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The Statement of Financial Position and Income Statement (part d)

VIVA Subject Guide
YouTube video

72 Comments

  1. Zohrab
    Cl.Cap=Op.Cap + Cap introduced/injection/investment + Profit(Loss) - Drawings
  2. Omer
    asset - capital = liabilities
    is this true ?
  3. John MoffatTutor
    Yes it is true :-)
  4. Najibullah
    I think about the calculation of DRAWINGS we have been mistaken if we use the below formula the answer is something like 86000$ the formula is like [ Drawings = Net Assets at End - Net Assets at Start + Profit - Additional Capital Introduced ]
    what do you thing?
  5. Alvin
    Use [Drawings = Net Assets at Start - Net Assets at End + Profit + Additional Capital Introduced]
    You made a mistake in the change of subjects
  6. Najibullah
    I think about the calculation of DRAWINGS
  7. Abdirahman
    A: When we purchase a non-current asset like a car it is called capital expenditure.
    B: When we paid expenses like electricity it is called revenue expenditure.
    C: When we purchase some goods what is called?
  8. John MoffatTutor
    Goods for resale are revenue expenditure.
  9. PortiaKhwekhwe
    Thank you for the lecture Sir, everything is clear and concise. Very helpfull indeed!
  10. Andre
    4-th factor that affects Net Capital (besides profit, drawings and owners investment) is reserves on revaluation of NCA. Is my understanding correct?
  11. MUHAMMAD ADNAN
    what is the difference between revenue and income?
  12. John MoffatTutor
    Revenue is the amount receivable from the sales. Depending on the context, income can mean the same thing or it can mean the profit (although then it should strictly be called the net income).
  13. Ziggy
    Hello professor, a question if you don't mind.

    We didn't include "Loss" as the 4th reason/item in the Increase in Net Asset equation because "that is simply negative profit". Then why did we include "Drawings" in the said equation? Aren't drawings "negative capital introduced" too?
  14. John MoffatTutor
    Drawings have to be shown separately in the Statement of Financial Position.
  15. Ziggy
    That makes sense. Thank you for responding!
  16. John MoffatTutor
    You are welcome :-)
  17. SIMONE
    Is asset expenditure the same as capital expenditure?
  18. John MoffatTutor
    It is capital expenditure if they are buying non-current assets.
  19. Somuto
    Hello John, thanks for the lectures. You say a capital expenditure is when we purchase a non-current asset. Is it also a capital expenditure when we purchase inventory (which is a current asset)?
  20. John MoffatTutor
    No - that is revenue expenditure (when we buy it, it is purchases. Inventory is what is left of the purchases at the end of the period).
  21. faisal
    thank you so much and it is very clear in explanation
  22. John MoffatTutor
    Thank you for your comment :-)
  23. Munawwar
    Your explanations are very clear and easy to understand, Thank you for your service....
  24. John MoffatTutor
    Thank you for your comment
  25. Viktoriia
    Hello, Sir!

