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Why is your Net Income on bottom line Profit and Loss statement is negative?
Net income is negative which means that either company has earn less revenue or have incurred more expenses then revenue earned.
What is the meaning of the term revenue?
Revenue means the income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted. Revenue is shown usually as the top item in an income (profit and loss) statement from which all charges, costs, and expenses are subtracted to arrive at net income. Also called sales, or (in the UK) turnover.
Pro forma income statement?
pro forma income statement means the budgeted or estimated income statement which tries to see the future business position before it happens in actual.
What a projected income statement. In your explanation outline the purpose of a projected income statement?
Projected income statement means the preparation of propose or expected income statement of future or predicting the future income statement based on certain assumptions. Purpose of projected income statement is to find out or predicting the future of business by analyzing different scenarios in planning phase of business.
Is revenue another name for government income?
No. "Revenue" is any kind of income; it means "money collected". The government uses the word "revenue" to mean "money collected by the government", because the government is mostly concerned with how much money THEY collect, as opposed to somebody elses' revenue. The specific term for "government income" is a "tax".
Why is Net Income on bottom line of Profit and Loss statement negative?
Negative net income means that business has spend more and earn less in other words it is said that business has incurred more cost to earn less revenue in a fiscal year.
What is the matching concept in financial accounting?
The Matching Concept: A significant relationship exists between revenue and expenses. Expenses are incurred for the for the purpose of producing revenue. In measuring net income for a period, revenue should be offset by all the expenses incurred in producing that revenue. This concept of offsetting expenses against revenue on the basis of "causes and effect" is called the Matching Concept. The term 'matching' means appropriate association of related revenues and expenses. In matching expenses against revenue the question when the payment was made or received is 'irrelevant'. For example if a salesman is paid commission in January, 2001, for sale made by him in December, 2000. According to this concept commission expense should be offset against sales of December 2000 because this expense is incurred for producing revenue in December 2000. On account of this concept, adjustments are made for all outstanding expenses, accrued revenues, prepaid expenses and unearned revenues, etc, while preparing the final accounts at the end of the accounting period.
What is the journal entry for prepaid income?
The journal entry for prepaid income is a debit to the Cash account and a credit to the Unearned Revenue account. The Unearned Revenue account is a liability. The rationale for such an entry is that this is income received in advance. This means that the income has not been earned since the services have not yet been performed. When the services have been performed it is appropriate to recognize the revenue and offset the liability account, unearned revenue.
Explain why noncollectable accounts have both income statement and balance sheet implication for accounts?
If you can't collect a receivable, you have to write it off. Doing so means you credit the receivable on the balance sheet and debit the income statement with bad debt expense. This entry essentially reverses the initial entry which recognized the revenue and put the receivable on the balance sheet in the first place.
What are the main principles of accountancy?
Accountancy is the means by which financial information is communicated. Basic principles include the cost, matching, revenue and expense principles.
What is depreciation of fixed assets?
Depreciation is the method of allocation of part of cost to all fiscal years to which fixed asset is used for revenue generation to income statement
What payload means in term to shipping containers?
It is part of the cargo generating revenue or income. Usually defined by weight
