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Sales revenue on credit totalled £526,000 (cost of sales £181,000).
Cash sales revenue totalled £88,000 (cost of sales £32,000)what does these problems mean by cost of sales? how can I classify it?
Cost of sales is what the goods that were sold cost the company to buy.
The gross profit is the sales revenue less the cost of the sales.
All of this is explained in my free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
I came across a question, it showed a list of balances and asked which items belong to the soFP as at 31 Oct 20X7. The answer did not include inventory at 1 Nov 20X6 but i have seen some soFP and all of them both show opening balances and closing balances presented in 2 columns. Could you explain it sir
The SOFP only shows the balances at the end of the accounting period.
The reason some businesses also show the balances at the end of the previous accounting period is simply to that the owners can compare this year with last year.
I do suggest that you watch my free lectures – they are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
Thank you so much for your help. I’ll go through all of your lectures :)) stay safe in this covid 19 pandemic
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