ACCOUNTING SHORT NOTES BOOK
IAL (A/L) EXAMINATION
Contents
1. Break Even Analysis
2. Valuation of stock (Marginal & absorption)
3. Contribution and costing
4. Ratio analysis
5. Variance analysis
6. Investment appraisal
7. Consolidated Accounts
8. Cash flow statement
9. Budgeting
10. Publish Accounts
1
,This book is written for the students who want to revise all the chapters in
A2 exam (edexcel) quickly before their exam.
After each chapter do the past papers according to the revision plan (Past
Papers) at the end of the book
This book is not endorsed by Edexcel or Cambridge.
All the best for your exam.
Anuradha Senadheera {(BBA, MBA, PhD (reading), FIPFM (UK), AFIML (Australia)}
2
, Chapter 1
Break Even Analysis
Break Even point is a place where Total cost is equal to Total revenue. Company earns neither profit nor
loss in this point.
Formulas to study
1) B.E.P(units) =
Fixed cost
Contribution per unit
2) B.E.P(value) = B.E.P(units) x Selling price
3) Margin of safety (units) =
Existing output –B.E.P output
4) Margin of safety (value) =
Margin of safety (units) x Selling Price
5) Profit =
Total Contribution - Fixed cost
Angle of Incidence
Profit
B.E Value
B.E Point
S
a
l
e
Loss
Output
B.E Output
Profit
3
, Note:
ADVANTAGES OF BREAK EVEN ANALYSIS DISADVANTAGES OF B.E ANALYSIS
Easy method / Easy to understand It is assumed that all output is sold
Helps to measure profit and losses at different Depends on the accuracy and the quality of data
levels of production used
Help in decision making Time consuming to prepare
Do: 2008 June Question 4 here.
4
IAL (A/L) EXAMINATION
Contents
1. Break Even Analysis
2. Valuation of stock (Marginal & absorption)
3. Contribution and costing
4. Ratio analysis
5. Variance analysis
6. Investment appraisal
7. Consolidated Accounts
8. Cash flow statement
9. Budgeting
10. Publish Accounts
1
,This book is written for the students who want to revise all the chapters in
A2 exam (edexcel) quickly before their exam.
After each chapter do the past papers according to the revision plan (Past
Papers) at the end of the book
This book is not endorsed by Edexcel or Cambridge.
All the best for your exam.
Anuradha Senadheera {(BBA, MBA, PhD (reading), FIPFM (UK), AFIML (Australia)}
2
, Chapter 1
Break Even Analysis
Break Even point is a place where Total cost is equal to Total revenue. Company earns neither profit nor
loss in this point.
Formulas to study
1) B.E.P(units) =
Fixed cost
Contribution per unit
2) B.E.P(value) = B.E.P(units) x Selling price
3) Margin of safety (units) =
Existing output –B.E.P output
4) Margin of safety (value) =
Margin of safety (units) x Selling Price
5) Profit =
Total Contribution - Fixed cost
Angle of Incidence
Profit
B.E Value
B.E Point
S
a
l
e
Loss
Output
B.E Output
Profit
3
, Note:
ADVANTAGES OF BREAK EVEN ANALYSIS DISADVANTAGES OF B.E ANALYSIS
Easy method / Easy to understand It is assumed that all output is sold
Helps to measure profit and losses at different Depends on the accuracy and the quality of data
levels of production used
Help in decision making Time consuming to prepare
Do: 2008 June Question 4 here.
4
