1.When production cost of goods are become higher.
2.Hike in interests on secured & unsecured loans, debentures and dividend on share capital.
3.when debtors balances are unable to collect in time and those balances turned out as sundry bad debts.
4.when payments were not made in credit period.
5.Increase in staff, facilities (Administration, Operations & Manufacturing).
6.Increase of Dollar price in international market comparative domestic currency value (In the case of purchases made from foreign and has to pay in dollars).
7.If the Net profits of orgn. not reached up to expectations.
8.Inflation (required hike in salaries & other benefits).
9.Decrease in the assets value (Current & Fixed).
10.Increase in the raw-material prices & other transportation expenses.
11.Competitive market- some times we have to sell our products less than the production cost, due to competition.
12.and many more.................
Liabilities, Sales revenue, Capital.
cash assets increase Equity increases as sales revenue increases and net income increases. No effect on Liabilities and Expenses
No, liabilities have a normal credit balance, that means that increases are also credit, and that decreases are debit. Please refer to the link provided for debit and credit rules.
Remember that in accounting, the Mother of All Equations is: Assets - Liabilities = Stockholders' Equity Anything that increases or decreases your assets or liabilities is going to cause your Stockholders' Equity to change as well.
I can think of nothing that will do that in one transaction. Revenue generally does not effect your liabilities. Revenue is an Owners Equity account and most transactions in revenue effect that, not liabilities. (there is one exception and it is explained later on.)Expenses decrease revenue, which in turn decreases retained earnings which effects owners equity.Dividends Paid decrease retained earnings, which in turns also effects owners equity.The only time any "revenue" has an effect on liabilities is if it is an "unearned" revenue. An unearned revenue is a liability, however, it "increases" your liabilities and increases your assets at the same time. Once the unearned revenue is "earned" it then increases your "revenue" and you decrease your liability.
In case of Assets debit is positive which means increase in assets as well as for liabilities debit means reduction in liabilities but for expenses it is negative as it increases the expenses and reduces the profit
Current Liabilities to Total Liabilities Ratio = Current Liabilities / Total Liabilities Current Liabilities to Total Liabilities Ratio = 7714 / 18187 Current Liabilities to Total Liabilities Ratio = 0.42 or 42%
liabilities can be classified as short term liabilities and long term liabilities
There is no way to increase Revenue and Liabilities in a single transaction. Another reason for this is the accounting equation.Assets = Liabilities + Owners EquityIn double entry accounting there must be a debit and a credit that equals. You want to "increase" liabilities and revenue with a single entry, this cannot be done because and increase in liabilities relies on a credit entry as does an increase in revenue.Assets maintain a Debit Balance, meaning they increase with a debit.Liabilities maintain a Credit Balance, meaning the increase with a credit.Owners Equity maintains a Credit Balance, increasing with credit.Revenue is an OWNERS EQUITY ACCOUNT and therefore increases with a credit.Say you desired to increase Liabilities $500 and Revenue $500 in a single entry, you couldn't because you'd need to "credit" liabilities $500 and "credit" revenue $500, but you MUST have a "debit" that equals the same amount of credits.
current liabilities and long term liabilities
Liabilities Liabilities
Liabilities