2.  Cost of Sales – How much it costs the company to make or buy goods.  Gross profit – profits made before paying bills  Net Profit – profits made after paying bills  Expenses – the company’s bills

3.  Assets – things the business owns and will give some benefit in the future. Split into Fixed Assets and Current Assets.  Liabilities – anything the business owes and must pay back at some stage  Finance By – the amount of money invested in the business by investors and bank loans

4.  ALWAYS TICK OFF THE ENTRY AS YOU ENTER IT INTO YOUR AC AND MAKE SURE TO HAVE TWO TICKS AFTER YOUR ADJUSTMENTS.

5.  Above the Debit side write – assets or expenses

6.  Above the credit side write – Liabilities and gains

7.  CLOSING STOCK  Subtract closing stock from cost of sales in the T P+L  Show closing stock as a current asset in the balance sheet

8.  Write the rules on your answer sheet  Expenses due – current Liabilities  Expenses prepaid – current assets  Gains due – current assets  Gains prepaid – current liabilities Look these are all opposites!!!!!!!!!  Remember anything receivable is a gain

9.  ADJUSTMENTS TO THE TRADING PROFIT AND LOSS A/C SHOULD BE ENTERED INTO THE TRADING A/C AND BALANCE SHEET.

10.  Add the amount due to the expense in T P+L  Show the amount due as a current liability in the balance sheet  E.g Wages Due

11.  Subtract the amount prepaid from the expense in the T P+L  Show the expense prepaid as a current asset in the balance sheet  E.g Insurance Prepaid

12.  Add amount due to the gain in the P T+L accounts  Show the amount due as a current asset in the balance sheet  E.g Rent Received Due

13.  Subtract the amount prepaid to the gain in the T P+L  Show the amount prepaid to the firm as a current liability  E.g Interest Received Prepaid b

14.  Depreciation is when fixed asset decrease in value  Show the amount in with the expenses in the T P+L account  Subtract the amount of the depreciation from the fixed asset in the balance sheet  E.g Motor Vehicles + equipment