Summary sheets
The key rules and formulas from every topic, one page per section. Read them here, or download a PDF to print or keep on your phone.
Sheet 1Foundations
Year 1 and 2: double entry, the ledger and year-end adjustments.
11 topics on one page.
Sheet 2Financial statements
Every main financial statement, shown as a real example with each line explained.
7 topics on one page.
Sheet 3Year 3: statements and analysis
Cash flows, ratios, and the standards on assets, revenue and financial instruments.
10 topics on one page.
Sheet 4Year 3: groups and more standards
Leases, consolidation, and the standards on policies, events, grants, borrowing, EPS, property, currency and fair value.
10 topics on one page.
Sheet 5Industry ready
What you’ll actually do in a graduate finance job, and how to get one.
6 topics on one page.
Sheet 6On the job
Realistic work simulations that start with an email from your manager.
8 topics on one page.
Foundations
Year 1 and 2: double entry, the ledger and year-end adjustments. Download this sheet as a PDF
The accounting equation
- Assets = liabilities + capital. Every transaction keeps both sides equal.
- Capital = opening capital + profit − drawings.
- Profit increases capital; drawings and losses reduce it.
Debits, credits and account types
- DEAD CLIC: Debit Expenses, Assets, Drawings; Credit Liabilities, Income, Capital.
- Every entry has an equal debit and credit.
- An account’s normal balance is on the side that increases it.
Journal entries
- List the debit first, then the credit, indented, with a short narrative.
- Used for things that don’t go through day books: corrections, depreciation, accruals, disposals.
- Totals of debits and credits must agree.
T-accounts and balancing off
- Debits on the left, credits on the right.
- Balance c/d on the smaller side so both sides total the same; bring it down (b/d) on the other side.
- A debit balance b/d is an asset or expense; a credit balance is a liability, income or capital.
Trial balance
- A list of every ledger balance: debits in one column, credits in the other; totals should agree.
- It won’t find errors of omission, commission, principle, original entry, reversal or compensating errors.
- A difference goes to a suspense account until the error is found.
Accruals and prepayments
- Accrual: expense incurred but not yet paid. Add to the expense; show as a current liability.
- Prepayment: paid in advance for next year. Deduct from the expense; show as a current asset.
- Accrued income is an asset; deferred income is a liability.
Depreciation and disposals
- Straight line = (cost − residual value) ÷ useful life.
- Reducing balance = carrying amount × rate.
- Disposal: profit or loss = proceeds − carrying amount at the date of sale.
Income statement
- Revenue − cost of sales = gross profit.
- Cost of sales = opening inventory + purchases − closing inventory.
- Gross profit − expenses + other income = net profit.
Statement of financial position
- Non-current assets at carrying amount, then current assets.
- Current liabilities are due within 12 months; non-current after.
- Capital section: opening capital + profit − drawings = closing capital.
Partnerships
- The appropriation account shares profit: salaries and interest on capital first, then the residual in the profit-sharing ratio.
- Interest on drawings is charged to partners and added back to profit available.
- Capital accounts are fixed; current accounts take each year’s share of profit and drawings.
Incomplete records
- Opening capital = opening assets − opening liabilities.
- Rebuild sales and purchases from control accounts: e.g. sales = cash received + closing receivables − opening receivables.
- Use mark-up (on cost) or margin (on sales) to find missing figures such as stolen inventory.
Financial statements
Every main financial statement, shown as a real example with each line explained. Download this sheet as a PDF
Sole trader income statement
- Revenue less returns, then cost of sales, gives gross profit.
- Expenses include depreciation, irrecoverable debts and the change in the allowance.
- Drawings are not an expense: they reduce capital.
Sole trader statement of financial position
- Net assets = total assets − total liabilities.
- Must equal closing capital.
- Receivables are shown net of the allowance for doubtful debts.
Company statement of profit or loss and OCI
- Profit from operations − finance costs = profit before tax; less income tax = profit for the year.
- Other comprehensive income: revaluation gains that don’t go through profit.
- Total comprehensive income = profit + OCI.
Company statement of financial position
- Equity = share capital + share premium + revaluation surplus + retained earnings.
- Tax payable and the current part of loans are current liabilities.
- Dividends are paid from retained earnings, not expensed.
