Interview
IGCSE Business Notes
- Course
- Institution
- Book
IGCSE Business Notes covering chapter 24 to 26 from "Cambridge IGCSE and O Level Business Studies 5th Edition"
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Grade 11 marketing (chapter 11)
-
Business Studies IGCSE/O Level - Full course summary
-
all answers to exam style questions of business book igcse
Seller
Follow
vikistanimir
Content preview
Chapter 24 – Income statementsAccounts: are the financial records of a firm’s transactions
Accountants: professionally qualified people who have responsibility for keeping accurate accounts and
producing final accounts.
Final accounts: produced are the end of the financial year and give details of the profit/loss made and the
worth of the business.
Computer files store records of sales, purchases, and transactions. Printed/retrieved when required.
Profit = Revenue – Cost of making it (it is the surplus remaining once costs are deducted) Increase by:
- higher revenue
- lower cost
- both
Profit is important because Reward for enterprise
Reward for risk-taking
Source of finance
Income statement: a financial statement which records the income and all costs incurred to earn that
income over a period of time aka profit or loss account.
Trading account: shows how the gross profit is calculated.
- Revenue: income of a business over a period of time made from sales.
- Cost of sales: cost of producing or buying in the goods actually sold during a time period.
Gross profit: Revenue – Cost of sales
(Not the final profit because no allowance for fixed costs/expenses)
- Net profit: calculated by deducting all expenses and overheads from gross profit.
- Depreciation: fall in value of a fixed asset over time, this is included as an annual expense.
- Retained profit: net profit reinvested into the business after deducting tax/payments to owners.
- Corporation tax
- Dividends
- results from previous year for comparison
Chapter 25 – Statement of Financial position
Statement of financial position (balance sheet): shows the value of a business’s assets and liabilities over a
particular time. Shows equity.
Equity: total sum of money invested into the business by the owners. Invested in two ways.
- Share capital: money put in when shareholders bought newly issued shares
- Reserves: Profit/loss reserves are retained profits from current/previous years. This profit is owned
by the shareholders but has not been paid out to them as dividends instead its kept as part of
equity.
Owner’s equity = Total assets – Total liabilities
Assets: items of value owned by the business.
- Current: owned and used within a year e.g., cash, stocks, debtors.
- Non-current: kept for more than a year e.g., land, buildings, equipment. Usually depreciate over
time. Intangible assets: do not exist physically but have a value e.g., copyrights.
Liabilities: debts owed by the business
- Current: short-term depts repaid in less than a year e.g., overdrafts, creditors.
- Non-current: long-term debts which do not have to be repaid within a year e.g., most bank loans.
Working capital = Current assets – Current liabilities
The benefits of buying summaries with Stuvia:
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
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
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 this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller vikistanimir. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R80,07. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
49497 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now