1
Page 1
Profit Calculation
Profit is income minus expenses for the period. Include only the income earned and expenses incurred for that period.
Profit = Income - Expenses
Remember
Profit is not the same as cash in the bank.
Accounting Student Book 1 chapters
Study
3 pages
Financial Statements
Reference: Pearson Edexcel International AS / A Level Accounting Student Book 1. Financial statements turn ledger data into a clear picture of performance and position.
What you'll learn
Main skills from this lesson
Prepare simple income statements
Prepare statements of financial position
Adjust for inventory, depreciation, accruals and prepayments
2
Page 2
Financial Position
The statement of financial position shows assets, liabilities and capital at a specific date.
Assets - Liabilities = Capital
Remember
It is a snapshot, not a movie.
3
Page 3
Year-End Adjustments
Adjustments such as depreciation, closing inventory, accruals and prepayments make statements more accurate.
Draft -> Adjust -> Final
Remember
Adjust before interpreting the result.
Great work
Continue with quizzes, flashcards, or games when you are ready.