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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
Where do customer advances go on the balance sheet?
I am not sure what you are referring to, but in the words "customer advances" I will assume you are referring to a person or company providing a service or product to the customer with expectations of payment at a later date.
If this is the case, then the recording of this would be seen in Accounts Receivable or Notes Receivable (depending on the amount of time the customer is given to pay the amount).
If not paid out in the period when the Balance Sheet is prepared such advances are listed under assets using the same account (Accounts or Notes Receivable)
Please Note, if they are paid off, then the balance is removed from Accounts/Notes Payable and recorded into Revenue (Income) which is not on the Balance Sheet.
The entry closing the Expense and Revenue Summary is a?
The entry closing the Expense and Revenue Summary is a?
How do you make accounting entry for loan?
Received loan from family members after 3 years family said they don't want their loan back how do i bass my entry in the books of the accounts
If you are asking if it is possible then yes it is. Or more probably the directors.
Account names are written in the general journal exactly as they appear in the chart of accounts?
yes
Qualitative characteristics associated with reliable accounting information are?
Relevance, comparability and understandability.
Are stock splits on statement of cash flows?
Stock splits are not part of cash flow statement as due to stock split no cash inflow or outflow occurs.
Can the cash generating process for a firm be continuous even though cash flow can be sporadic?
Yes. Rentals of skis is an example.
Does taxes paid go on a balance sheet?
Taxes paid is part of cash book or cash flow statement and tax expense in income statement and tax payable is balance sheet item.
Where are operating leases recorded in financial statements?
Operating lease is that kind of lease which is not done for entire useful life of assets and only lease rental are paid and expensed through income statement.
What is the difference between an internal and an external audit report?
Internal audit report is generated by internal audit department of business which mainly focuses on all operations and effectiveness and effeciancy of operations while external audit report is generated by external auditors which has only one point agenda to determine that books of accounts presents the true and fair nature of business transactions.
Why does a balance sheet balance please answer from the view of a layman?
In your trial balance every debit has equal credit which in simple terms means every transaction we do affects two a/cs for eg.when we purchase something cash reduces and goods increase likewise in all transaction something or the other increases reducing other balance sheet is like your two pockets which tally at the end of the day.things bought equals to cash reduce.A layman should always consider it as his position at the end of the day.
Is depreciation schedule required to be disclosed in the notes to financial statements?
Yes depreciation schedule is required to disclose for the better understanding for the reader of the books of accounts.
cash at bank dr account opayable cr
How do you calculate unrestricted net assets?
Unrestricted net assets are accumulated assets that are not designated or restricted. This is a calculation which only pertains to not profit organizations. The calculation is a simple summation of the journal entry.
Do withdrawls go on income statement?
owners withdrawal are not part of income statement as neither it is income or expense of business rather it is reduction of owner capital from business that’s why it is shown under liability side as a reduction of owner capital in balance sheet.
Why is depreciation charged on fixed assets?
When we use asset in business due to general usage it bears some wear and tear. Eventually it will be completely destroyed or it will complete its useful life (e.g. due to technology improvements). So rather than write the asset off from the balance sheet in the final year we divide the cost of the asset by the number of years in which we expect to use it (to find the annual depreciation charge) and allocate the charge to all years in which we use the asset. This process is called depreciation.
We use depreciation because the asset is used for earning income. That's why the average value of the asset should be allocated to all those years in which it is used. If we don't distribute the cost to all years then profit will be higher than it really was and when in the last year of asset the asset is written off we would get less profit than was actually earned. This is not in accordance with accounting principles.
Also to reflect the expenses that went into production to produce the end result.
A piece of asset is bought and are broken down into segments as if each is a stand alone unit that contributed to your end result. Depreciate. Think of it as regular business expense that don't get used up in one go.
Following are the formats of income statements
1 – Statement form
2 – Account form
Formula for average rate of return?
Average rate of return=Average profit /Initial investment*100%
or
ARR=Average profit /Average investment*100%
or
ARR=Total profit /Initial Investment*100%
What would you find on a profit and loss account?
In profit and loss account normally list all in the revenues and expenses and profit or loss for any particular fiscal year of company.
Does an increase in accrued expenses increase cash flow?
Yes, Expenses done while payment not made is a reason for increase in cash flows because if cash is paid then there would be a reduction in cash while deferred it to future time has actually increase the cash flow for the time being.
What is a preparation of consolidated balance sheet?
Where any company acquire morethen 50 % shares in any other company then that company becomes the parent and other becomes subsidiary and it is legal requirement that parent company should prepare the consolidated financial statements for it;s own and all subsidiary companies as a one single document to show the complete picture of company workings
