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• Zaheera
12/12/2025
Accounting
The Statement of Comprehensive Income
181
•
12 Dec 2025
•
Understanding the Statement of Comprehensive Income
• Zaheera
@zaheera_
1 / 3
Understanding the Statement of Comprehensive Income
Think of the statement of comprehensive income as a business report card that shows how well a company performed financially over a year or six months. It's like tracking your own spending and earnings, but for businesses.
This statement breaks down costs into two main categories. Cost of sales (direct costs) includes everything directly needed to make products - like raw materials and stock. Operating costs (indirect costs) cover expenses that keep the business running but aren't directly tied to making products, such as shop rent or office supplies.
The journey from daily transactions to this final statement follows five clear steps: transactions → day books → ledger → trial balance → statement of comprehensive income. Each step builds on the previous one, creating a logical flow of financial information.
Quick Tip: Remember that this statement only shows income and expenses - it doesn't include assets (what the business owns) or liabilities (what it owes).
The Trading Account and Key Calculations
The trading account forms the first part of your profit and loss account, focusing purely on sales income and the direct costs of making those sales. It's where you'll see how much profit the business made before considering any operating expenses.
You'll need to master several key equations for your exams. Revenue = Price × Quantity Sold gives you total sales income. The cost of goods sold calculation is more complex: start with opening inventory, add purchases (minus any goods taken for personal use and purchase returns, plus carriage inwards), then subtract closing inventory.
Gross profit is simply revenue minus cost of goods sold. This figure tells you how profitable the core business activity is before accounting for operating costs like rent, wages, or advertising.
Various income sources can boost your gross profit, including commission received, rental income, profit on disposal of assets, bad debts recovered, and discounts received from suppliers.
Exam Focus: These equations appear frequently in exam questions, so practise calculating cost of goods sold until it becomes automatic.
The Appropriation Account and Final Profit
The appropriation account is where operating costs meet gross profit to determine the business's final performance. This section shows whether the business actually made money after paying all its running costs.
Start with your gross profit from the trading account, then add any additional income sources like rent received, commission income, or profits from selling assets. These extra income streams can significantly boost overall profitability.
Next, subtract all operating expenses including wages, general expenses, depreciation, and any losses on asset disposals. Carriage outwards (delivery costs to customers) and discounts allowed to customers also reduce profits.
The final figure - profit or loss for the year - represents the business's bottom line performance. This crucial number tells owners whether their business operations were successful and helps them make future decisions about the company.
Success Strategy: When tackling exam questions, work methodically through each section rather than jumping around - this reduces errors and ensures you don't miss important items.
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Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
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This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
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In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
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very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
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I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
Understanding the Statement of Comprehensive Income
• Zaheera
@zaheera_
Learning to prepare financial statements for sole traders is a fundamental accounting skill that shows how businesses track their financial performance. The statement of comprehensive income (also called the profit and loss account) reveals whether a business made money or... Show more
Understanding the Statement of Comprehensive Income
Think of the statement of comprehensive income as a business report card that shows how well a company performed financially over a year or six months. It's like tracking your own spending and earnings, but for businesses.
This statement breaks down costs into two main categories. Cost of sales (direct costs) includes everything directly needed to make products - like raw materials and stock. Operating costs (indirect costs) cover expenses that keep the business running but aren't directly tied to making products, such as shop rent or office supplies.
The journey from daily transactions to this final statement follows five clear steps: transactions → day books → ledger → trial balance → statement of comprehensive income. Each step builds on the previous one, creating a logical flow of financial information.
Quick Tip: Remember that this statement only shows income and expenses - it doesn't include assets (what the business owns) or liabilities (what it owes).
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The Trading Account and Key Calculations
The trading account forms the first part of your profit and loss account, focusing purely on sales income and the direct costs of making those sales. It's where you'll see how much profit the business made before considering any operating expenses.
You'll need to master several key equations for your exams. Revenue = Price × Quantity Sold gives you total sales income. The cost of goods sold calculation is more complex: start with opening inventory, add purchases (minus any goods taken for personal use and purchase returns, plus carriage inwards), then subtract closing inventory.
Gross profit is simply revenue minus cost of goods sold. This figure tells you how profitable the core business activity is before accounting for operating costs like rent, wages, or advertising.
Various income sources can boost your gross profit, including commission received, rental income, profit on disposal of assets, bad debts recovered, and discounts received from suppliers.
Exam Focus: These equations appear frequently in exam questions, so practise calculating cost of goods sold until it becomes automatic.
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
The Appropriation Account and Final Profit
The appropriation account is where operating costs meet gross profit to determine the business's final performance. This section shows whether the business actually made money after paying all its running costs.
Start with your gross profit from the trading account, then add any additional income sources like rent received, commission income, or profits from selling assets. These extra income streams can significantly boost overall profitability.
Next, subtract all operating expenses including wages, general expenses, depreciation, and any losses on asset disposals. Carriage outwards (delivery costs to customers) and discounts allowed to customers also reduce profits.
The final figure - profit or loss for the year - represents the business's bottom line performance. This crucial number tells owners whether their business operations were successful and helps them make future decisions about the company.
Success Strategy: When tackling exam questions, work methodically through each section rather than jumping around - this reduces errors and ensures you don't miss important items.
We thought you’d never ask...
What is the Knowunity AI companion?
Our AI Companion is a student-focused AI tool that offers more than just answers. Built on millions of Knowunity resources, it provides relevant information, personalised study plans, quizzes, and content directly in the chat, adapting to your individual learning journey.
Where can I download the Knowunity app?
You can download the app from Google Play Store and Apple App Store.
Is Knowunity really free of charge?
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The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user