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EXCESS OF REVENUE OVER EXPENSES
EXCESS OF REVENUE OVER EXPENSES in the not-for-profit sector. There is a common misconception that not-for-profit organizations are not allowed to have a financial cushion as they are 'not-for-profit'. In this context it is useful to remember that not-for-profit organizations are also 'not-for-loss' organizations. An organization cannot sustain losses over the long term without ceasing to operate or going bankrupt. Excess of revenue over expenses is the planned financial position that there will always be a sufficient amount of funds on hand to continue to run the not-for-profit entity for some period without additional funding; usually 3-4 months.
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the excess of revenue over the expenses incurred in earning the revenue is called capital?
False
What is the excess of revenue over expenses?
The excess of revenue over expenses, often referred to as net income or profit, is the amount that remains after all expenses have been deducted from total revenue. It indicates the financial performance of an organization during a specific period, showing whether it has generated a surplus or deficit. A positive excess signifies profitability, while a negative excess indicates a loss. This measure is crucial for assessing the sustainability and growth potential of a business or organization.
Expenses incurred while earning revenue should be reported in the same period that the income is reported?
matching principle
What is the Journal entrey for cost in excess of billing?
A journal entry for cost in excess of billing typically involves debiting a "Cost in Excess of Billing" account (an asset account) and crediting a corresponding "Revenue" or "Construction Revenue" account. This entry reflects the situation where expenses incurred on a project exceed the amount billed to the client, indicating that the company has incurred costs that will be recognized as revenue in the future. The entry ensures that financial statements accurately represent the company's assets and revenue recognition principles.
How is a gross margin calculated?
the excess of the net sales revenue over the cost of goods sold.
the excess of revenue over the expenses incurred in earning the revenue is called capital?
False
What is life assurance fund?
It is the excess revenue income over revenue expenditure for an insurance company.
What is net Interest?
Net Interest refers to the revenue that is got from the difference between cost of servicing liabilities and the revenue generated by assets that bear interest. This considered to be an excess revenue.
What is the excess of revenue over expenses?
The excess of revenue over expenses, often referred to as net income or profit, is the amount that remains after all expenses have been deducted from total revenue. It indicates the financial performance of an organization during a specific period, showing whether it has generated a surplus or deficit. A positive excess signifies profitability, while a negative excess indicates a loss. This measure is crucial for assessing the sustainability and growth potential of a business or organization.
Expenses incurred while earning revenue should be reported in the same period that the income is reported?
matching principle
What is the Journal entrey for cost in excess of billing?
A journal entry for cost in excess of billing typically involves debiting a "Cost in Excess of Billing" account (an asset account) and crediting a corresponding "Revenue" or "Construction Revenue" account. This entry reflects the situation where expenses incurred on a project exceed the amount billed to the client, indicating that the company has incurred costs that will be recognized as revenue in the future. The entry ensures that financial statements accurately represent the company's assets and revenue recognition principles.
How is a gross margin calculated?
the excess of the net sales revenue over the cost of goods sold.
What must a nonprofit do with its excess revenue?
A nonprofit must reinvest its excess revenue back into its mission and programs to further its charitable goals. This can include expanding existing services, launching new initiatives, or improving operational capacity. Nonprofits are prohibited from distributing excess revenue as profits to individuals or shareholders, ensuring that resources are used to benefit the community they serve. Additionally, maintaining a reserve for future needs or unforeseen circumstances is also a prudent practice.
What is the Difference between fiscal deficit and revenue surplus?
Budget for a fiscal year is a statement of revenue and expenditure of the government for the particular year. If the expenditure is more than the revenue for a particular year, then this difference is called the fiscal deficit. If the revenue is more than the expenditure for a particular year then this difference is called the excess revenue.
What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?
Gross Profit
What is the cost in excess of billing in long term construction contracts?
Cost in Excess of Billing is an Asset Account that means the contract is under-billed. Actual billings are less than Revenue Earned.
What is a profit of 12 dollars?
An excess of total revenue over total costs amounting to 12 dollars.
