Financial Reporting LO1: Sole trader and partnership financial statements | IFA Direct

Learning Outcome 1 of Financial Reporting (R/650/9645), Level 5 Unit 1 of the ATHE Level 5 Extended Diploma in Accounting, taught by UK Versity for learners on the IFA Direct programme. LO1: Can prepare financial statements for sole traders and partnerships. This outcome shows you how to prepare financial statements for sole traders and partnerships. You will adjust a trial balance for inventory, depreciation, debts, accruals and prepayments, then build the income statement and statement of financial position. For partnerships you add the appropriation account, current accounts and policy notes. Finally you judge who uses the statements and how useful they are. Assessment criteria covered: 1.1: Prepare financial statements, incorporating relevant adjustments, for a specific sole trader 1.2: Prepare financial statements, incorporating relevant policy notes and adjustments for a specific partnership 1M1: Evaluate the purpose of preparing financial statements for sole traders and partnerships 1D1: Evaluate the usefulness of sole trader and partnership financial statements to organisational stakeholders Chapters 0:00 LO1 overview, aim and assessment criteria 0:33 Session roadmap 1:03 The statements you will prepare 1:59 Sole trader: Rahman Home Interiors trial balance 2:39 Worked example: valuing closing inventory 3:20 Depreciation: spreading the cost of an asset 3:58 Worked example: depreciation for the year 4:34 Irrecoverable debts and the allowance for doubtful debts 5:12 Worked example: debts and the allowance 5:48 Accruals and prepayments: matching costs to the year 6:22 Worked example: an accrual and a prepayment 7:04 Sole trader: income statement 7:43 Sole trader: statement of financial position 8:27 Partnership agreement: the default rules and typical terms 9:08 Partners' capital accounts and current accounts 9:45 Partnership: income statement with adjustments 10:26 Appropriation account and current accounts 11:10 Partnership: statement of financial position 11:51 Policy notes for the partnership accounts 12:28 No agreement: the default rules at work 13:09 Six stages of the accounting process 14:13 One repair through six stages 14:53 Why sole traders and partners prepare statements 16:02 Users of sole trader and partnership statements 16:40 A bank reads the partnership accounts 17:18 Key terms 17:39 Activity: adjustments for a business you know 18:12 Check your understanding 18:50 What Pass, Merit and Distinction look like 19:31 Summary 20:15 Plenary: further reading and resources 20:43 Plenary Watch the full IFA Direct playlist on the UK Versity channel:    / @ukversity   Study accounting online with UK Versity: https://www.ukversity.co.uk Course enquiries: admin@ukversity.co.uk #IFADirect #ATHE #Accounting #UKVersity #FinancialReporting #AccountingStudents UK Versity disclaimer: This video is UK Versity teaching material for learners on the ATHE Level 5 Extended Diploma in Accounting, studied with UK Versity on the IFA Direct programme. UK Versity is an ATHE approved centre; the video is produced by UK Versity and is not issued or endorsed by ATHE or the Institute of Financial Accountants. It is for study only and is not legal, tax, financial or professional advice. Organisation names are used for educational comment only. Figures and rules are correct at the time of recording; always check current guidance and your assignment brief. © UK Versity Online Limited. All rights reserved. COPYRIGHT NOTICE: All content in this video is the exclusive intellectual property of UK Versity Online. This video, in whole or in part, may not be copied, reproduced, distributed, uploaded to any third-party platform, embedded, or integrated into any website, application, or learning management system without the prior written permission of UK Versity Online and the payment of applicable royalties. Unauthorised use, reproduction, or distribution of this content constitutes an infringement of UK Versity's intellectual property rights and will be subject to legal action under applicable UK and international copyright law. For licensing or permissions enquiries, contact: info@ukversity.co.uk