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Financial Statements of a Sole Proprietor
Quick questions on Financial statements from a trial balance explained: O-Level Principles of Accounts
5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What are closing inventory in both statements?Show answer
Closing inventory is usually given as a note after the trial balance (only opening inventory is a trial balance balance). It appears in both statements:
What is tying the statements together?Show answer
The two statements connect through profit: the profit for the year from the income statement is added to capital in the statement of financial position. When the capital section is built and the statement balances, the set is complete and internally consistent.
What is q1?Show answer
State which statement each belongs in: wages, trade payables, sales, drawings. [2 marks]
What is q2?Show answer
Opening inventory \4,000\, closing inventory \5,000$. State the cost of sales. [2 marks]
What is q3?Show answer
Explain why closing inventory appears in both financial statements. [2 marks]
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