Accounting SAC 3.2.1
Profit - answer is calculated by matching revenues earned against expenses incurred in
that period
closing a ledger account is necessary to - answer- transfer revenue and expense
amounts to calculate profit for the next period
- reset the revenue and expenses accounts to ero in readiness for the next period
revenue and expense accounts must be closed to - answer the profit and loss summary
account at the end of a period. profit is then transferred from the profit and loss
summary account to the capital account
the drawings account is transferred to - answer the capital account at the end of the
period
the income statement aids in – answer decision making by detailing the revenues
earned and expenses incurred during the period, and in the process showing both gross
profit and net profit
the income statement and profit and loss summary account should both -
answercalculate the same net profit figure
financial indicators used to assess performance include - answernet profit margin and
gross profit margin
businesses can adopt strategies to - answergenerate revenue and control expenses
graphical representations can assist in - answerunderstandability in communicating
financial information
the statement of receipts and payments reports - answercash received and paid, and
the change in the firm's bank balance over a period
the cash flow statement reports - answercash inflows and outflows relating to operating
activities, investing activities and financing activities and the change of the firms cash
balance over a period
operating activities - answerare cash flows related to day-to-day trading activities
investing activities - answerare cash flows related to the purchase and sale of non-
current assets
Profit - answer is calculated by matching revenues earned against expenses incurred in
that period
closing a ledger account is necessary to - answer- transfer revenue and expense
amounts to calculate profit for the next period
- reset the revenue and expenses accounts to ero in readiness for the next period
revenue and expense accounts must be closed to - answer the profit and loss summary
account at the end of a period. profit is then transferred from the profit and loss
summary account to the capital account
the drawings account is transferred to - answer the capital account at the end of the
period
the income statement aids in – answer decision making by detailing the revenues
earned and expenses incurred during the period, and in the process showing both gross
profit and net profit
the income statement and profit and loss summary account should both -
answercalculate the same net profit figure
financial indicators used to assess performance include - answernet profit margin and
gross profit margin
businesses can adopt strategies to - answergenerate revenue and control expenses
graphical representations can assist in - answerunderstandability in communicating
financial information
the statement of receipts and payments reports - answercash received and paid, and
the change in the firm's bank balance over a period
the cash flow statement reports - answercash inflows and outflows relating to operating
activities, investing activities and financing activities and the change of the firms cash
balance over a period
operating activities - answerare cash flows related to day-to-day trading activities
investing activities - answerare cash flows related to the purchase and sale of non-
current assets
