Accounts and finance

Table of Contents

1. Topic pack - Accounts and finance - introduction
2. 3.1 Sources of finance - notes
3. 3.1 Sources of finance - questions
4. 3.2 Investment appraisal - notes
5. Investment appraisal
6. 3.2 Investment appraisal - questions
7. 3.3 Working capital - notes
8. 3.3 Working capital - questions
9. 3.4 Budgeting - notes (HL only)
10. 3.4 Budgeting - questions
11. 3.5 Final accounts - notes
    1. Final accounts
    2. Financial accounts
    3. Sample accounts
    4. Capital and revenue expenditure
    5. Trading and profit and loss accounts
    6. Profit and loss account - interactive graphic
    7. Balance sheets
    8. Balance sheet - interactive graphic
    9. Uses and limitations of published accounts
    10. Depreciation
    11. Terminal value
    12. Revaluation
    13. Intangible assets
    14. Dyson lose patent case
    15. Stock (inventory) valuation
12. 3.5 Final accounts - questions
13. 3.5 Final accounts - simulations and activities
14. 3.6 Ratio analysis - notes
15. 3.6 Ratio analysis - questions
16. 3.6 Ratio analysis - simulations and activities
17. Printable version

3.5 Final accounts - notes

Introduction

In the previous sections we looked at sources of finance and their suitability, used different methods of investment appraisal, defined working capital and prepared cash flow forecasts and explained the importance of budgets and calculated variances. We now move on to look at final accounts, methods of depreciation, intangible assets and stock valuation.

By the end of this section you should be able to:

• Explain the purpose of accounts
• Construct and amend accounts from information given
• Evaluate the importance of final accounts to each stakeholder group

• Calculate depreciation using straight line and reducing balance methods
• Evaluate the strengths and weaknesses of each method
• Explain the meaning and value to the firm of differ types of intangible assets
• Understand the difficulties associated with valuing intangible assets
• Make calculations of closing stock using LIFO and FIFO
• Calculate the effect of different stock valuations on profit