The Accounting Equation
Basic form
Assets = Capital + Liabilities Rearranged
Capital = Assets − Liabilities Every business transaction involves a debit entry and an equal credit entry.
Pearson Edexcel IGCSE Accounting 4AC1
📒 Edexcel IGCSE Accounting Formula Sheet 2026
Key formulas, ratios, and structures for Pearson Edexcel IGCSE Accounting — from double-entry principles to ratio analysis and depreciation calculations.
Accounting Equation Income Statement Ratio Analysis Depreciation
Our formula sheets are free to download — save this one as PDF for offline revision.
Aligned with the latest 2026 syllabus and board specifications. This sheet is prepared to match your exam board’s official specifications for the 2026 exam series.
All the Core Edexcel IGCSE Accounting Formulas in One Place
This formula sheet covers every calculation and ratio you need for the Pearson Edexcel IGCSE Accounting (4AC1) examination. Use it alongside your revision to ensure you can derive any formula quickly and interpret results accurately in context.
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Accounting equation and double-entry bookkeeping
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Income statement profit formulas
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Balance sheet structure and working capital
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Full ratio analysis with interpretation guidance
Accounting Equation & Double Entry
Every transaction must keep the accounting equation in balance.
Double-Entry Rules
Debit
Increase in assets | Decrease in liabilities | Decrease in capital | Expenses recorded Credit
Decrease in assets | Increase in liabilities | Increase in capital | Revenue recorded Owner's Equity (Capital Account)
Closing Capital = Opening Capital + Net Profit − Drawings + Additional Capital Introduced Income Statement & Profit Formulas
Follow the logical sequence from revenue to net profit.
Cost of Sales
Cost of Sales = Opening Inventory + Net Purchases − Closing Inventory Gross Profit
Gross Profit = Revenue − Cost of Sales Net Profit
Net Profit = Gross Profit − Expenses (overheads) Expenses include: wages, rent, utilities, depreciation, interest on loans, advertising.
Gross Profit as a Percentage of Sales
Gross Profit Margin (%) = (Gross Profit / Revenue) × 100 Net Profit as a Percentage of Sales
Net Profit Margin (%) = (Net Profit / Revenue) × 100 Balance Sheet Items
The balance sheet shows the financial position of a business at a specific date.
Balance Sheet Equation
Non-Current Assets + Current Assets − Current Liabilities − Non-Current Liabilities = Capital Working Capital
Working Capital = Current Assets − Current Liabilities Positive working capital is needed to meet day-to-day obligations.
Net Book Value of Non-Current Assets
Net Book Value = Cost − Accumulated Depreciation Ratio Analysis
State the formula, show calculation, give the ratio, and interpret in context.
Gross Profit Margin
Gross Profit Margin (%) = (Gross Profit / Revenue) × 100 Net Profit Margin
Net Profit Margin (%) = (Net Profit / Revenue) × 100 Return on Capital Employed (ROCE)
ROCE (%) = (Net Profit / Capital Employed) × 100 Capital Employed = Total Assets − Current Liabilities.
Current Ratio
A ratio of 2:1 is generally considered healthy. Too high may indicate inefficient use of assets.
Current Ratio = Current Assets : Current Liabilities Liquid (Acid Test) Ratio
Ideal around 1:1 — tests whether the business can pay immediate debts without selling inventory.
Liquid Ratio = (Current Assets − Inventory) / Current Liabilities Trade Receivables Days
Lower number = faster collection of money owed.
Trade Receivables Days = (Trade Receivables / Revenue) × 365 Trade Payables Days
Trade Payables Days = (Trade Payables / Cost of Sales) × 365 Inventory Turnover
Times per year
Inventory Turnover = Cost of Sales / Average Inventory Days
Inventory Days = (Average Inventory / Cost of Sales) × 365 Depreciation
Depreciation spreads the cost of a non-current asset over its useful economic life.
Straight-Line Method
Annual Depreciation = (Cost − Residual Value) / Useful Life (years) Constant charge each year. Best for assets that are used evenly (e.g., furniture, fixtures).
Reducing Balance Method
Annual Depreciation = Net Book Value at Start of Year × Depreciation Rate (%) Higher charge in earlier years; reflects faster loss of value (e.g., vehicles, technology).
Net Book Value
Net Book Value = Cost − Accumulated Depreciation (to date) How to Use This Formula Sheet
Boost your Cambridge exam confidence with these proven study strategies from our tutoring experts.
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Always Write the Formula First
In Edexcel exam questions, begin each calculation by writing the formula. Even if you make an arithmetic error, you may still earn method marks.
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Check Your Trial Balance
If your trial balance doesn't balance, methodically check each account before moving on. Don't rush — accuracy matters in accounting.
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Interpret Ratios in Context
When asked to comment on a ratio, always compare it to a previous year, a benchmark, or an industry standard. A number alone scores no marks.
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Practise Full Statement Layouts
Present income statements and balance sheets in the correct Edexcel format. Use past papers to familiarise yourself with the expected layout.
Formula Sheet FAQ
Quick answers about this free PDF and how to use it for exam revision and active recall.
Is the Edexcel IGCSE Accounting Formula Sheet 2026 free to download as a PDF?
Yes. This Tutopiya formula sheet is free to use and you can download it as a PDF from this page for offline revision. There is no payment or account required for the PDF download.
What Accounting topics and equations does this formula sheet cover?
This page groups key Accounting formulas in one place for revision. Master Pearson Edexcel IGCSE Accounting (4AC1) with this 2026 formula sheet. Covers the accounting equation, income statement, balance sheet, ratio analysis, and depreciation methods. Always cross-check with your official syllabus and past papers for your exam session.
Can I use this instead of the official exam formula booklet in the exam?
No. In the exam you must follow only what your exam board allows in the hall—usually the official formula booklet or data sheet where provided. This page is a revision and teaching aid, not a replacement for board-issued materials.
Who is this formula sheet for (Secondary)?
It is written for students preparing for assessments at Secondary in Accounting, including classroom revision, homework support, and independent study. Teachers and tutors can also share it as a quick reference.
How should I revise with this formula sheet?
Work through past paper questions, quote the correct formula before substituting values, and check units and notation every time. Pair this sheet with timed practice and mark schemes so you see how examiners expect working to be set out.
Where can I get more help with Accounting revision?
Explore Tutopiya’s study tools, past paper finder, and revision checklists linked from our tools hub, or book a trial lesson with a subject specialist for personalised support alongside this formula reference.
Need Help with Edexcel IGCSE Accounting?
Work through financial statements, ledger accounts, and ratio questions with an experienced Edexcel IGCSE Accounting tutor. We cover the full 4AC1 specification.
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This formula sheet aligns with Pearson Edexcel International GCSE Accounting (4AC1) specification content.
Always present financial statements in the correct format and include all formula workings in ratio questions.