Skills
IGCSE Accounting skills: step-by-step guides
Step-by-step guides to the main IGCSE Accounting tasks. Each one has an original worked example and the mistakes that cost the most marks.
How to adjust for accrued and prepaid income
Income is matched to its period. Accrued income is earned but not yet received, while income received in advance…
Read moreHow to balance off a ledger account
Balancing a ledger account finds the difference between its two sides and carries it forward at the period end, ready…
Read moreHow to calculate cost of sales
Cost of sales is the cost of goods sold in a period: purchases adjusted for opening and closing inventory. Deduct it…
Read moreHow to calculate depreciation (reducing balance method)
The reducing balance method charges a fixed percentage of the carrying amount each year, so the charge falls. It suits…
Read moreHow to calculate depreciation (straight-line method)
The straight-line method spreads a non-current asset's cost evenly over its useful life, charging the same each year.…
Read moreHow to calculate mark-up and margin
Mark-up and margin both show gross profit as a percentage. Mark-up is based on cost and margin on selling price, and…
Read moreHow to calculate profit or loss on disposal
When a non-current asset is sold, compare the sale proceeds with the asset's carrying amount to find a profit or loss…
Read moreHow to correct errors not shown by the trial balance
Some errors leave the trial balance balancing: omission, commission, principle, original entry, complete reversal and…
Read moreHow to correct errors using a suspense account
When a trial balance does not agree, the difference goes to a suspense account until the errors are found. Correcting…
Read moreHow to post from books of prime entry to the ledger
Books of prime entry gather similar transactions before they enter the double-entry ledger. Posting means transferring…
Read moreHow to prepare a bank reconciliation statement
A bank reconciliation explains why the cash book balance differs from the bank statement. The gap is almost always…
Read moreHow to prepare a limited company appropriation
After a limited company finds its profit for the year, an appropriation shows its use in reserve transfers and…
Read moreHow to prepare a manufacturing account
A business that makes its own goods prepares a manufacturing account. It works out the cost of the goods produced,…
Read moreHow to prepare a partnership appropriation account
The appropriation account shares a partnership's profit between the partners, dealing first with interest on capital,…
Read moreHow to prepare a petty cash book
A petty cash book records small cash payments under the imprest system, sorted into columns. The float is topped back…
Read moreHow to prepare a purchases day book
The purchases day book lists credit purchases from suppliers' invoices before posting. Like the sales day book, it is a…
Read moreHow to prepare a purchases ledger control account
A purchases ledger control account summarises transactions with credit suppliers. Its balance should equal the total of…
Read moreHow to prepare a receipts and payments account
A receipts and payments account summarises a club's cash and bank transactions for the year. It is the cash-based…
Read moreHow to prepare a sales day book
The sales day book lists credit sales from sales invoice copies before posting. As a book of prime entry, it is not…
Read moreHow to prepare a sales ledger control account
A sales ledger control account summarises the transactions with credit customers. Its balance should equal the total of…
Read moreHow to prepare a statement of affairs
A statement of affairs lists assets and liabilities to find capital when records are incomplete. The change in capital…
Read moreHow to prepare a statement of financial position
The statement of financial position sets out the accounting equation at one date: assets on one side, capital and…
Read moreHow to prepare a subscriptions account
A club's subscriptions account adjusts cash received for amounts owing and paid in advance, giving the year's income…
Read moreHow to prepare a three-column cash book
A three-column cash book records cash, bank and discount together. The discount columns are memorandum totals for…
Read moreHow to prepare a trial balance
A trial balance lists every ledger balance in a debit or credit column to check the arithmetic. Learn to build one and…
Read moreHow to prepare a two-column cash book
The cash book records cash and bank receipts and payments and doubles as a ledger account for both. Here is how to…
Read moreHow to prepare accounts from incomplete records
Some small businesses do not keep full double-entry records, so you have to rebuild the figures. This uses the…
Read moreHow to prepare an income and expenditure account
Clubs and societies prepare an income and expenditure account instead of an income statement. Unlike a receipts and…
Read moreHow to prepare an income statement for a sole trader
The income statement shows whether a sole trader made a profit or loss for the year, moving from revenue to profit for…
Read moreHow to prepare partners' capital and current accounts
In a fixed-capital partnership, each partner has a capital account for permanent investment and a current account for…
Read moreHow to prepare returns day books
Returns day books record goods sent back, supported by credit notes. Returns inwards come from customers and returns…
Read moreHow to record a provision for doubtful debts
A provision for doubtful debts estimates receivables that may not be paid, applying prudence without naming a customer.…
Read moreHow to record a share issue
When a company issues shares, the money received is split between share capital at nominal value and share premium for…
Read moreHow to record accruals and prepayments
Accruals and prepayments adjust expenses so each period bears the cost that belongs to it, applying the matching…
Read moreHow to record carriage inwards and outwards
Carriage inwards, the cost of bringing goods in, is part of their purchase cost. Carriage outwards, the cost of…
Read moreHow to record contra entries
A contra entry appears on both sides of the cash book when money moves between the business's own cash and bank…
Read moreHow to record goods taken for own use
When an owner takes goods for personal use, they are removed from purchases and treated as drawings, keeping profit and…
Read moreHow to value closing inventory
Closing inventory is valued at the lower of cost and net realisable value. This keeps profit cautious and stops…
Read moreHow to write a journal entry
The journal records non-routine transactions. It names the accounts to debit and credit and adds a short narrative…
Read moreHow to write off an irrecoverable debt
When a credit customer will not pay, the amount owed is written off as an irrecoverable debt so the accounts stay…
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