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Introduction
When there is no continuous record or no proper record of transactions
Existing records are destroyed or damaged
Some businesses would use a single-entry system which does not contain complete records
Methods :
There are two methods to help businesses that have incomplete records which are :
A. Comparison method B. Analysis method
A. COMPARISON METHOD
:: WHEN THE INFORMATION IS VERY LIMITED :: STATEMENT OF COMPREHENSIVE INCOME IS OFTEN CALLED STATEMENT TO ASCERTAIN PROFIT AND STATEMENT OF FINANCIAL POSITION IS CALLED STATEMENT OF AFFAIRS
B. ANALYSIS METHOD
It can be used when more information are available such as revenue and expenses. It can also use mark up and margin to find the missing information such as sales, purchases and cost of goods sold. Hence the gross profit can be determined.
EXAMPLE
Tips!
1. ARC AND APC
(TO FIND SALES AND PURCHASES ON CREDIT)
3. Depreciation
4. Find the bank/cash ending balance
(bank beginning balance + receipt - payment)
Mark up
It is a profit of percentage on cost price Gross Profit x 100 Cost Selling Price Cost of Goods Sold = Profit Ex. Selling price is RM5 and cost is RM 4, profit is RM 1.
From another aspect, mark-up can be looked at as the percentage of cost to be added to cost to come up with the selling price.
Selling price = Cost + ( % Mark-up x Cost)
Margin
It is a profit in percentage on sales. Gross Profit x 100 Selling Price Margin = Profit/ Selling price So margin is 1/5 or we expressed in term of percentage as 20%. EXAMPLE
EXERCISE 1 EXERCISE 2
THE END.
THANK YOU FOR YOUR ATTENTION