CAPS ACC 10 TERM 3 WEEK 1 – 6 Financial Accounting of a Sole Trader

TOPIC – Financial accounting of a sole trader – preparation of financial statements

Preparation of financial statements of a sole trader taking into account
yearend adjustments
Related concepts
Application of GAAP principles
Accounting equation

Year-end adjustments:
• trading stock deficit/surplus
• consumable stores on hand
• depreciation (on cost price/straightline, on diminishing balance. Methods)
• bad debts
• bad debts recovered (Including receipt from insolvent estate)
• correction of errors/omissions
• accrued income (receivable)
• income received in advance (deferred)
• expenses prepaid
• accrued expenses (payable).

Financial statements and notes:
• Income Statement
• Balance Sheet