Is this turnover??

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Nelson said:
You're mixing up the two fundamentals of accounting there, capital & revenue. Revenue has nothing to do with assets/liabilities. Assets and liabilities are Balance Sheet items, revenue is to do with Profit & Loss.

The Accounting Equation: Capital = Assets - Liabilities

The Business Equation: Profit = Income - Expenditure
Way to complicate things, guys!!!

Turnover = Sales. I know turnover has other meanings (for example, the company has a high staff turnover) but in rs125's example when he talks about turnover he's talking about sales.


If in 2005 you sell a car for £1600, your turnover is £1600.

But, what gives you the impression that your costs are irrelevant?

Turnover £1,600
Costs -£1,400
-------
Profit £200

You'll be taxed on your profit. If the tax rate is 20%, you'll pay £40 in tax.
 
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Desmo said:
His costs are irrelevant to his question. He asked what his turnover was and he was told £1600. That's it, end of :)
To his original question, yes. But then he made a statement that "costs are irrelevant" and I just couldn't let it slide!
 
Soldato
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tenchi-fan said:
To his original question, yes. But then he made a statement that "costs are irrelevant" and I just couldn't let it slide!
... and a quite ridiculous statement about revenue being on the balance sheet :) Pfft, tsk and other noises of incredulity...!

Lostkat said:
Nope, CIPS (chartered institute of purchasing & supply)
Bet that makes for as interesting after dinner conversation as ACCA ;)
 
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