Statement of changes in equity
- One column for each reserve, plus a total.
- Rows: opening balance, share issues, profit, OCI, dividends, transfers, closing balance.
- Excess depreciation moves from revaluation surplus to retained earnings.
Statement of cash flows
- Three sections: operating, investing and financing activities.
- Net change in cash = closing − opening cash and cash equivalents.
- Indirect method starts from profit before tax.
Consolidated statement of financial position
- Add parent and subsidiary line by line, 100%, even if the parent owns less.
- Replace the investment with goodwill; show the NCI in equity.
- Cancel intra-group balances and remove unrealised profit.
Year 3: statements and analysis
Cash flows, ratios, and the standards on assets, revenue and financial instruments. Download this sheet as a PDF
Statement of cash flows (IAS 7)
- Indirect method: profit before tax + depreciation − profit on disposal + finance costs ± working capital changes.
- Tax paid = opening liability + charge − closing liability.
- PPE purchases: use a working, adding back depreciation and disposals and removing revaluations.
Ratio analysis
- Profitability: gross and operating margin; ROCE = operating profit ÷ (equity + non-current liabilities).
- Liquidity: current ratio; quick ratio excludes inventory.
- Efficiency: receivables days = receivables ÷ revenue × 365. Gearing = debt ÷ (debt + equity).
IFRS standards overview
- IAS 1 presentation; IAS 2 inventory at the lower of cost and NRV.
- IAS 16 PPE; IAS 37 provisions; IAS 38 intangibles.
- IFRS 15 revenue; IFRS 16 leases.
IAS 36: Impairment of assets
- Impairment loss = carrying amount − recoverable amount.
- Recoverable amount = higher of fair value less costs of disposal and value in use.
- CGU losses go to goodwill first, then pro rata to other assets.
IAS 12: Deferred tax
- Temporary difference = carrying amount − tax base.
- Carrying amount above tax base (assets) = taxable difference = deferred tax liability.
- Movement goes to profit or loss (or OCI if the item went to OCI).
IFRS 9: Financial instruments
- Classify assets: amortised cost, FVOCI or FVTPL, by business model and cash flow test.
- Amortised cost: interest at the effective rate; the liability or asset table.
- Expected credit losses: 12-month ECL, or lifetime if credit risk rises a lot.
IFRS 15: Revenue in depth
- Five steps: contract, obligations, price, allocate, recognise.
- Allocate the price by relative standalone selling prices.
- Recognise at a point in time or over time; cash received early is a contract liability.
IAS 37: Provisions and contingencies
- Provide when there is a present obligation from a past event, a probable outflow and a reliable estimate.
- Possible: disclose a contingent liability. Remote: nothing.
- Expected value for many items; most likely outcome for one; discount if material.
IAS 16: Property, plant and equipment
- Cost includes purchase price and directly attributable costs.
- Revaluation model: apply to the whole class; gains to OCI and revaluation surplus.
- Depreciate the revalued amount; transfer excess depreciation to retained earnings.
IAS 38: Intangible assets
- Research is always expensed.
- Development is capitalised once all the PIRATE criteria are met.
- Internally generated brands and goodwill are never capitalised.
Year 3: groups and more standards
Leases, consolidation, and the standards on policies, events, grants, borrowing, EPS, property, currency and fair value. Download this sheet as a PDF
IFRS 16: Lease calculations
- Lease liability = PV of payments; right-of-use asset = liability + direct costs + payments in advance.
- Interest at the implicit rate; depreciate over the shorter of the term and the useful life.
- Exemptions: short-term (12 months or less) and low-value leases.
Consolidated statement of profit or loss
- Add 100% of the subsidiary, time-apportioned from acquisition.
- Remove intra-group sales from revenue and cost of sales; add URP to cost of sales.
- NCI share = NCI % × subsidiary’s post-acquisition profit (less URP if it was the seller).
IAS 8: Policies, estimates and errors
- Policy change and prior period error: retrospective, restate comparatives.
- Change in estimate: prospective, this year and later.
- If unsure, treat it as a change in estimate.
IAS 10: Events after the reporting period
- Adjusting: evidence of conditions at the year end (e.g. customer insolvency). Change the figures.
- Non-adjusting: new conditions (e.g. a fire). Disclose if material.
- Dividends declared after the year end are not a liability; going concern is the exception.
