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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.

500 Questions

What company leads production of sheets and pillowcases?

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Asked by EncyofUSIndustries

One of the leading companies in the production of sheets and pillowcases is Westpoint Stevens, a US-based textile manufacturer that specializes in home fashion products. Westpoint Stevens produces a variety of brands, such as Martex, Grand Patrician, Utica, Lady Pepperell, and Vellux. The company has a history of over 200 years and operates several manufacturing facilities across the US.

Saving money for a purchase and letting the interest work for you rather against you is called?

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Asked by Wiki User

Saving money for a purchase and allowing the interest to accrue in your favor is known as "earning compound interest." This strategy involves reinvesting the interest earned, leading to exponential growth over time. By harnessing the power of compounding, individuals can maximize their savings and enhance their financial well-being.

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What is benefits of centralized function?

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Asked by Wiki User

Centralized function is very important for any org. Which is decentralized in physically but not in practically means one unit in several parts

Internal audit and external audit?

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Asked by Wiki User

Internal Audit:

Their main gig is to assess and improve the effectiveness of risk management, control, and governance processes within the organization. Internal audits can cover a broad spectrum, including financial controls, operational processes, and compliance with company policies. Their goal is to provide constructive feedback to management, helping the organization operate more efficiently and mitigate risks.

External Audit:

Now, external audits are a bit like the annual check-up from your financial doctors. These auditors come from independent firms and scrutinize your financial statements, making sure they present a true and fair view of the company's financial position. External audits are often required by regulatory bodies and provide assurance to stakeholders, like investors and creditors, that the financial information they rely on is reliable.

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Is net income a cumulative amount?

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Asked by Wiki User

"Net income" refers to income earned during a single accounting period (for example, a single year) only.

Positive net income for a particular accounting period increases Retained Earnings, which is a cumulative amount that includes (among other things) all cumulative earnings and losses from the date of the firm's inception. A net loss for any given accounting period decreases Retained Earnings.

Construct a sources and uses of cash statement?

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Asked by Wiki User

To determine the annual payment acceptable to the Wildcat Oil Company (Wina), we need to compare the lease and buying options and calculate the financial implications.

  1. Leasing Option: The system cost is $8.9 million, and the lease period is five years. At the end of the lease, there will be an after-tax residual value of $1,880,000. The tax rate is 24%, and the firm can borrow at 6%.

To calculate the annual payment, we need to find the present value of all cash flows associated with the lease: PV = Lease cost + Present value of the residual value

The lease cost is the present value of an annuity due: Lease cost = PMT * (1 - (1 + r)^(-n))/r Where PMT is the annual payment, r is the discount rate, and n is the number of periods.

The present value of the residual value can be calculated as: PV (residual value) = Residual value / (1 + r)^n

  1. Buying Option: If the company decides to buy the system instead of leasing, it needs to consider the tax savings from depreciation: Tax savings = Depreciation expense * Tax rate

The depreciation expense per year is calculated as: Depreciation expense = System cost / Lease period

The tax savings will reduce the after-tax cost of owning the system.

To calculate the after-tax cost of owning the system, we need to discount the system cost and the tax savings: PV (system cost) = System cost - Tax savings * (1 - 1 / (1 + r)^n) / r

Finally, we compare the present value costs of the lease and buying options to find the annual payment acceptable to Wina.

Please note that some values were not provided in the question, such as the rate to calculate depreciation or the residual value at the end of the lease. If you could provide those values, I would be able to give you a more accurate answer.

The revaluation surplus included in equity in respect of an item of property plant and equipment may be transferred directly to retained earnings when the asset is derecognisedWhy?

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Asked by Wiki User

The revaluation surplus is a component of equity that arises when a property, plant, or equipment item is revalued to its fair value. When the asset is derecognized, the revaluation surplus can be transferred directly to retained earnings to avoid its accumulation in equity. This transfer ensures that any unrealized gains or losses from revaluations are recognized in the income statement and not carried forward in the balance sheet.

Which journal entry records payment for supplies?

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Asked by Wiki User

The journal entry to record payment for supplies would involve crediting the cash account and debiting the supplies expense account.

What is liquidity cash flow?

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Asked by Wiki User

Liquidity cash flow refers to the ability of a company to generate enough cash to meet its short-term obligations. It represents the movement of cash in and out of a company, including cash from operations, investing activities, and financing activities. Having positive liquidity cash flow is important for a company to ensure it can cover its immediate expenses and maintain financial stability.

How do you calculate net loss?

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Asked by Wiki User

To calculate net loss, subtract total expenses from total revenue. Net loss occurs when expenses exceed revenue, resulting in a negative value. The formula for net loss is: Net Loss = Total Revenue - Total Expenses.

What is generally a merchandiser's major cost?

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Asked by Wiki User

Generally, a merchandiser's major cost is the cost of purchasing inventory or products from suppliers. This cost includes the purchase price of the products, any shipping or transportation fees, and any additional costs associated with bringing the products into the store or warehouse. Other costs may include marketing and advertising expenses, labor costs, and overhead costs.

