Financial Statements

A financial statement is a record of the financial activities of a person or business entity where all related financial information are presented in an orderly manner and can be easily understood.

8,445 Questions
Business Accounting and Bookkeeping
Budgeting and Forecasting
Financial Statements

What is a Consolidated statement of cash flows?

Consolidated cash flow statement shows the cash inflows and outflows of parent company together with all subsidiaries of that parent company at one place to show the complete picture of business.

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Economics
Business Accounting and Bookkeeping
Accounts Receivable
Financial Statements

What are the 4 functions of accounting?

  1. For money
  2. For peace and order
  3. For nice environment
  4. For Good Will

Sorry to say but the above answer is completely misleading and incorrect. The major functions of accounting are

1. recording business transaction

2. Classifying and summarizing business transactions in a meaningful manner

3. Analysing and interpreting data in order to retrieve meaningful information.

4. Communicating the information to the relevant stakeholders

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Marketing Advertising and Sales
Financial Statements

What comes first in the four financial statements?

its the income statement don't know why???

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Business Accounting and Bookkeeping
Mathematical Finance
Accounts Payable
Financial Statements

What are two basic financial statements.Explain their importance to the various uses?

The two basic financial statements are the Income Statement or Profit & Loss Statement and the Balance Sheet. The Income Statement reflects the revenues and expenses for a period in time such as January 1, 20xx through the date you are working on say August 31, 20xx. These revenues and expenses give you the net income or (loss) for that particular period.

The Balance Sheet is a report of the business for a point in time, August 31, 20xx. The assets and liabilities of the business as well as the owners equity in the business make up the Balance Sheet. Assets - Liabilities = Owners Equity. The net income or (loss) from the Income Statement flows over to the Balance Sheet under the Equity section.

Business use these reports to understand the financial position of their business ans where to make changes for future years. Investors use these reports to make decisions on whether they want to invest or provide loans to the business. Accountants use these reports to prepare tax returns for both individuals and businesses depending on the type of entity the are...corporation, partnership, sole proprietorship.

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Business Accounting and Bookkeeping
Financial Statements

Why do managers analyze Financial Statements?

All publicly traded companies and large private entities prepare financial statements periodically. The purpose of creating financial statements is to capture a company's financial position for a given period. This allows users of financial information to analyze and compare the health of one company to another. Financial statements provide assessment of a company's profitability, liquidity and operational efficiency. As a result, there are a number of reasons why managers analyze financial statements.

And in my own words, all managers should know the P/L of a period of time, to help understand the needs of their business, the profit or loss and it's effects upon the business ( it may be on a permanent loss therefor it should make the necessary improvements/cuts) . Most managers wish in general to see where they stand with, if the business is profitable, if they need to stop taking some risks, or make new investments, or maybe let go some employees.

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Business Accounting and Bookkeeping
Learning Theories
Financial Statements

What does fully funded depreciation mean?

This is the amount saved to replace assets at the end of their useful life. [1]

[1] The Financial Management of Hospital and Healthcare Organizations. Michael Nowicki (2008)

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Business Accounting and Bookkeeping
Soccer History
Financial Statements

How do you make a trial balance from T Accounts?

You would add up both columns on the T account and put the highest figure as the total for BOTH columns. Then in the column which was less you add a balancing figure call Balance Carried Forward to make that column match the other.

Below the totals you would put Balance Brought Foward which is the same as the balance carried forward but it should go on the other side.

You then list all the Balance Brought Fowards figures, keeping them in their debit or credit side. That list becomes the trial balance.

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Business Accounting and Bookkeeping
Financial Statements

What do you mean by gaap?

GAAP is an acronym for Generally Accepted Accounting Principles

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Business & Finance
Business Accounting and Bookkeeping
Financial Statements

What effect does unearned revenue have on cash flow statement?

if you mean unearned as in money you have received and not worked for it would go in cash made from operating activities

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Commercial Bank and Checking Accounts
Financial Statements

What are objectives of using Tally?

Physical Characteristics

There are three types of pangolin -the giant pangolin, the tree pangolin and the most common, the ground pangolin. Pangolins have small heads and broad tails. They have no teeth and external ears, although their hearing is good. Their sense of scent is well-developed, but their sight is bad. The weight of the protective scales and skin make up about 20% of the pangolin's total weight. The animal protects itself by scratching with the hind legs and lifting its scales so the claws can reach the skin. It also uses its tongue to remove insects from under the scales.

