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OTHER BUSINESSES IN PROFIT OR LOSS STATEMENT

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  • May 27, 2020 at 1:02 pm
    OTHER BUSINESSES IN PROFIT OR LOSS STATEMENT 2
    RizwanMehmoodRM
    Participant

    Dear Sir/Ma’m, My question may or may not be within the context of F7 Text Book but i am hopeful to get the answer.
    Question: if an owner has two other businesses other than his main business, he wants to include other businesses’s DAILY CASH SALES & CASH PAYMENTS only (without cost of sales of other businesses) Could he include such income (from their other two businesses) in his income statement under the heading of OTHER INCOME as follows:
    Income from Business 1
    Income from Business 2

    & Similarly after the Gross Profit:

    Business 1 Expenses
    Business 2 Expenses
    ???
    Secondly where he should make chart of Accounts of their other businesses income? Before Gross Profit or between the Gross Profit & Net Profit?

    May 29, 2020 at 8:47 pm
    OTHER BUSINESSES IN PROFIT OR LOSS STATEMENT 3
    P2-D2
    Keymaster

    Hi,

    You’re right in that this wouldn’t be seen in FR but I will explain as it is related a bit to FA. no, the business cannot include the sales of an entirely separate business within its accounts, even under a different heading of other income. It can only report the income/expense of its own operations.

    Thansk

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