AccountingCode 7707
Limited companies
What this topic asks you to be able to do
- the ways in which a limited company can take the form of a trading, service or manufacturing business, or some combination of these
- the advantages and disadvantages linked to running a business as a limited company
- the term ‘limited liability’
- the term ‘equity’
- how a limited company's capital is structured: ordinary share capital, preference share capital, retained earnings and general reserve
- the characteristics that ordinary share capital has, and those of loan capital (debentures)
- the method for drawing up the statement of profit or loss, the statement of changes in equity and the statement of financial position
- the method for applying adjustments to financial statements as covered for sole traders in 5.1