Need To Know
1. What is an account (in accounting terms)?
2. What does the term trading mean?
3. What does the trading account find?
4. What are Sales?
5. What does the term Cost of Sales mean?
6. How is gross profit calculated? What is gross profit?
7. What are purchases?
8. How are Net Sales or Net Purchases calculated?
9. What is stock?
10. Distinguish between closing and opening stock.
11. What is a stocktake?
12. Why would a company complete a stocktake?
13. How is stock valued?
14. What are the guidelines for carrying out a stocktake.
15. Explain how to find Cost of Sales?
16. What are trading expenses?
17. Explain what each of the following mean: Custom duty, carriage inwards, and manufacturing wages.
18. How are trading expenses dealt with in the trading account and why.
19. Calculate Gross Profit and Gross Profit percentage.
Profit and Loss Account
20. What is a business overhead?
21. How do they affect business profit?
22. Why do businesses prepare a profit and loss account?
23. What is the difference between a profit and loss and a trading account?
24. How is net profit calculated?
25. What is the difference between a net profit and a net loss?
26. Distinguish between selling expenses and trading expenses?
27. Distinguish between capital and current expenditure.
28. Outline procedures that a business should follow to monitor its expenses.
29. What are gains? Give three examples.
30. How are they dealt with in the profit and loss account?
31. Calculate net profit percentage.
32. Give examples of different types of business owners.
33. How are profits distributed or treated. Three different examples.
34. What is a shareholder?
35. What is a dividend?
36. What are retained earnings?
37. Why are retained earnings useful?
38. What is the difference between authorized and issued share capital?
39. Why do some company’s pay more dividends than others?
40. Explain how a dividend is calculated?
41. What is the purpose of the Profit and Loss Appropriation Account?
42. Why are revenue reserve and dividends treated as liabilities?
43. What is a balance sheet? Why is it useful?
44. What is an asset? Distinguish, using examples, between fixed and current assets.
45. What is a liability? Distinguish, using examples, between current and long term liabilities.
46. What is a creditor?
47. Distinguish between dividend declared and dividend paid. Why might they differ?
48. Draft the layout of a balance sheet.
49. What is working capital?
50. Explain why it’s such an important figure.
51. What are total net assets? Why is it such an important figure?
52. What does liquidity mean?
53. What is contained in the “financed by” section?
54. What is depreciation?
55. What two figures must be the same in the balance sheet? Why?
2010 Trading Profit & Loss, Appropriation Account and Balance Sheet: Corr Ltd (Ordinary Level)
2011 Trading Profit & Loss, Appropriation Account and Balance Sheet: Brady Ltd (Higher Level)