Arts105/accg100 (1 Viewer)

[ReaveR]

Drawings and Capital are not part of profit. If you calculate profit as the change in equity, if someone adds (capital) or takes away (drawings), it changes the equity without actually changing the profit, meaning you'd get the wrong answer; so you add back the drawings and less the capital (reversing the effects).

 

[glitterfairy]

Thanks to Tabris, here is a note for any Creative Arts students.

Page 38. Statement of Owner's equity is OE1 + profit -Drawings = OE2.

 

[ReaveR]

There you go. I knew someone who knew what they were talking about would come along

 

[glitterfairy]

Haha, poor Tabris is going along at a snail's pace (and in baby language) for me on msn to make sure I understand everything. Everybody give him a pat! He deserves it!

 

[ReaveR]

*pat*_________________________________________________

 

[glitterfairy]

Notes for any other ARTS105 students:

For those coming from a humanities/english background, this may make it easier.

TEXT TYPES YOU SHOULD KNOW (constantly adding to this list)
Statement of financial position
Statement of financial performance
Statement of Owner's Equity
Statement of Cash Flow

Bank Reconcilliation Statements
Journal Entries
Ledgers

 

[Tabris]

everything is not difficult, except cash flows and bank reconciliation statements

the example i showed u was ok, but some q's they ask u identify what outstanding deposits and unpresented cheques rathar than give u it, which means, crossing here, ticking there etc....

Cash flows are abit different, in fact i forgot all about them!!

 

[glitterfairy]

Well, exam is in two days arts105 people. How's the studying going?