Chapter 9. Getting to Net Profit
Where the money goes
Capital spending
Capital assets that you already own
Capital assets that you want
Accounting for fixed assets
Operating expenditure
Net profit
Other income and expenditure
Moving on
“If little money does not go out, great money will not come in.”
—Chinese proverb
This chapter looks primarily at the costs associated with operating your business. These can be divided into capital and current spending – also known as investment and consumption. The accounting treatment of each one is slightly different.
Costs are usually split into functional areas (R&D, production, marketing and sales, etc.). In accounting terms, production costs go into a manufacturing or trading account, and all other functional ...
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