A balance sheet shows the value of a business at a particular time.
Q7
Q8 Why are these stakeholders interested in the finances of a business (2 reasons)
1. Are interested in accounts to see if the business has made a profit or loss.
2. So they know they will have bonus money to spend on improving the business.
1. Are interested in business accounts so they know they have a secure job.
2. So they know they will be getting paid the right amount of salary.
1. They have an interest in their financial accounts to make sure the business has enough income to pay back the money or goods they wish to borrow.
2. So they know that the business is making money and can afford to pay it back.
1. Customers are interested in financial accounts as they want to deal with a business that is profitable or financially secure
2. You don’t want to buy a product from a business that may not be there in the near future.
Q9 Sources of Finance
Q10: Goods and services
Q11: Complete a Cash Flow Forecast for Cahill.
- The owner has £300 in the bank.
- Rent = £300 per month.
- Wages = £600 per month.
- The pay their insurance (£100 in March).
- They wish to buy a car for £5000 in May.
- To buy the car, they will get a £5000 loan in May.
- Their business rates are: £150 per month in Jan/Feb, then £200 from Mar/June.
Q12: Draw the sequence of documents in the box below:
Receipt/Invoice/Statement of account/Purchase order/Remittance AS
Goods RN/Delivery note/Credit note/Cheque
People doing good in class should revise carefully regularly
a) Which document is sent with the goods? Delivery note
b) Name two security checks that appear on business documents? Signature and customer account number
c) Which document is sent once a month? Statement of account
d) Which document contains details of price, discount and VAT? Invoice
e) What document is sent with a cheque? Remittance advice slip
f) Why are there three copies of a delivery note (who keeps them)? There are 3 copies of a delivery note so that there is prove of delivery, so the buyer can have 1 the seller can have 1 and the delivery company.
g) Give two reasons why a credit note is sent? Damaged or faulty
(2)
h) Which 3 documents should be checked before payment is made and why? Invoice, goods received note and purchase order.
(3)
13) Explain two advantages and two disadvantages of a company switching from a manual to a computerised accounts system?
Advantages: Easy to use takes up less storage space. (2)
Disadvantages: It might break, Need staff training. (2)
Profit and Loss
14) Draw a profit and loss account based on the following information?
15) What is a debtor? A person or business that owes you money
What is a creditor? A person or business that you owe money to