IAS 20: Government grants
- Recognise when reasonably sure of meeting the conditions and receiving the grant.
- Capital grants: deferred income released over the asset’s life, or deduct from cost.
- Repayment: set against deferred income first, then expense.
IAS 23: Borrowing costs
- Capitalise interest on a qualifying asset while it’s being built.
- Specific loan: interest less investment income. General: weighted average rate.
- Suspend during long pauses; stop when substantially complete.
IAS 33: Earnings per share
- EPS = (profit after tax − preference dividends) ÷ weighted average shares.
- Full-price issue: weight by time. Bonus issue: from the start of the year, restate the comparative.
- Diluted EPS adds potential shares; it’s never higher than basic.
IAS 40: Investment property
- Held for rent or capital growth; owner-occupied is IAS 16.
- Fair value model: gains and losses to profit or loss, no depreciation.
- Cost model: depreciate and disclose fair value.
IAS 21: Foreign currency transactions
- Record at the spot rate on the transaction date.
- Year end: retranslate monetary items at the closing rate; non-monetary stay at the historical rate.
- Exchange differences go to profit or loss.
IFRS 13: Fair value measurement
- Fair value is an exit price between market participants.
- Principal market first; otherwise the most advantageous (net of transaction and transport costs).
- Deduct transport costs, not transaction costs. Hierarchy: Level 1, 2, 3.
Industry ready
What you’ll actually do in a graduate finance job, and how to get one. Download this sheet as a PDF
Audit basics
- The auditor gives an opinion on whether the accounts are true and fair.
- Assertions: existence, completeness, accuracy, valuation, cut-off, rights and obligations.
- Evidence: inspection, observation, confirmation, recalculation, analytical review, enquiry.
Practical bookkeeping
- Bank reconciliation: adjust the cash book for bank items, then reconcile for timing differences.
- VAT: output VAT on sales − input VAT on purchases = amount due to HMRC.
- Control accounts check the sales and purchases ledgers.
Group accounts
- Control (usually over 50%) = subsidiary, consolidated in full.
- Significant influence (20–50%) = associate, equity method.
- Goodwill = consideration + NCI − fair value of net assets.
Interview prep
- Use STAR: situation, task, action, result.
- Know the three statements and how they link.
- Prepare questions to ask the interviewer.
Excel skills
- SUMIFS and XLOOKUP (or VLOOKUP) for pulling figures.
- Absolute references ($A$1) stay fixed when copied.
- Pivot tables to summarise large data sets.
Reading an annual report
- Strategic report: the business model, risks and KPIs.
- Auditor’s report: an unmodified opinion is a clean one.
- Notes explain accounting policies and the numbers in the statements.
On the job
Realistic work simulations that start with an email from your manager. Download this sheet as a PDF
Audit: testing receivables
- Send confirmation requests to customers to confirm balances (existence).
- Check after-date cash receipts.
- Review the aged listing for irrecoverable debts (valuation).
Audit: inventory count
- Test counts both ways: floor to sheets (completeness) and sheets to floor (existence).
- Note damaged or slow-moving stock for NRV.
- Record the last goods received and dispatched notes for cut-off.
Finance team: month-end close
- Post accruals, prepayments and depreciation.
- Reconcile the bank and control accounts.
- Review variances against budget and last month.
Tax: VAT return and corporation tax
- VAT due = output VAT − input VAT; standard rate 20%.
- Taxable profit adds back disallowable items (e.g. depreciation, entertaining) and deducts capital allowances.
- Corporation tax main rate 25%; small profits rate 19%.
Audit: going concern review
- Look for warning signs: losses, net current liabilities, loan breaches.
- Review cash flow forecasts for at least 12 months.
- Material uncertainty: disclosure and a separate paragraph in the audit report.
Audit: payroll
- Agree payroll to HR records to test for ghost employees.
- Recalculate PAYE and National Insurance deductions.
- Analytical review: compare pay costs month by month.
Audit: fixed asset additions
- Vouch additions to invoices (accuracy, rights).
- Check capital vs revenue expenditure.
- Inspect the asset physically (existence).
Finance team: accounting for a new lease
- Read the lease: term, payments, options.
- Build the liability table and post the opening journal.
- Depreciate the right-of-use asset monthly.