Diet

Pangolins use their sense of smell to locate termite and ant nests. They dig the insects from mounds or holes with their claws and use their extremely long tongues to eat them. In a resting position the tongue is pulled back into a sheath that retracts into the chest area.

Behaviour

Pangolins are nocturnal so they remain in their burrows during the day. All pangolins are able to roll themselves into a ball to defend themselves, and it takes a lot force to unroll them. The cutting action of their armor-plated scales, worked by powerful muscles, protects them too, by inflicting serious wounds on anything inserted between them.

Pangolins normally live by themselves. Females are usually alone with their young, but occasionally are accompanied in their burrow by a male pangolin. At this time the infant begins to accompany the mother, riding on the base of her tail. If the mother senses danger the baby slips under her and is protected by her when she rolls up her body into a ball.

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Business Accounting and Bookkeeping
Financial Statements

The carrying value of a depreciable asset equals?

The carrying value (or book, or, net value) of a long term asset equals cost minus accumulated depreciation.

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Home Equity and Refinancing
Business Accounting and Bookkeeping
Financial Statements

What are the basics of cash flow management?

Cash Flow ManagementThis is advice on cash flow management from the Federal Consumer Information Center and the Small Business Administration:

Failure to properly manage cash flow is one of the leading causes of small business failures. Understanding the basics will help you with your cash flow management.

Your business's monetary supply can exist either as cash on hand or in a business checking account available to meet expenses. A sufficient cash flow covers your business by meeting obligations (i.e., paying bills), serving as a cushion in case of emergencies, and providing investment capital.

The operating cycle is the system through which cash flows, from the purchase of inventory through the collection of accounts receivable. It measures the flow of assets into cash.

For example, your operating cycle may begin with both cash and inventory on hand. Typically, additional inventory is purchased on account to guarantee that you will not deplete your stock as sales are made. Your sales will consist of cash sales and accounts receivable credit sales, usually paid 30 days after the original purchase date. This applies to both the inventory you purchase and the products you sell. When you make payment for inventory, both cash and accounts payable are reduced. Thirty days after the sale of your inventory, receivables are usually collected, increasing your cash. Now your cash has completed its flow through the operating cycle, and the process is ready to begin again.

Cash and other balance-sheet items that convert into cash within 12 months are referred to as current assets. Typical current assets include cash, marketable securities, receivables and prepaid expenses.

Cash-flow analysis should show whether your daily operations generate enough cash to meet your obligations, and how major outflows of cash to pay your obligations relate to major inflows of cash from sales. As a result, you can tell if inflows and outflows from your operation combine to result in a positive cash flow or in a net drain. Any significant changes over time will also appear. Understanding this will lead to better control of your cash flow and will allow adequate time to plan and prepare for the growth of your business.

It is best to have enough cash on hand each month to pay the cash obligations of the following month. A monthly cash-flow projection helps to identify and eliminate deficiencies or surpluses in cash and to compare actual figures to past months. When cash-flow deficiencies are found, financial plans must be altered to provide more cash. When excess cash is revealed, it might indicate excessive borrowing or idle money that could be invested. The objective is to develop a plan that will provide a well-balanced cash flow.

Here are the basic ways that a business can increase cash reserves:

  • Actively manage accounts receivable and quickly collect overdue accounts. You stand to lose revenues if your collection policies are not aggressive. The longer your customer's balance remains unpaid, the less likely it is that you will receive full payment.
  • As credit and terms become more stringent, more customers must pay cash for their purchases, thereby increasing the cash on hand and reducing the bad-debt expense. While tightening credit is helpful in the short run, it may not be advantageous in the long run. Looser credit allows more customers the opportunity to purchase your products or services. You should measure, however, any consequent increase in sales against a possible increase in bad-debt expenses.
  • Loans from various financial institutions are often necessary for covering short-term cash-flow problems. Revolving credit lines and equity loans are types of credit used in this situation.
  • Increased sales would appear to increase cash flow. However, if large portions of your sales are made on credit, when sales increase, your accounts receivable increase, not your cash. Meanwhile, inventory is depleted and must be replaced. Because receivables usually will not be collected until 30 days after sales, a substantial increase in sales can quickly deplete your company's cash reserves.

