Accounts Preparation- SPL and SOFP

FrancesM

I am trying to get my head around what should be included in Statement of Profit or loss and Statement of Financial position in the extended trial balance.

Does anyone have any tips of remembering which goes in which?

In theory I know that Revenue and costs go in SPL and Assets and liabilities go on SOFP but when I go to do the Mock exams I get mixed up.

amy256

Statement of Profit or Loss = Income & Expenses e.g. Telephone, Repairs & Renewals, Light & Heat.

Statement of Financial Position = Assets & Liabilities e.g. Creditors/Trade Payables, Loans, Plant & Machinery.

Hope this helps

CeeJaySix

Think about whether the item relates to your financial position as of now, or whether it relates to performance in the period.

Performance = are you making money? Income and expenses.

Financial position = what do you have (assets), what are you owed (also assets), and what do you owe (liabilities).