 5,200?
Are you watching the lectures in the correct order??
It is the balance from the sales account (2,400 cash sales and 2,800 sales on credit).
sir what will the final profit
That what appears in the statement of profit and loss – have you watched all the lectures for this chapter?
2000
Greetings respected Sir John Moffat.
Is there any point where the capital amount/account itself reduces as well ? Let’s keep withdrawal a/c to the side.
Thanks so much for these fantastic videos you have taken the time to produce, with thorough explanations.
Just one query – for part (j) when the company receives half the amount owing to it on credit, why doesn’t the profit then go up by (half of 3000) 1400? Or is this amount already accounted for in receivables?
Apologies – this is my first day starting ACCA!
The sale (and therefore the profit) is recorded as soon as the sale is made, not when the cash is actually received.
Greetings respected Sir John Moffat.
Is there any point where the capital amount/account itself reduces as well ? Let’s keep withdrawal a/c to the side.