Acca f3 financial accounting formula’s

CHAPTER # 05 LEDGER ACCOUNTS AND DOUBLE ENTRY

ACCOUNTING EQUATIONS

ASSETS = CAPITAL + LIABILITIES

OPENING CAPITAL + NET PROFIT – DRAWINGS + LIABILITIES

ASSETS = OPENING CAPITAL + NET PROFIT – DRAWINGS + LIABILITIES

IN OTHER FORM

CLOSING CAP = OPENING CAPITAL + FRESH CAPITAL + NET PROFIT – DRAWINGS

CHAPTER # 07 SALESTAX

FOR CALCULATION OF SALES TAX AMOUNT

SELLING PRICE IS INCLUSIVE SALES TAX X %100 + %

SELLING PRICE IS EXCLUSIVE SALES TAX X %100

CHAPTER # 11 ACCRUALS & PREPAYMENTS

DR INCOME CR OPENING BALANCE DUE OPENING BALANCE ADVANCECLOSING BALANCE ADVANCE CASH RECEIVED D.T.Y

CLOSING BALANCE INCOME DUEINCOME (I/S)

DR EXPENSES CR OPENING EXPENSE ADVANCE OPENING EXPENSES DUECLOSING EXPENSES DUE CLOSING EXPENSES ADVANCECASH PAID FOR EXPENSES EXPENSES F.T.Y

CHAPTER # 14 CONTROL ACCOUNT

ACCOUNTS RECEIVABLES A/COPENING (DR) BALANCE OPENING (CR) BALANCE CREDIT SALES (INVOICE ISSUE/ RAISED) CASH/CHEQUE RECEIVED CHEQUES DISHONOURED DISCOUNT ALLOWEDREFUND PAID TO CUSTOMERS SALES RETURN (CREDIT NOTES ISSUED)

BAD DEBTSA/R BALANCE SETOFF WITH A/P (A/R CONTRA WITH A/P)

CLOSING (CR) BALANCE CLOSING (DR) BALANCE

ACCOUNTS PAYABLES A/COPENING DR BALANCE OPENING CR BALANCE CASH / CHEQUE PAID CREDIT PURCHASE (INVOICE RECEIVED)DISCOUNT RECEIVED PURCHASE RETURN (CREDIT NOTE RECEIVED)A/P BALANCE SETOFF WITH A/R (A/P CONTRA WITH A/R)CLOSING CR BALANCE CLOSING DR BALANCE

CONTROL ACCOUNT RECONCILIATION SCHEDULE

A) book of original entryERRORS AMENDMENTS

A) WRONG RECORDING CONTROL A/C & LISTB) WRONG CASTING CONTROL A/C

b) general ledger (control a/c)ERRORS AMENDMENTS

A) WRONG POSTING CONTROL A/CB) WRONG CASTING CONTROL A/C

c) subsidiary ledger (individual a/c)ERRORS AMENDMENTS

A) WRONG POSTING LISTB) WRONG CASTING LIST

d) list of individuals a/cERRORS AMENDMENTS

A) WRONG LISTING LISTB) WRONG CASTING LIST

ESTABLISHING COST OF SALES

SINCE OPENING INVENTORY XPLUS PURCHASES XLESS CLOSING INVENTORY (X)EQUALS THE COST OF GOOD SOLD X

THEN THE COST OF GOOD SOLD XPLUS CLOSING INVENTORY XLESS OPENING INVENTORY (X)EQUALS PURCHASES X

CHAPTER # 26 INTERPRETATION OF FINANCIAL STATEMENTS

CAPITAL EMPLOYED = SHAREHOLDER EQUITY + LONG TERM LIABILITIES( OR TOTAL ASSETS LESS CURRENTS LIABILITIES)

RETURN ON CAPITAL = PROFIT BEFORE INTEREST & TAX EMLOYED CAPITAL EMPLOYED

RETURN ON EQUITY = PROFIT AFTER TAX 7 PREFERENCE DIVIDENDEQUITY SHAREHPLDER FUNDS

IN OTHER FORM

PROFIT MARGIN X ASSET TURN OVER = ROCEPBIT X SALES = PBITSALES CAPITAL EMPLOYED CAPITAL EMPLOYED

DEBT RATIOS = TOTAL DEBTSTOTAL ASSETS

GEARING RATIOS = TOTAL LONG TERM EQUITY X 100%SHARE HOLDER EQUITY + TOTAL LONG T.DEBT

LEVERAGE = SHAREHOLDERS EQUITY X 100%TOTAL ASSETS – CURRENT LIABILITIES

INTEREST COVER = PROFIT BEFORE INTEREST & TAXINTEREST CHARGE

LIQUIDITY RATIO & WORKING CAPITAL RATIOS INCLUDESCURRENT RATIOS , QUICK RATIOS , RECEIVABLES COLLECTION RATIOS, PAYABLES

RATIOS & INVENTORY TURNOVER RATIOS.

CURRENT RATIOS = CURRENT ASSETSCURRENT LIABILTIES

QUICK RATIOS = CURRENTS ASSETS LESS INVENTORYCURRENT LIABILTIES

A/C RECEIVABLES COLLECTION = TRADE RECEIVABLES X 365 DAYSPERIODS CREDIT SALES

PAYABLES PAYMENTS PERIOD = TRADE A/C PAYABLES X 365 DAYSPURCHASES

INVENTORY TURNOVER = INVENTORY X 365 DAYSPERIOD COST OF SALES