Additional cash-flow techniques include the use of a bank lockbox to which all customer remittances can be sent. This allows your bank to directly deposit the funds into your account, shrinking the time it takes for the funds to show up in your bank balance.

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Business Accounting and Bookkeeping
Acronyms & Abbreviations
Financial Statements

What does the abbreviation cr mean in accounting?

CRedit

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Business Accounting and Bookkeeping
Financial Statements

What is subscription expense in accounting?

A subscription expense is a regular expenditure on a predetermined basis for a necessary business cost. For example, many auto repair shops lease repair information software that continually changes due to new vehicle rollouts...they don't purchase the software but subscribe to it on a monthly basis of XXX number of dollars...

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Banking
Business Accounting and Bookkeeping
Financial Statements

Why do banks need financial statements?

there are only use full togive finance and other a few

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Business & Finance
Business Accounting and Bookkeeping
Financial Statements
The Difference Between

What is the difference between a gross sale and a net sale?

Gross sales mean what you are charged as the overall total of your bill and net is all other deductions subtracted with what ever balance is left being your net.

Gross sales is defined to be the total invoice value of sales, before deducting customers' discounts, returns, or allowances.

Net Sales The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any discounts allowed. The sales number reported on a company's financial statements is a net sales number, reflecting these deductions.

More information from our contributors:

  • For easier understanding, gross sales is what is accounted for as sales and net sales is what is received on account of the transaction.
Taxes; gross sale indicate total amount received before any applicable tax is taken out. Net sale is the total of gross sale minus taxes, before tax payments, royalties, etc. You pay your income tax based on gross.
  • The difference between gross sales and net sales can come from two sources.
1. Sales returns

2. Customer discounts or allowances

In accounting, the difference between gross sales and net sales can be made up of more than one factor. Gross sales revenues is all the sales revenues that have been earned by a firm during a given time period. The items that are netted out of, or deducted from, gross sales in order to arrive at net sales can be different in different industries. For example, in the book publishing industry the two items mentioned above would be deducted from gross sales to get to net sales. In the magazine publishing industry, there would be an additional deduction for advertising agency commissions.

In general, however, "gross sales" reduced by the sum of :[(1) the dollar amount of refunds for items bought and then returned by customers and (2) the dollar amount of purchase discounts taken by customers] equals "net sales".

  • Gross sale is the sale that needs some amount to be deducted from it. And net amount is final sale that is in actual figure after deducting all other things like allowances etc.
  • I might suggest that an example would help. e.g. if you sell your house for £300,000, that would be your gross sale. But if you then deduct the cost of selling it (like estate agents fees) of say £30,000 then you get £270,000 which would be your net sale.
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Business Accounting and Bookkeeping
Financial Statements

Is return outward in less cost of goods sold?

Yes, they would reduce the amount if purchases which is also in Cost of Goods Sold.

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Financial Statements
Accountants

What are share application monies?

Share application monies are the cash received by an enterprise issuing shares by people who are interest to become share holders of that enterprise.

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Financial Statements
Math and Arithmetic

Convert 5 feet 6 inches into inches squared?

convert 5 feet 6 inches into inches

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Intellectual Property
Business Accounting and Bookkeeping
Financial Statements

Is trademark an intangible asset?

Generally speaking it could be considered so.

There are cases, however, where it could have significant impact if the trademark is a very famous one and could be sold or traded as a separate asset.

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Agriculture
Farm Animals
Financial Statements

Livestock in the case of mixed farming is?

A variable asset/liability and a commodity.

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Business Accounting and Bookkeeping
Business Finance
Financial Statements

How does a company have income but take in less cash that it spends?

Income is all the money a company takes in (hence the name)

expense is all the money a company spends

profit is income - expense.

just because expense > income doesn't mean there is no income. It means there is no profit.

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Financial Statements

What is a trading profit and loss account?

That is known as the income statement or can by IAS1 it's known as the statement of comprehensive income.

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Financial Statements
Economics
Business Accounting and Bookkeeping

What are some examples of fixed costs?

* Rent * Payroll for Salaried Employees

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Financial Statements

Is a cash register an asset or an expense?

Yes

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