Past paper (FRA)

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
On the june 2005 paper for FRA on task 1.3 could ne one explain to me why we dont include the drawings in the capital a/c

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Past paper (FRA)

    Hi

    It's because when you input capital it is debited to the bank and credited to the capital account.

    When you withdraw money you credit the bank account and debit the drawings account.

    At the end of the financial period you produce a P&L and Balance Sheet, and at the bottom of the Balance Sheet under the financed by section you enter the amount of capital, add on any profits, deduct any losses and deduct the amount of drawings.

    Hope this is of some help, and good luck for the exams.

    Tracy

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