← Accounting syllabus

SingaporeAccounting

Financial Statements of a Sole Proprietor

5 dot points across 5 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

Why must spending be split into capital and revenue, and what happens to profit and assets if it is classified wrongly?

Distinguish capital expenditure from revenue expenditure and explain the effect of misclassifying them
A focused answer to the O-Level Principles of Accounts outcome on capital and revenue expenditure. The distinction, capital and revenue receipts, and the effect of misclassification on profit and on the statement of financial position.
8 min answer →

How do we turn a trial balance into a full set of financial statements, deciding where each balance belongs?

Prepare the income statement and statement of financial position from a trial balance
A focused answer to the O-Level Principles of Accounts outcome on building statements from a trial balance. Deciding where each balance belongs, dealing with closing inventory, and tying the statements together.
9 min answer →

How does each year-end adjustment flow through both the income statement and the statement of financial position?

Show the effect of year-end adjustments on the income statement and statement of financial position
A focused answer to the O-Level Principles of Accounts outcome on the dual effect of adjustments. How accruals, prepayments, depreciation and irrecoverable debts each change both the income statement and the statement of financial position.
9 min answer →

How is a sole proprietor's income statement built up from gross profit to profit for the year?

Prepare the income statement of a sole proprietor, distinguishing gross profit from profit for the year
A focused answer to the O-Level Principles of Accounts outcome on the income statement. The cost of sales and gross profit, adding other income, deducting expenses, and arriving at the profit for the year.
9 min answer →

How is a sole proprietor's statement of financial position structured, and how does the capital section reflect profit and drawings?

Prepare the statement of financial position of a sole proprietor, including the capital account section
A focused answer to the O-Level Principles of Accounts outcome on the statement of financial position. Non-current and current assets, current and non-current liabilities, and the capital section with profit and drawings.
9 min answer →