Sole Traders
Aperçu
A sole trader is the simplest form of business: one person owns it, runs it, keeps the profit and carries the risk. At the end of every financial year that owner needs to answer two plain questions. How much profit did the business make this year, and what is it worth right now? The income statement answers the first, the statement of financial position answers the second, and learning to build both cleanly is the single most examined skill in Cambridge IGCSE Accounting.
In this lesson you will prepare a full income statement from a trial balance, splitting it into the trading section that produces gross profit and the profit and loss section that produces the profit for the year. You will then lay out a statement of financial position in the proper vertical order, dealing with the adjustments examiners love to slip in: depreciation, accruals and prepayments, irrecoverable debts and goods taken by the owner. Every figure here ties together, so you can see exactly how one adjustment ripples through the whole set of statements.
Objectifs
- the advantages and disadvantages of operating as a sole trader.
- how a sole trader can be a trading, service, manufacturing business or a combination of these.
- the importance of preparing statements of profit or loss and statements of financial position.
- how to prepare statements of profit or loss for trading, service, manufacturing businesses, or businesses which are a combination of these.
- the importance of producing statements of financial position to record assets and liabilities on a specified date.
- how to define the content of a statement of financial position: non-current assets, intangible assets, current assets, current liabilities, non-current liabilities and capital.
- the effect of a change in an account balance on other account balances in the financial statements.
- how to prepare statements of financial position for trading, service, manufacturing businesses, or businesses which are a combination of these.
- how to make adjustments for accumulated depreciation using the straight line, reducing balance and revaluation methods.
- how to make adjustments for accrued and prepaid expenses and accrued and prepaid income.
- how to make adjustments for irrecoverable debts and allowance for irrecoverable debts.
- how to make adjustments for drawings: goods and other assets taken by the owner, owner’s private expenses paid by the business.
Note de cours
Disponible sur l'application Green Bridge
Téléchargez l'application Green Bridge CBT sur votre téléphone ou votre ordinateur pour accéder aux notes de cours complètes, aux questions pratiques, et plus encore.
Évaluation de la leçon
Félicitations, vous avez terminé la leçon sur Sole Traders. Maintenant que vous avez exploré le concepts et idées clés, il est temps de mettre vos connaissances à lépreuve. Cette section propose une variété de pratiques des questions conçues pour renforcer votre compréhension et vous aider à évaluer votre compréhension de la matière.
Vous rencontrerez un mélange de types de questions, y compris des questions à choix multiple, des questions à réponse courte et des questions de rédaction. Chaque question est soigneusement conçue pour évaluer différents aspects de vos connaissances et de vos compétences en pensée critique.
Utilisez cette section d'évaluation comme une occasion de renforcer votre compréhension du sujet et d'identifier les domaines où vous pourriez avoir besoin d'étudier davantage. Ne soyez pas découragé par les défis que vous rencontrez ; considérez-les plutôt comme des opportunités de croissance et d'amélioration.
- Which item is deducted from gross profit to help arrive at the profit for the year? A. Revenue B. Closing inventory C. Wages D. Capital Answer: C
- A trader has opening inventory $5,000, purchases $40,000 and closing inventory $7,000. What is the cost of sales? A. $38,000 B. $42,000 C. $45,000 D. $52,000 Answer: A
- Revenue is $90,000 and cost of sales is $54,000. What is the gross profit? A. $36,000 B. $54,000 C. $90,000 D. $144,000 Answer: A
- Where do trade payables appear in the statement of financial position? A. Non-current assets B. Current assets C. Current liabilities D. Capital Answer: C
- Opening capital is $50,000, profit for the year is $18,000 and drawings are $12,000. What is the closing capital? A. $44,000 B. $56,000 C. $62,000 D. $80,000 Answer: B
Disponible sur l'application Green Bridge
Téléchargez l'application Green Bridge CBT sur votre téléphone ou votre ordinateur pour accéder aux notes de cours complètes, aux questions pratiques, et plus encore.
Disponible sur l'application Green Bridge
Téléchargez l'application Green Bridge CBT sur votre téléphone ou votre ordinateur pour accéder aux notes de cours complètes, aux questions pratiques, et plus encore.
Livres recommandés
Pratiquez des questions blanches
Vous voulez vous entraîner sur des questions blanches sur Sole Traders ? Téléchargez lapplication Green Bridge CBT pour accéder à des questions blanches et à des évaluations complètes sur ce sujet.
Téléchargez l'application sur Google Play.
Tout ce dont vous avez besoin pour exceller au JAMB, WAEC et NECO.
