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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
Are the proceeds from the sale of a building included in net income?
No proceeds from sale of building is part of cash flow statement while profit or loss on sales of building is part of net income in accrual base accounting while cash base accounting it is part of net income or loss.
What is the effect on total assets of the purchase of land for cash?
An increase in Land and a decrease in cash, total effect is zero.
How you record accounts payable settlement in journal entry?
debit accounts payable
Credit cash / bank
Can you consider notes to financial statement to be a financial statement?
Notes to financial statement can be considered to be a financial statement since they report the details and additional information that are left out.
What is ratio analysis and importance of ratio analysis in financial management?
what is ratio analysis
What is conservative accounting philosophy?
Mattessich, R.:
What is conservative accounting philosophy? Prerequisite: What is "conservative accounting? It is the practice of recording and presenting financial statements based on cautious principles such as "acquisition cost or market value whichever is lower" (instead of the presently favored "fair value", frequently based on the subjective overvaluation of assets or undervaluation of debts) and "recognizing profits only after realizing sales", etc. If "philosophy" is meant in the professional sense (i.e., not merely as an "attitude"), one comes to the following conclusion:
A "conservative accounting philosophy" is an ontology and epistemology that tries to justify conservative accounting by taking into consideration: (1) the volatility of values(in general, but particularly, of assets, equities, etc.), and (2) that these values should be represented in a "prudent" and objective rather than an "optimistic" and subjective way..
A financial value is not a property of something but a three-way relation between some (i) person(s), (ii) an object, and (iii) changeable circumstances. This implies a potential for sudden or unexpected fluctuations in value such that its representation at one moment of time may no longer correspond to the reality at another moment. This creates a dilemma. On one side, accounting and financial statements are supposed to represent "reality", on the other side, this reality is in constant flux. Hence, neither a "conservative" value nor a "fair" value satisfies the ontological quest posed by a realist ontology. One solution to this problem would be to supplement accounting values of the financial statements with some kind of error estimates (e.g., its standard deviation), or to use a "multiple value approach." Proposals of this kind have been made in the literature (e.g., in Mattessich's Accounting and Analytical Methods, 1964: 220-231) but have not been seriously considered by practitioners. However, as far as share values are concerned, financial practice often attributes a risk factor to each share price. The traditional solution to this dilemma is to accept for accounting the general principle of conservativism (according to which it is preferable to err on the cautious than optimistic side). This principle has been the pivot of accounting practice (even of most of its theories) until the last decade of the twentieth century when empirical and positive accounting theories were instrumental in promoting "fair values". But some experts may argue that this resulted in occasional overvaluations in the stock market with billions of dollars in losses to the public. Typical overvaluations as occurred in a series of financial scandals, such as ENRON, WorldCom, Parmalat, etc. -- and more recently in the "sup-prime mortgage scandal". However, a conservative accounting philosophy has its own disadvantages. For example, it can lead to enormous discrepancies between (unrealistically low) accounting book values and (much higher) share prices in the market. Thus, neither a philosophy of conservative nor one of aggressive accounting seems to be desirable. What is needed is a philosophy that, on one side, emphasizes the fundamental dilemma of accounting representation and, on the other side, tries to sail safely through the Skylla of conservative and the Caryptis of aggressive accounting practice by indicating when to use one and when to use the other.
How do you calculate the accounting rate of return please can you give specific examples?
ARR isalso known as average rate of return it measures the overall profitability of an investment it has four steps to calculate 1-caculate all cash in flow 2-subtract initial investment 3-divide the figure by life span of the investment 4-calculate what percentage is this of the initial investment by using average annual profit/initial investment x100
Is visiting card a marketing expenses or Administrative expenses?
administrative expenses are expenses that is used in an office while marketing expenses are expenses that used in marketing,advertising, promotion etc.,
so therefore,visiting card or also known as calling card maybe classified as marketing expense because we are using a visiting/calling card not only to market/promote once product but also to introduce a firm/company itself.
Why employees were not record on balance sheet asset side?
The main reason is that they would be classified as intangible assets.
