Accounts question

[Archangel]

Not disappeared so much, more like been spent on the operating costs of trying to prop up a failing business.

I think you are correct Mr P.

[Pondlife]

So has the business borrowed 100,000 worth of stuff from trade creditors, retained 30,000 in stock, sold 30,000 worth to trade debtors at cost and the other 40,000 has disappeared?

Not disappeared so much, more like been spent on the operating costs of trying to prop up a failing business.

[Archangel]

.,,,

[xoggoth]

PS By the same token it could sell for a lot more of course. You need to make a judgement about the commercial value of the stock.

[xoggoth]

You can't even be sure all those trade debtors will pay up or that you could sell the stock if you had to.

Stock can potentially be a nightmare. Valuation in accounts will usually be based on cost price but HMRC may not accept that basis if you have to close the company, rather insisting on a commercial valuation.

[malvolio]

FFS! If you don't know that, just why are you looking to buy - and presumably operate - a business?

Trade debtors are people you've sold things to who haven't paid you. Trade creditors are suppliers you haven't paid yet. Other creditors and accruals (not accruels...) are provisions for bills you know are coming but haven't been presented yet, like wages, bank charges and so on.

On those numbers, and given your apparent skill level, walk very quickly in the opposite direction...

HTH

[Archangel]

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