Final Accounts
Keep a Personal Checklist:
What are the two sets of final accounts statements that all companies are obliged to report to their shareholders?
Outline how four different stakeholder groups might make use of financial accounts.
What is the purpose of the statement of profit and loss?
What is a balance sheet (statement of financial position) and why is it said to be a static financial document?
What are intangible assets?
HL Extension
Why do firms depreciate the value of their fixed assets?
Distinguish between the methods of depreciation.
BE A CRITICAL THINKER: [AO3]
Examine the appropriateness of each depreciation method [HL only]
CAUTION: In videos and published statements you may find different terminologies, such as:
Statement of Profit & Loss = Income Statement = Statement of Operation
Sales Revenue = Turnover
Cost of Sales = Cost of Goods Sold = Cost of Revenue
Net profit before interest & taxes = Operating Income = EBIT (earnings before interest & tax)
Profit for Period = Net profit after interest & taxes = Net earnings = Net income
Retained profit = Retained earnings profits
Debtors = Accounts receivables
Trade Creditors = Accounts Payable
MAKE SURE TO USE THE PROPER TERM THAT COMPLIES WITH THE IB SYLLABUS
STATEMENT OF PROFIT & LOSS
IB Format - Statement of Profit & Loss: Profit-making entity
IB format Statement of Profit and Loss.pdfIB Format - Statement of Profit & Loss, Non-profit entity
IB format Statement of Profit and Loss, Non-Profit.pdfSTATEMENT OF FINANCIAL POSITION (BALANCE SHEET)
IB Format - Statement of Financial Position: Profit-making entity
IB format Statement of Financial Position.pdfIB Format - Statement of Financial Position: Non-profit entity
IB format Statement of Financial Position, Non-Profit.pdf[HL EXTENSION] DEPRECIATION
EXAM TIPS
- Know both statements well, and know each category (use the Interactive practice below to test your knowledge)
- To check if your balance sheet is correct, make sure that:
Assets = Liabilities + Equity
- Make sure to differentiate between 'Capital Employed' and 'Working Capital'