1 Single Entry ( 單式記帳 ) and Incomplete Record ( 不完整會計記錄 ) Reference ： Chapter 2 （ Book 2, p.16) 19

2 AReasons for using Single entry The owners of small business may not recognize the need;or They do not have such knowledge.

3 BCalculation of Net profit 1.Using the opening and closing capital to calculate the net profit Opening capital ＋ Net profit － Drawings Closing capital

4 E.g. ： Opening capital ＝ $200 Closing capital ＝ $300 Drawings ＝ $10 Net Profit ＝ $110

5 2Using Assets and Liabilities to calculate the Net profit Assets ＝ Liabilities ＋ Capital (Non-current assets ＋ Current liabilities ）＝ (Long-term liabilities ＋ Current liabilities ）＋ （ Opening Capital ＋ Net profit － Drawings ）

6 E.g. ： Non-current assets ＝ $1000 Current assets ＝ $500 Long-term liabilities ＝ $300 Current liabilities ＝ $200 Opening capital ＝ $800 Drawings ＝ $100 Net profit ＝ $300 Exercises: Ex 2.8, 2.9X (p. 40)

7 CUsing T account to find out some figures 1Using Debtors A/C to find out the Sales E.g. ： 1 January, 2005, Debtors ＝ $ December, 2005, Debtors ＝ $1500 Cash received from debtors ＝＄ 500 Cheques received from debtors ＝＄ 3000

8 Debtors 2005 $$ Jan 1 Balance b/f 1000 Dec 31 Cash500 Dec 31 Sales4000Bank3000 Balance c/f

9 2Using Creditors A/C to find out the Purchases E.g. ： 1 January, 2005, Creditors ＝ $ December, 2005, Creditors ＝ $1000 Cash payment to creditors ＝＄ 400 Cheques payment to creditors ＝＄ 2000

10 Creditors 2005 $ $ Dec 31 Cash 400 Jan 1 Balance b/f 800 Bank2000 Dec 12 Purchases2600 Balance c/f Exercises: Ex. 2.6, 2.7X (p )

11 DUsing ratios to find out some figures e.g. ： Mark-up ＝ 50% Cost ＝ $100 Gross profit ＝ $50 Mark-up ＝ Gross profit ÷ Cost X 100% 1Mark-up

12 e.g. ： Gross profit margin ＝ 40% Sales ＝ $100 Gross profit ＝ $40 Gross profit margin ＝ Gross profit ÷ Sales X 100% 2Gross profit margin

13 3The relationship between mark up and gross profit margin Mark up changed to gross profit margin If mark up is ¼ Denominator ＋ 1 Gross profit margin is 1/5 Gross profit margin changed to mark up If gross profit margin is 1/3 Denominator － 1 Mark up is 1/2

14 e.g. ： Mark up ＝ 50% Sales ＝ $100 Gross profit ＝ ? Ans. ： Mark up changed to margin 50% ＝ 1/2 The denominator of 1/2 ＋ 1, gross profit margin changed to 1/3 Gross profit margin ＝ Gross profit÷Sales 1/3 ＝ Gross profit÷$100 Gross profit ＝ $33 1/3

15 EManager’s Commission Managers are very often paid a fixed salary plus a year- end bonus of certain percentage of the net profit for the year. The commission may be calculated based on the net profit after deducting such commission. Commission ＝ （ Net profit before deducting commission － Commission ） × Percentage of commission Percentage of commission × Net profit before deducting 100 ＋ Percentage of commission commission or

16 e.g. ： Net profit after deducting commission ＝ $1200 Percentage of commission ＝ 5% Commission ＝【 5÷ （ ）】 × $1200 ＝ $57.14