Financial Statements - Preperation

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GRADE 12

GRADE 11


GRADE 10 - Financial Accounting of a sole trader - preparation of financial statements

Preparation of final accounts and detailed financial statements of a company taking into account year-end adjustments.

Year end adjustments:

  • trading stock deficit/surplus
  • consumable stores on hand
  • depreciation (on cost price/straight line, on diminishing balance methods)
  • bad debts
  • bad debts recovered (Including receipts from solvent estates)
  • correction of errors/omissions
  • accrued income (receivable)
  • income received in advance (deferred)
  • expenses prepaid
  • accrued expenses (payable)
  • provision for bad debts
  • adjustments related to income tax
  • adjustments related to the payment and declaration of dividends.

Final accounts:

  • Trading account
  • Profit and Loss account
  • Appropriation account

Reversal of certain adjustments, i.e. accruals, income received in advance, and prepayments

Financial statements and notes:

  • Income Statement
  • Balance Sheet
  • Cash Flow Statement

Analysis and indication of the effect of transactions on the accounting equation of a company; all transactions affecting a company up to financial statements

Integration of reporting and control of fixed assets

Integration of ethical considerations relating to companies - roles of shareholders and directors, manipulation of share prices, corporate governance, etc.

Integration of internal audit and control processes relating to companies

Application of GAAP principles and IFRS



Preparation of final accounts of a sole trader taking into account year-end adjustments

Related concepts

Application of GAAP principles

Accounting equation

Pre-adjustment Trial Balance

Year-end adjustments:

  • trading stock deficit/surplus
  • consumable stores on hand
  • depreciation (on cost price/straight line, on diminishing balance methods)
  • bad debts
  • bad debts recovered (Including receipts from solvent estates)
  • 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







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