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Is depreciation a source of fund?
Some people state that depreciation is a source of funds or a source of cash. I disagree. Depreciation expense is reported as a positive amount on the statement of cash flows prepared under the popular indirect method. However, the reason it is listed is to adjust the net income amount that had been reduced by depreciation expense on the income statement. (Recall that the depreciation entry debits Depreciation Expense and credits Accumulated Depreciation-the cash account is not involved.) In other words, the positive depreciation amount reported on the statement of cash flows is merely one of the adjustments needed to convert the accrual net income to the cash provided from operating activities. Depreciation is not a source of cash. Let's illustrate this with some amounts. A sidewalk florist operates a cash only business. During the most recent year, this florist had cash revenues of $100,000. Its expenses included $70,000 of cash expenses and $8,000 of depreciation expense on its truck that was purchased in an earlier year. During the year there were no other revenues or expenses, and the florist's cash balance increased by $30,000. The florist's income statement will report net income of $22,000 (revenues of $100,000 minus expenses of $78,000). The florist's statement of cash flows prepared under the indirect method will begin with net income of $22,000. It will then add the $8,000 of depreciation expense. The result is cash provided by operating activities of $30,000-which agrees to the business's change in its cash balance. The $8,000 of depreciation expense was not a source of cash, even though it appears as a positive amount on the statement of cash flows.
Is income tax an expense?
Yes. Depending on the specifics, it may or may not be a TAX DEDUCTIBLE expense, but it is most certainly an expense. (For example, your (or a Cos) state income tax is an expense, it pays it, its bottom line - the money it has to give to its owners is lowered by it), but and it is a deduction (or expense) against FEDERAL taxable income. But it is noot an expense in calculating the income you pay the State Tax on. Just like the Federal tax is NOT an expense (deduction) you can use to calculate the State Taxable Income on.
Is broken goods an expense or liability please explain it to me in detail thanks?
Libability is defined as the state of being responsible for something. An expense is the cost required for something. Whether or not broken goods are a liability or expense depends on the detail surrounding how the goods were broken. The goods would be an expense for the store who owned the goods unless they insisted the patron pay for the item. They would be a liability if the broken goods cause harm to someone.
What is a sentence for Define?
to state about
Define the term Circular state?
what is a circular state
How much money do you need to start a small auto supply business?
equity depends on expense . The answer is :- 1) sale = + 2) expenses = - 3) profit = - 33 % to 100 % of business sale ( depends on whether you are into manufacturing , licensed or purely trading business ) Cash required = 1) cash in hand =promoter's cash 2) investor's cash 3) debt Sale =expenses + profit /loss total expense : 1)operational expenses : short term + rolling 2) fixed expense 3) other expense 1) staff expenses =short term 2) electricity =short term 3) communication and traveling expenses =short term 4) price of quantity of auto supply = rolling expense 5) interest paid = rolling expense 6) price of location = fixed + rolling expense 7) cost of storage = fixed + rolling expense 8) tax = other expense 9) cost of machines/auto supply parts = fixed expense interest = 1) interest on promoter's money = -5% 2) interest on investor's raised = - 6% 3) interest on debt raised = - 12% other expense : 1) tax : a) income tax = - x % of profit ( depends on country ) b) sales tax = x% of sale ( depends on country/state ) c) municipal tax = fixed charge d) other tax = any protection money 2) depreciation : a) Depreciation on total cash =-10 % b) exigency = 10 % of exigency cash This 30 % exigency expense takes care of any losses and any abnormal requirements cost for one year of operation = money required =expense +30 % of expense Cash required = 3 years * cost for one year of operation
What does the quote 'Everyone wants to live at the expense of the state They forget the state wants to live at the expense of everyone' mean?
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Effects of final account if depreciation is ommitted?
if depreciation is omitted on final account it will Over state the profit .
Definition of per net state domestic product in India?
Net state Domestic Product = Gross Domestic Product(GDP) - Depreciation
What does the word define mean?
Define means to tell the meaning of something.to state the meaning of a word
What are incomparable adjectives?
these are the adjectives which we define in the state
Define capital and explain its characteristics?
Capital goods, real capital or capital assets are produced durable goods or any non-financial asset used in production of goods or services. They are not significantly consumed, how it is maintained varies by state, and capital is replaced after a depreciation period as newer forms continue to be made.
