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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.
5,583 Questions
Is accrual accounting better than cash accounting?
Cash accounting is simple and easy but accrual accounting is recommended as it's uses the matching concepts according to which revenues of same fiscal year are matched with expenses and more accurate method.
PAT means profit after tax amount in income statement which means that profit is adjusted for payment of tax.
Time period assumption states?
The time period assumption divides the economic life of a business into specific intervals that are used in reporting. see also: going concern assumption
Does Comprehensive income always net out as an addition to net income?
Not Necessarily! As you know Comprehensive Income is Net Income + Accumulated Other Comprehensive Income. AOCI does not have to be a positive number, therefore, Comprehencive Income may be less than Net Income. Joe Diamond 847-884-8500.
What is journal entry to sell assets?
Debit accumulated depreciation
debit cash / bank
Credit fixed asset
If you get 20,000.00 cas for inventory and get 20,000.00 in inventory what T accounts are affected
What are examples why cash flow from operations is lower than net profit?
The term 'Cash Flow from Operations' can have various meanings. It is one thing if you are talking about a GAAP (Generally Accepted Accounting Principles) prepared Statement of Cashflows. It is another thing if you are talking about projected cash flow from operations available for an owner to take home as personal income.
If you are looking for 'net' cashflow from operations (after debt is paid), it will be less than net profit when the reduction for debt payments is greater than add-backs for non-cash items such as depreciation and amortization, and the add-back for interest (which is part of the debt payment).
If you are considering GAAP Statement of Cashflows, the cash flow from operations is impacted by changes in working capital as well as the profitable (or not) operations of the company. For example, a major collection on accounts receivable will add to cash flow, but will not increase net profit for that period.
How is residual operating income calculated?
Residual Operating Income (ReOI) is a method of valuing a firm's operations. The formula below can be used on historical data to identify and analyse historical trends, but lenders (as well as any other interested parties) can also use forecasted figures to predict the future value of the firm, to (e.g.) help in their lending decisions. ReOI for a trading entity = Total Sales x [Core Sales Profit Margin - (Required Return / ATO)] + Other OI +UI Where: Core Sales Profit Margin = Net Operating Profit after tax / Total Sales Required Return is the rate demanded by the investor, given the level of risk in the business ATO = Asset Turnover = Total Sales / NOA NOA = Net Operating Assets = Accts Receivable + Inventory + PP&E Other OI = Includes income derived by a parent entity from its subsidiaries UI = Unusual Income - e.g. if the restructuring of a firm impacts on its operating income (not common)
Why it is impossible for a balance sheet to be out of balance and to be incorrect?
the balance sheet must tally at the end. Other wise it is shown what ever the information give might be wrong or. Calculation is wrong.
Revenue 12000000
Less:
Expenses @ 75% of revenue 9000000
Depreciation 1500000
Net Income 1500000
What is the relationship between financial services and overall financial planning?
GEHY!!!!!!!!!!!!!!!!
A sales invoice is used as documentation for a journal entry that requires a?
debit to Accounts Receivable and a credit to Sales Revenue.
Why debtors and prepaid expenses are not treated as intangible assets?
Both those items are tangible assets. Intangible assets are those that are either not physical or very difficult to estimate a value for.
So goodwill and R&D are the most common types of intangible assets. Goodwill is very difficult to estimate, and R&D maybe research based and knowledge based so nothing physical exists.
While you could argue that debtors owing you money is intangle as you may never be in possession of physical money from them, it is easy to measure how much they owe.
How is it possible to have a net income and not have an increase in cash?
Examples
When a company sells products/services on account, a sale is recognized at the time of delivery. At this point, net income increases but there is not (yet) cash received.
When a trading company pays for merchandise, cash is spent, but the matching principle will treat this cash outflow as an asset. The merchandise is to be sold at a future profit, so it is considered to have value. Hence, cash has been paid, but no expenses were booked.
Another example would be investments. If a company spends cash on a new machine, the machine is treated as an asset (resulting in future depreciation), but cash is reduced.
One more example is repayment of a loan. Loan payments consist of a principal portion and an interest portion. Only the interest portion is considered an expense (for calculation of net income), but the entire amount that you paid will affect cash flow.
Explain quarterly forecasting updating revenue and expense models?
Quarterly forecasting is basically an analysis of revenue and expenses to be earned or incurred in future. Revenues are best estimated with respect to product / service demand in the market. If an expert says that revenue will boom, that means profit will increase... so appropriately expenses will be more related to income...... this concept should alwaz be kept in mind in forecasting..... And also past % is to be seen and and those percents should be a point of forecasting also........
Thanks.
Accounting journal entry for sales promotion?
[Debit] Sales Promotion expenses xxxx
[Credit] Cash / bank / goods etc xxxx
How is CM ratio useful in planning business operations?
The contribution margin ratio is the percentage of a company's contribution margin to its net sales
What is total CL and provisions in balance sheet?
CL means current liability. Those liability, already incurred, which are payable within a year are included in current liability. Normally short term bank loans, short term loans from others, trade creditors fall under this category. Provisions represent amount of legal liability but not payable on the date of balance sheet. For example, assume, the weekly wages for the last week of the financial year. These are payable on the end of the week. If balance sheet is prepared on the fifth day of the week, legally five days are wages are liability, but not payable.
What is a bank reconciliation template used for?
A bank reconciliation template allows the user to reconcile a bank statement with current checking account records. Its especially useful if you find yourself spending lots of time every month reconciling your bank statement.
How do you pass general entry of preliminary expenses if it paid with Rs 20000?
[Debit] Preliminary expenses 20000
[Credit] Cash account 20000
What are annual expenditures when figuring your financial statements?
no expenditures in financial statment-chacko
What are some of the financial statements that would be needed for management decision-making?
:: Balace sheet: document which show the financial positon of a company on a specific date. :: Income statement: Show if company is in operation or not, it also show the income (profit or lose) of the company. :: cash flow statement: show the cash inflow and out flow of a company form operating, financing and investing activities. :: owner equity statement: show increase or decrease in the owner equity position, it also show the claim of owners on the assets of the company.