Define corporate governance statement of compliance?

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Asked by Wiki User

A corporate governance statement of compliance refers to a document that provides an overview of a company's adherence to corporate governance principles, regulations, and standards. It outlines the company's commitment to good governance practices, including its compliance with applicable laws, ethical standards, and guidelines. This statement is typically included in the company's annual report or other public disclosures to inform stakeholders about its governance practices.

The book value of a plant asset is?

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Asked by Wiki User

The book value of a fixed asset (PP&E) is the difference between the fixed asset account and it's related accumulated depreciation account.

You have a truck you paid $25,000 and you have depreciated it for the amount of $10,000 then the "book value" would be $15,000.

What is the term 'discounted cash flow' in reference to?

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Asked by Wiki User

The term 'discounted cash flow' refers to a financial valuation method used to estimate the intrinsic value of an investment or business. It involves projecting the future cash flows generated by the investment and then discounting them back to their present value using an appropriate discount rate. The discounted cash flows are then summed up to determine the net present value (NPV) of the investment.

Why do you think some companies only report the financial health of the organization once a year while others report bi-annually or even quarterly?

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Asked by Wiki User

Companies choose to report their financial health with different frequencies based on several factors. Those reporting annually typically have less frequent performance fluctuations and may incur lower costs related to financial reporting. Companies opting to report bi-annually may have moderate to high performance fluctuations, but still prefer a longer reporting period to evaluate trends. Lastly, companies reporting quarterly usually have high performance fluctuations and may benefit from closer monitoring and communication with stakeholders, given the importance of up-to-date financial information. The frequency of reporting ultimately depends on the nature, size, and needs of the company.

Difference between carriage inward and freight inward?

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Asked by Wiki User

Carriage inward refers to the transportation costs incurred by a business when purchasing goods from suppliers. It is added to the cost of inventory and increases the cost of goods sold. Freight inward, on the other hand, refers to the cost of transporting the goods purchased from suppliers to the buyer's location. It is also added to the cost of inventory but is not included in the cost of goods sold.

Does telephone go on the income statement?

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Asked by Wiki User

No, telephone expenses do not go on the income statement. Telephone expenses would be recorded as an operating expense on the income statement under the category of "Communication expenses" or similar designation.

What are the accounting journal entries to write off stock?

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Asked by Wiki User

To write off stock in accounting, the journal entries would be to debit the inventory account and credit the expense account, such as "Inventory write-off" or "Loss on inventory write-off." Additionally, if applicable, debiting any allowance for obsolete or damaged inventory account and crediting the inventory account would be necessary. The total debit amount should equal the total credit amount in the journal entry.

What reported too small value in financial position if the company is trying to maximize its perceived value asset liabilities Retained earnings or contributed capital?

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Asked by Wiki User

If the company is trying to maximize its perceived value, it would report a too small value for its liabilities. This is because lower liabilities would indicate lower financial risk and could make the company more attractive to investors. By understating liabilities, the company may appear to have a stronger financial position, potentially leading to a higher perceived value.

Is Global Cash Flow Network a Scam?

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Asked by Wiki User

There is not enough information available to definitively determine if Global Cash Flow Network is a scam. It is always important to do thorough research, read reviews, and use your best judgement when evaluating any business opportunity.

What is the bookkeeping entry for a revenue reserve?

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Asked by Wiki User

The bookkeeping entry for a revenue reserve is a debit to the retained earnings account and a credit to the revenue reserve account. This entry is made to set aside a portion of the profits as reserves for future use or to cover potential losses. By separating the revenue reserve from retained earnings, it allows for better tracking and management of the reserve funds.

What is the AJE to release temporarily restricted net assets?

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Asked by Wiki User

The AJE (Adjusting Journal Entry) to release temporarily restricted net assets involves debiting the temporarily restricted net assets account and crediting the unrestricted net assets account. This adjustment is made when the restriction on the funds has been met, allowing them to be used for general operations or other unrestricted purposes.

How does depreciation expense on the income statement relate to accumulated depreciation on the balance sheet?

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Asked by Wiki User

Depreciation expense on the income statement represents the portion of the asset's cost that is allocated as an expense during the reporting period. Accumulated depreciation on the balance sheet is a contra-asset account that reduces the asset's original cost by the total amount of depreciation expense recognized over its useful life. Thus, depreciation expense increases the accumulated depreciation balance on the balance sheet.

What are the Important adjustment entries in a profit and loss account?

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Asked by Wiki User

Some important adjustment entries in a profit and loss account include depreciation expense, accruals, prepayments, provisions for doubtful debts, and deferred revenue. These entries help to accurately match expenses and revenues in the accounting period they relate to, ensuring the financial statements present a true and fair view of the company's financial performance.

Where does advertising expense go on a income statemnet?

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Asked by Wiki User

Advertising expense typically appears as a separate line item under the "Selling, General, and Administrative Expenses" (SG&A) section on an income statement. It represents the costs incurred by a company to promote its products or services to customers. The specific placement may vary slightly depending on the accounting practices followed by the company.