Introducing Profit and loss statements
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Introducing Profit and loss statements

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A presentation for year 12 accounting students, introducing them to the components of basic Profit and Loss Statements

A presentation for year 12 accounting students, introducing them to the components of basic Profit and Loss Statements

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    Introducing Profit and loss statements Introducing Profit and loss statements Presentation Transcript

    • Reporting Period Time
    • Two Major Reports
      Profit and Loss
      Balance Sheet
    • Revenue less expenses = profit
    • Profit and Loss Statement
      Gross profit (Revenue less cost of goods sold)
      Net profit (Gross profit less expenses)
    • Cost of Goods Sold
      Includes any expenses incurred in purchasing the stock and getting it ready for sale. eg
      Cartage inwards
      Buying expenses
      Customs duty on imports
      Packaging costs
    • Calculating gross profit
      Revenue
      Cash sales X
      Credit sales XX
      Less cost of goods sold
      Cost of sales X
      Buying expenses X
      Import duty XX
      Gross profit X
    • Accounting for stock loss
      Revenue
      Cash sales X
      Credit sales XX
      Less cost of goods sold
      Cost of sales X
      Buying expenses X
      Import duty XX
      Gross profit X
      Less stock loss X
      Adjusted gross profit X
    • All the way to net profit!
      Revenue
      Cash sales X
      Credit sales XX
      Less cost of goods sold
      Cost of sales X
      Buying expenses X
      Import duty XX
      Gross profit X
      Less stock loss X
      Adjusted gross profit X
      Less expenses
      Cartage outward X
      Advertising X
      Office expenses X
      Interest XX
      Net Profit X
    • What about discounts?
      Revenue
      Cash sales X
      Credit sales XX
      Less cost of goods sold
      Cost of sales X
      Gross profit X
      Plus Other revenue X
      Discount revenueXX
      Less Other expenses
      Advertising X
      Office expenses X
      Discount expenseXX
      Net Profit X