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KASNEB CPA Accounting and Business Maths Formulae

Accounting ratios, depreciation, inventory valuation, break-even and statistics formulae for the KASNEB CPA foundation level.

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Accounting equation
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KASNEB CPA Foundation Level (Kenya) mock tests →
1
Accounting equation
Assets = Liabilities + Capital.
2
Straight-line depreciation
(Cost - residual value) / useful life.
3
Reducing balance depreciation
A fixed percentage of the net book value at the start of each year.
4
Net book value
Cost of the asset less accumulated depreciation.
5
Gross profit
Sales less cost of sales.
6
Mark-up
Profit as a percentage of cost.
7
Margin
Profit as a percentage of selling price.
8
Current ratio
Current assets / current liabilities.
9
Quick (acid test) ratio
(Current assets - inventory) / current liabilities.
10
Inventory turnover
Cost of sales / average inventory.
11
Receivables collection period
Trade receivables / credit sales x 365 days.
12
Payables payment period
Trade payables / credit purchases x 365 days.
13
Return on capital employed
Profit before interest and tax / capital employed x 100.
14
Gearing ratio
Debt / (debt + equity) x 100.
15
Earnings per share
Profit available to ordinary shareholders / number of ordinary shares.
16
Price-earnings ratio
Market price per share / earnings per share.
17
Closing capital of a sole trader
Opening capital + profit - drawings.
18
FIFO
First in, first out: the oldest inventory is treated as sold first.
19
Weighted average cost
Total cost of units available / total number of units.
20
Valuation of inventory
At the lower of cost and net realisable value.
21
Prepayment
A payment made for a benefit not yet received. It is a current asset.
22
Accrual
An expense incurred but not yet paid. It is a current liability.
23
Bad debt
A receivable that will not be collected and is written off as an expense.
24
Capital expenditure
Spending that buys or improves a non-current asset.
25
Revenue expenditure
Day-to-day running costs charged to the income statement.
26
Simple interest
P x r x t / 100.
27
Compound amount
A = P(1 + r/100)^n.
28
Break-even point in units
Fixed costs / contribution per unit.
29
Contribution per unit
Selling price per unit - variable cost per unit.
30
Price index
(Current price / base price) x 100.
31
Standard deviation
The square root of the variance.
32
Coefficient of variation
(Standard deviation / mean) x 100.

KASNEB CPA Foundation Level (Kenya) in Kenya

In Kenya, KASNEB CPA Foundation Level (Kenya) is part of: National exams in Kenya.

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