BPP Distance learning Unit 5 - query re Profit & Retained Profit T accounts

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi,

I've just started studying for Intermediate level via distance learning with BPP.

I'm on chapter 3 which deals with the accounting equation, and introduces the concept of retained profit.

I am working through activity 3.3 on p 84, but I'm confused by the answer as it includes T-accounts for both profit and retained profit, with entries that cross reference to the sales and purchases accounts, as well as drawings in the retained profit account.

I have never seen these T-accounts before and I'm confused by how/why to post to them.

Can anyone help?!

Thanks

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:BPP Distance learning Unit 5 - query re Profit & Retained Profit T accounts

    Hi Miss P

    As far as I can remember, this exercise is the only place in Unit 5 (including the exam and skills test) that I've seen T-accounts for profit and retained profit asked for so I wouldn't worry too much. You'll work out profits and retained profits as part of the process of drawing up the final accounts anyway so there's not a lot of point in bothering about T-accounts for these.

    In any case, things will become clearer (hopefully) once you've had a look at Profit & Loss accounts and balance sheets.

    Chris


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