Business Level 3 Unit 5 P5 Business

1174 Words5 Pages
P5; The Trading Account; The trading account is an account that shows profits and losses for a business. There are three parts to the trading account, the first one is sales turnover and this is the money that is coming into the business by trading. The formula for sales turnover is quantity sold x the selling price. According to business alpha the sales turnover for this business is 3,057,000. The second component is the cost of sales which includes the costs directly linked to providing the trade. For example this is the cost of buying the products. The formula for cost of sales is opening stock + purchases – closing stock. According to business alpha the cost of sales is 2,647,000. The final component of trading accounts is gross profit; gross profit is the amount of money that is left after the cost of goods sold has been taken away from the stock turnover. The formula for gross profit is sales turnover – cost of goods sold. According to business alpha the gross profit was 410,000.…show more content…
These are tangible assets and examples of these assets are premises, fixtures and fitting, equipment and vehicles. For business alpha the fixed assets are 344,000. The next section for the balance sheet is current assets these are the items of value that is owned by a business which its values are likely to be help on a regular basis. Examples of current assets are stock, debtors and cash. For business alpha the total current asset calculation is to add all the assets In order to receive the full current assets. For business alpha the full current asset value is 251,000. The stock amount was 242,000 whilst the debt having 6,000 and the cash was 3,000. The current liabilities are something’s that are owned by the business which should be paid back by in less than one year. Examples of current liabilities are creditors. According to business alpha their credits

More about Business Level 3 Unit 5 P5 Business

Open Document