100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary LPC Business Accounts BLP for BPP (Distinction Level) £3.99
Add to cart
Quickly navigate to
Preview
  2.  
  3. LPC
  4.  
  5. LPC
  6.  
  7. LPC

Summary

Summary LPC Business Accounts BLP for BPP (Distinction Level)

1 review
 1 purchase
  • Institution
  • LPC

Concise Business Accounts study guide/revision notes for the BLP module covering all content you would need to achieve a high Distinction grade. The notes contain a step by step guide for how to carry out the calculations as well as general exam advice. The notes were written for the course ...

[Show more]
Last document update: 2 year ago

Preview 2 out of 10  pages

Document information

  • September 2, 2021
  • March 31, 2022
  • 10
  • 2020/2021
  • Summary

Subjects

Written for

All documents for this subject (144)

1  review

review-writer-avatar

By: antoniaszapary • 2 year ago

Seller

avatar-seller
GDLandLPC

Reviews received

Content preview

Notes created using BPP materials and statute for the purpose of assisting existing BPP LPC students in BPP LPC exams only. They are
intended to be used as a supplemental tool to aid revision in conjunction with BPP materials, not as a replacement for them.



FINANCIAL STATEMENTS AND SOLE TRADERS



ALCIE classification
= system of categorising the trial balance entries

Assets Something you own
Separate accounts for each asset category eg vehicles
Fixed (non-current) = LT: tangible/intangible that enables a business to make a profit
Current = ST: cash/items which can be quickly turned into cash eg stock

Liabilities Something you owe
Separate accounts for each type of liability eg loans, trade debts
Current (paid within a year) eg overdraft or long-term (due after 1 year) eg loan

Capital Injection of value from the owner/investor – not money accruing from customers
Represents the owner of the business

Income Comes from regular sources
Separate accounts for each income source eg ticket sales, venue hire

Expenses Separate accounts for each expense source eg heating, postage bills
Day-to-day spending, NOT to be confused with capital expenditure ie buying assets



Trial balance used to construct the P&L Account and Balance Sheet
P&L Account =
Records the income of a business throughout an accounting period minus expenses incurred in that period,
to arrive at a net profit/loss figure for that period

Generally, only the income and expense entries from the trial balance are transferred into the P&L Account
Cost of sales = Opening stock + Purchase – Closing stock = Cost of sales



Profit and Loss Account used to construct the Balance Sheet
Balance Sheet
• Records the position re asset, liability and capital accounts from the trial balance
• Tells a reader:
o NAV – net worth/net asset value → recorded in the top half
o Capital invested in the business to achieve that net worth → recorded in the bottom half
→ these figures will be the same unless something has gone wrong – 2 halves must balance

Net assets = Fixed Assets (Net Book Value) + Net Current Assets = LT Liabilities
Drawings = withdrawals

, Business Accounts


YEAR-END ADJUSTMENTS



= modifications to the account entries on trial balance → made before financial statements are prepared to:
• Ensure all income and expenditure shown relates only to the relevant accounting period
• Anticipate current obligations as liabilities

DEPRECIATION
Deals with decline in value of fixed assets → 2 common ways used to depreciate assets:

1. Straight-line method
• Spreads the depreciation charge evenly over the life of the asset
• Gives rise to the same charge for depreciation each year
→ used where the service provided continues throughout its economic life on a consistent basis

2. Reducing balance method
• The depreciation charge each year is expressed as a % of the reducing balance (eg 20%)
• More depreciation is charged in earlier years since the net book value of the assets reduces each year
→ used where an asset loses a large part of its value in the first few years

Recorded in an:
• Expense account (as asset values are falling); and
• Liability account

COST – ACCUMULATED DEPRECIATION = NET BOOK VALUE
Net book value = estimate of the current value of the asset to the business

Category of fixed/ Depreciation charge for the year Prov’n for dep’n at start Accum’d dep’n at
non-current assets (P&L) of year (Trial balance) end of year (BS)
Asset in q Take asset cost from TB and apply Take straight from TB 2nd column + 3rd
straight line or reducing balance column
method, depending on q

Straight line method
Charge depreciation as a % of cost

Reducing balance
If it says 25% of Reducing Balance →
Original cost of asset (80k) – Provision
for depreciation (20k) cost = Reduced
Balance (60k)
THEN 25% of Reduced Balance (60k)

Buildings 2,000 (2% of 100,000) 39,600 41,600



2

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller GDLandLPC. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £3.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

69411 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 15 years now

Start selling
£3.99  1x  sold
  • (1)
Add to cart
Added