The Statement of Financial Position – ACCA Financial Accounting (FA) lectures
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Hello Mr. Moffat, are there situations where even in limited companies drawings are made and if so how would they be accounted for.
No. Money going to shareholders is called dividends and they are explained in the lectures on Limited Companies.
In the above lecture, in the case of Limited companies, he has been accumulating retained earnings but not share capita Why is this?
The share capital does not change (unless they issue more shares). The total capital (share capital + retained earnings) obviously does change as they make more profit, but the extra profit increases the retained earnings while the share capital stays the same.
best wishes to you, mr Moffat
Thank you 馃檪
Hello John,
Quick question if it’s alright, for a limited company, how is share capital determined if it’s not provided? Do we use the accounting equation?
Many thanks,
Thank you so much sir. May God bless you sir.
Thank you for sharing your resources. You are a star!
Thank you for your comment.
Thank you very much Mr. John Moffat. As I understood the limited company has the different presentation from sole trader on equity because is important to show the retained earnings changed every year, which is extra from the share capital.
Very well explained Mr. John. Just a short query here, why sole trader do not use the term “Retained earning” and presenting it the same why as in limited companies. I understand it is requirement for limited companies to present this why but why can’t the sole trader follow the same rule? same presentation?
He/she can if they want to but it is a bit pointless since it is all owed to the owner.
Thank you Sir. Well explained.
Thank you for your comment 馃檪
Thank you sir for the well explained differences.
Thank you for your comment 馃檪