The Statement of Comprehensive Income: A Comprehensive Guide

📊The statement of comprehensive income includes two sections: balance sheet accounts and nominal accounts.

💰Calculating cost of sales involves considering opening inventory, purchases, and carriage on purchases.

📈Gross profit is calculated by subtracting cost of sales from sales.

📉Operating expenses, such as maintenance, rates, and wages, are subtracted from gross profit to determine net profit or loss.

🖋️It's important to carefully analyze the additional information and pay attention to dates when completing the statement of comprehensive income.

What is the difference between balance sheet accounts and nominal accounts?

—Balance sheet accounts represent assets, liabilities, and equity, while nominal accounts include incomes and expenses.

How do you calculate cost of sales?

—Cost of sales is calculated by subtracting the opening inventory from the sum of purchases and carriage on purchases.

What is the formula for calculating gross profit?

—Gross profit is calculated by subtracting cost of sales from sales.

Which expenses are classified as operating expenses?

—Operating expenses include maintenance, rates, wages, salaries, stationery, bad debts, and insurance, among others.

What should you consider when analyzing the additional information?

—Pay attention to details such as inventory quantities, dates, and any additional expenses or adjustments mentioned in the information.

00:02The video provides an overview of the statement of comprehensive income and its sections.

03:36Sales and sales returns are considered when calculating gross profit.

05:09Cost of sales is calculated using opening inventory, purchases, and carriage on purchases.

09:19Closing inventory is determined based on physical stocktaking at the end of the period.

11:20Operating expenses, such as maintenance and wages, are subtracted from gross profit.