3.6 Preparation of financial statements of sole traders

Content	Additional information
The use of concepts in the preparation of financial statements.	The use of concepts will result in recording: accruals and prepayments depreciation (using straight line and reducing balance methods) disposal of non-current assets provision for doubtful debts irrecoverable debts recovery of irrecoverable debts income due income received in advance goods taken for own use goods on sale or return inventory. Note: first in, first out (FIFO), average cost (AVCO) and last in, first out (LIFO) methods of inventory valuation will not be examined.
How to prepare financial statements of sole traders from ledger accounts including adjustments from the application of accounting concepts.	Sole traders’ financial statements could be for: service businesses trading businesses. Preparation of financial statements could include the recording of adjustments and items listed above in ledger accounts.
How to prepare income statements and statements of financial position from a trial balance including adjustments from the application of accounting concepts.

Content

Additional information

The use of concepts in the preparation of financial statements.

The use of concepts will result in recording:

accruals and prepayments
depreciation (using straight line and reducing balance methods)
disposal of non-current assets
provision for doubtful debts
irrecoverable debts
recovery of irrecoverable debts
income due
income received in advance
goods taken for own use
goods on sale or return
inventory.

Note: first in, first out (FIFO), average cost (AVCO) and last in, first out (LIFO) methods of inventory valuation will not be examined.

How to prepare financial statements of sole traders from ledger accounts including adjustments from the application of accounting concepts.

Sole traders’ financial statements could be for:

service businesses
trading businesses.

Preparation of financial statements could include the recording of adjustments and items listed above in ledger accounts.

How to prepare income statements and statements of financial position from a trial balance including adjustments from the application of accounting concepts.

Previous
3.5 Accounting concepts used in the preparation of accounting records

Next
3.7 Limited company accounts