ZIMSEC O Level · Principles of Accounts · Form 4
Incomplete records
Many small traders keep only a cash record. Profit can still be found.
- Statement of affairs: like a statement of financial position, used to find capital (assets − liabilities).
- Profit = closing capital − opening capital + drawings − capital introduced.
Worked example: Opening capital 8 000; closing capital 11 000; drawings 2 500; capital introduced 1 000. Find the profit.
Profit = 11 000 − 8 000 + 2 500 − 1 000 = 4 500
- Missing figures (credit sales, purchases) are found using control accounts: e.g. credit sales = cash received from customers + closing receivables − opening receivables.
Non-profit organisations (clubs and societies)
- Receipts and payments account: a summary of the cash book.
- Income and expenditure account: like an income statement; shows a surplus or deficit.
- Accumulated fund: the club's capital.
- Subscriptions in arrears (owed by members) are current assets; subscriptions in advance are current liabilities.
Exam tip: A receipts and payments account includes capital items; an income and expenditure account does not.
Check yourself
- Assets US$9 000 and liabilities US$2 500. Find capital.
- What is a club's capital called?
- Where are subscriptions paid in advance shown?
Show answers
- US$6 500
- The accumulated fund.
- Under current liabilities.
Questions about this topic (0)
No questions about this topic yet.
Sign in or create a free account to join in.