Accountancy Formula Sheet
17 formulas across 5 chapters — with variables explained and exam tips where needed.
Ch 1Accounting for Partnership(5 formulas)
Interest on Capital
= Capital × Rate/100 × Time
Interest on Drawings (if due dates not given)
= Total drawings × Rate/100 × 6/12
Use 6 months as average time for drawings spread evenly throughout year
Profit sharing ratio — New partner
New ratio = Old ratio − Sacrifice ratio
Sacrifice Ratio
Sacrificing Ratio = Old Ratio − New Ratio
Gaining Ratio
Gaining Ratio = New Ratio − Old Ratio
Ch 2Goodwill(4 formulas)
Average Profit method
Goodwill = Average Profit × Number of years purchased
Super Profit method
Goodwill = Super Profit × Number of years purchased | Super Profit = Average Profit − Normal Profit
Capitalisation method
Goodwill = Total capitalised value − Net assets | Total capitalised value = Average profit × 100/Normal rate of return
Annuity method
Goodwill = Super profit × Present value annuity factor
Ch 4Retirement / Death of Partner(2 formulas)
Deceased partner's share of profit (death)
Profit = (Profit for the year × deceased partner's share) × (months/12)
Amount due to retiring partner
Capital + Reserves share + Goodwill share + Profit share − Drawings − Losses
Ch 5Company Accounts(4 formulas)
Calls-in-arrears
= Called up capital − Paid up capital
Paid up capital
= Called up capital − Calls in arrears + Calls in advance
Discount on issue of shares
= Issue price < Face value (debit to statement of P&L or securities premium)
Shares cannot be issued at discount below face value under Companies Act 2013
Securities Premium Reserve usage
Can be used to: issue bonus shares, write off preliminary expenses, write off discount on debentures/shares
Ch 8Cash Flow Statement(2 formulas)
Cash from Operations (Indirect)
Net Profit + Non-cash charges (depreciation etc.) ± Changes in working capital
Net Change in Cash
Cash from Operating + Investing + Financing activities