Intangible assets should only be included on the balance sheet when the costs are easily measurable. It would be very difficult to measure an employees value to a company. Also under ISA 38, internally generated goodwill is not allowable.
Why should depreciation be treated as expense?
Depreciation is a portion of fixed asset charged to income statement due to wear and tear of assets during use in business in fiscal year that's why that wear and tear is accounted for by using depreciation.
Is a valuation account an asset or liability?
The conceptual framework considers asset valuation accounts to be part of the related asset account. They are not considered to be assets or liabilities in their own right.
Non current liabilities report on which section of a balance sheet?
Hi,
Non current Liabilities is under the section of Liabilities Section, thus, it has to be reported under Liabilities of the balance sheet.
ASSETS
cash and cash equivalents xxxx
trade receivables xxxxx
xxxxx xxxxxx
LIABILITIES and SHAREHOLDER'S EQUITY
Current Liabilities:
xxxxx xxx
xxxxx xxx
Total Current Liab. xxxx
Non-Current Liablilities:
xxxxx xxx
xxxxx xxx
Total Non-Current Liab. xxxx
LIABILITIES xxxxx
Interest payable effect on Cash flow statement?
interest payable will increase the cash as if actually cash paid then it will reduce the cash but delayed in cash payment increase the cash for other purposes.
short term debt
Does an increase in cash go on the cash flow statement?
Yes all increase or decrease in cash goes to cash flow statement and are part of it.
How do you calculate new provision for doubtful debts?
In the P and L A/C calculate the percentage mentioned for provision for doubtful debts on sundry debtors and write the amount. This will be your new provision
A copie is retained by the supply, one to PBO, one to the soldier, one to finance.
Share is treated as liability. It is not treated as asset.
shares is called as share capital. capital is entered in the liabilities side of the balance sheet.
What is kpmg business strategy?
Effective Information Technology (IT) Strategy and Governance can help organizations ensure that their information systems deliver value: that the unique risks inherent in technology are managed through appropriate corporate governance; and that technology is used to support them in meeting their compliance requirements. KPMG's advisers help business to define, plan and implement integrated IT based around technological architecturen for the enterprise, which aims at best supporting the business strategy. Using a modular, business-oriented methodology and set of tools, KPMG helps business to transform its existing information management environment to achieve the desired business vision through a realistic and feasible information strategy plan.
A diagnostic audit is typically an audit done on certain medical examinations. For example, mammograms are diagnostic, therefore a diagnostic audit would include mammograms.
What is the difference between group financial statements and company financial statements?
group is multiple you see.
EDIT: Often an organisation will release both a group statement and a company statement. Group refers to the company in question and all its subsidiary holdings. This is because users of financial statements might want to know how the companies "core" operations are going as opposed to looking at the group statement which could have profits boosted by a different operation etc.
Edit2:
There is only a difference between the two statements for firms that hold shares in subsidiaries.
A subsidiary is a company that the parent company has control over, usually (but not necessarily) when the parents holds more than 50% of the shares.
In the company statements a financial interest in a subsidiary is shown as a line item ('subsidiaries') on the balance sheet. Depending on the valuation method used, dividends received or a profit share can be included in the income statement. (depending whether the cost method or equity method is used)
In the group financial statement (also called consolidated financial statement) the item subsidiaries is no longer included. Instead, the underlying assets and liabilities of the subsidiaries are shown. Similarly for the income statement, the subsidiaries expenses and revenues are included.
The group statements are usually informative, while the company statements provide little information. For example, the balance sheet of a listed company which is a holding company will have subsidiaries as its main asset (hence a single item as its assets). The consolidated balance sheet will show the actual assets (PPE, inventories, cash, etc) of the various subsidiaries. (Same principle for income statement).
List of the accounts in the general ledger with its balance as of a particular date.what is it?
This report is known as the trial balance.
What should NOT be included in the cash flow statement?
Non cash items like depreciation and amortization should not be included in cash flow statement.
Is book value reported on the balance sheet?
Yes book value of any asset is the value which is shown in balance sheet of company while market value is not shown anywhere it is the price which any asset is saleable in market.
