Part 2 The Financial Statements of Sole Traders Revision Notes
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1. Vertical Income Statement - Syllabus aim is to prepare income statements and statements of financial position for trading.
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2. Vertical Sole Trader Balance Sheet - Syllabus aim is to prepare a balance sheet of assets and liabilities on a specified date.
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3 Financial Statements Further Considerations - Syllabus aim is to make adjustments for provision for depreciation, accrued and prepaid expenses, accrued and prepaid income, bad debts, provisions for doubtful debts and drawings of goods taken by the owner for own use.
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4. The effects of Profit & Loss - Syllabus aim is to recognise that net profit (or loss) is the increase (or decrease) in the net assets during that period.
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5. The Final Capital Account - Syllabus aim is to be able to construct a final capital account from the income statement using the double entry system.
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