I'm just getting into my level 3 AAT studies and could use some help. I am familiar with the profit and loss accounts and balance sheets and i'm going through the activities in the Kaplan AP1 book (yep i went with Kaplan in the end, don't know if that was wise or not at this stage.) Anyhow i know which accounts to put where on the P & L and bal sheet and my totals are correct but im having trouble with the layout. Has anyone got any samples of typical P & L's and bal sheets? the P & L proforma i've got has 3 columns with pound symbols at the top, is there any specific way to fill these columns? do the columns have names?
Please feel free to PM me if this sounds confusing and i'll try to explain better.
Look at the accounts of two different companies and your likely to have two seemingly completely different sets of financial statements.
Quite often (bit not always) with a three column format the first two columns will be current period to the left, prior period to the right.
The first two columns are both current period with constituent values to the left and total to the right.
Lets take a trading P&L as an example.
Normally the format that you will see will be as per example (A) but when you see a real set of books often the format will be per Example B with the actual calculation relegated to being a note to the accounts.
Example (C) (the format I use) is thrown into the pot just to show yet another common presentation and it also swaps the current and previous year around.
Basically, the importance is not in the format per se but in the content and the consistency of presentation. You already know that certain information has to be presented. Whether that is presented on the face of the documents or in the notes or indeed the column format of the information is more flexible.
Just stick with the format that the course dictates for now but be aware that the financial statements do not always look quite the way that they do in the text books.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I agree with Shaun, you will come across various ways to present the financial statements.
Shauns are good examples of the common ones.
What you may also be seeing in your study books is an extension of Shauns example A, without the comparative year. In a lot of text books they show the P&L extended into sub totals, which will not have any header titles to the columns
example
Trading and Profit & Loss Account for year ended 31 December 200x
Thanks for the replies and yeah Wella thats what my proformas look like, i was stuck on which figures go in the first column which in the second and third and i have no knowledge of why and cant find the information. So if i was to put my figures in one column, just a straight down column using the correct figures would this be acceptable? I mean why are purchases and closing stock in the middle? I know its neat and tidy but i can find nothing written about why its configured this way.
Edit: Arghhhh i was just looking at Wella's example again and something clicked, if i keep the trading account seperate then it makes sense, like, work out the trading account then come back to the left to total the expenses. Damn my ounce of brain hurts.
Edit: Arghhhh i was just looking at Wella's example again and something clicked, if i keep the trading account seperate then it makes sense, like, work out the trading account then come back to the left to total the expenses. Damn my ounce of brain hurts.
To be honest, I don't know why the expenses (in Bill's example) aren't in the middle column other than it's easier to read which figures relate to the expense category when they are closer together.
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Yes but then you just end up with only two columns with anything in them. (would just end up looking like my option (A) but without comparatives).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Edit: Arghhhh i was just looking at Wella's example again and something clicked, if i keep the trading account seperate then it makes sense, like, work out the trading account then come back to the left to total the expenses. Damn my ounce of brain hurts.
Just re read you comment, and the penny dropped with me. You say "keep the trading account seperate" which is the normal convention. Dont forget the full title is a Trading and Profit & Loss Account. We tend to just shorten it to P&L account. The Trading Account is always calculated first, to give the gross profit.
Frank Woods Book Keeping and Accounts ISBN0273685481 (I use 6th edition but there are later editions now), has good examples of TPLs and balance sheets.
