Accounting · Study Guide
Key Points
Sole trader accounts show the owner's capital account, not issued share capital
Profit or loss flows through to the statement of financial position as an increase or decrease in capital
Adjusted trial balance figures are used to prepare the statement of profit or loss and statement of financial position
Exam Focus
Prepare complete sole trader accounts in standard format with correct headings, subtotals, and ledger account workings shown.
Must-Know Terms
Cross-Theme Connections
Accounting concepts used in the preparation of accounting records
Adjustments are applied before preparing sole trader statements
Limited company accounts
Limited company accounts follow the same double-entry foundation but differ in structure
Analysis and evaluation of financial information
Financial statements are then analyzed using ratios