POA

• How to calculate Owner's equity?

  OE= A - L
• Assets


  Resources owned by the business
• Liabilities


  Amounts owed by the business to external parties
• Owner's equity (Shareholder's equity)

  The owners' investment in the business
• Internal users

  Owner, manager, partners, board of director
• External users (public group)

  Government, competitor, employees, customers,
• Revenue

  The total amount of income generated by a business through its normal operations over a specific period of time
• Expenses (business costs)

  It is the outflow of resources from a business resulting from the consumption of goods and services in the process of earning revenues
• When revenue is more than expenses, there is a profit. When revenue is less than expenses, there is a loss
• External users of financial statements (financing group)

  lenders, suppliers, investors
• External users (financing group)


  lenders, suppliers, investors,
• Why does manager need financial information

  To stop or continue a new product
• Why does bank need financial information?

  To decide whether to lend money to the business
• Why does supplier need financial information?

  To decide whether to sell to the business on credit
• Why does goverment need financial information?

  To decide the amount of tax to collect from the business
• What is another word for Bank overdraft?


  Cash at bank overdrawn
• Formula to calculate Profit?

  Profit = Rev - Exp
• Formula to calculate Assets?

  A = OE + L
• What is part of Owner's Equity


  Capital, Drawings, Profit or Loss
• How to calculate Gross Profit?

  Sales revenue - (Less) Cost of goods sold
• What are the different types of operating expense?

  Selling & distribution (promotional), General & administrative & Financial
• What is the revenue for service business called?

  Service fee / Fees revenue
• What part of operating expense is Salesman salaries part of?

  Selling & distribution
• Formula to calculate Working Capital

  Working Capital = Current Assets - Current Liabilities