    Thanks for the lesson!
    Could you please tell me, is the revenue expenditure the same as OPEX (operating expenses)?
  26. John MoffatTutor
    Yes - operating expenses are revenue expenditure.
  27. Herbert
    I am learning a lot.Its clear and precise.Thank you Sir
  28. John MoffatTutor
    Thank you for your comment :-)
  29. Herbert
    I am learning a lot.Its clear and precise.
  30. Gladys
    Thank you, SIR. I don't understand how you come about the $4,000 as the final answer Sir.
  31. Emma
    Great lessons so far very clear even though I already knew it you have made it clearer thank you.
  32. John MoffatTutor
    You are welcome :-)
  33. sharon
    Your explanations are so clear and concise. Thank you so much for such an excellent and helpful learning platform.
  34. John MoffatTutor
    Thank you for your comment :-)
  35. tasha
    Good day Sir. Great lecture. I presume from the lecture that it is correct to say that the Cost of Sales is a subset (part of) of Revenue Expenditure. Is that correct?
    Secondly I hear a lot about CAPEX, OPEX & COST OF SALES, will it be correct to say that Revenue Expenditure = Cost of Sales + Operational Expenditure (OPEX)?
  36. John MoffatTutor
    CAPEC and OPEX are not terms that have any relevance for Paper FA. The cost of sales is revenue expenditure.
  37. tasha
    Many thanks for your clarification Sir.
  38. abdull
    passed foundation level in 3 months,thank you sooo much sir
  39. John MoffatTutor
    That is great news :-)
  40. Hasan
    God bless you, sir!
  41. John MoffatTutor
    Thank you :-)
  42. Blessings
    Can't drawings be considered to be negative capital introduced to further simplify the "2nd" accounting equation?
  43. John MoffatTutor
    They are effectively negative capital. However we do have to show them separately on the SOFP. Also, they will be given separately in question testing you on the accounting equation.
  44. zojessy
    Great lecture Prof.

    How about costs of acquiring a capital expenditure eg; vehicle, the whole expenses involved In acquiring it like shipment costs. How do we cost it?
  45. John MoffatTutor
    This is all explained in later lectures :-)
  46. Magdalena
    Hello, great and very understandable lectures, thank you so much! Just one question: when we buy a current asset such as inventory, is it a capital o revenue expenditure?
  47. John MoffatTutor
    Inventory is revenue expenditure - we are not intending to keep it and it will be sold to earn revenue.
  48. Ansar
    Prof...I never imagined it to be this easy..thank you.
  49. Kok Hue
    Sorry sir,
    i can't find the FA MCQ test after click on the link in the note,
    is it changed to other name ?
  50. John MoffatTutor
    Here is a link to the test:
    https://opentuition.com/acca/fa/fa-chapter-2-questions/
  51. Kok Hue
    Appreciate ,
    one more video completed,
    move on .
  52. Kin
    Thank you professor. Your lecture is really easy to understand.
  53. John MoffatTutor
    Thank you for your comment :-)
  54. kandiero
    Thank you have understood the equations
  55. Brian
    I have not heard your lectures on any of the skilled level courses yet, but i can certainly say that you are excellent apt and very understandable in the areas of Financial and Management Accounting. Thank You
  56. mohd1994
    where is the FA MCQ test
  57. Raj
    Thank you sir for everything you've done for us. I find your lectures and notes very helpful all thanks to your way of explanation.
  58. John MoffatTutor
    Thank you for your comment :-)
  59. ARTWELL
    I have just signed up to open tuition and I am going it. Thank you Sir John, my exam is 28th Oct so working hard to get through the lectures.
  60. kanishi
    You explain each and every concept so clearly. Thank you so much sir.
    In India there are very less coaching institutions for Acca and your video lectures helped me a lot
  61. John MoffatTutor
    Thank you for your comment :-)
  62. khristova
    Thank you very much, it is so easy with you :)
  63. John MoffatTutor
    Thank you for your comment :-)
  64. emily
    Very clear and easy to understand Lecture.
  65. John MoffatTutor
    Thank you for your comment :-)
  66. Onur
    Such a clear and joyful lecture. You are making this so very easy to understand, thank you so much for your help. :)
  67. John MoffatTutor
    Thank you for your comment :-)
  68. ollmir
    Thank you so so much, you are the best lecturer, i wish we could have you in our class !!!
  69. John MoffatTutor
    Thank you very much for your comment :-)
  70. Asif
    I second that
  71. vdmjv
    Sir, I watched all videos in this chapter, then tried to do some Kaplan tests related to this chapter and I found some questions that your lectures does not include.
    Are that questions redundant or should I use any additional material to be confident I will not meet anything new at exam?
  72. John MoffatTutor
    You will have to say what the questions are!

    (But post in the Ask the Tutor Forum - not as a comment on a lecture :-) )

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