Financial Statements

If a company expends more money than it acquires through its business activities then the company will make a loss (negative profit and loss account)

Please note, however, that when starting up, a new company may anticipate making a loss for the first x number of years until e.g. the product becomes accepted or marketing strategies start to bear fruit.

Sales revenues are considered earned revenue because it was generated work the busy working to sell their goods. Businesses that generate a profit bring in more revenue than they spend on producing their products.

Sales tax payable is a current liability and is presented on the credit side of the balance sheet-

loss of $800

The expense account will be debited and capital will be credited by the same ammount

no relation...different reporting level. balance in hand is the cash that you have. pofit is the earning after your expenses. you might have profit without cash!!!

The basic purpose of projected income statement is to foresee the future position of business based on certain assumptions before the actual transactions occurred.

balance sheet

Cost in Excess of Billing is an Asset Account that means the contract is under-billed. Actual billings are less than Revenue Earned.

Financial statements are based on historical costs and as such the impact of price level changes is completely ignored. They are interim reports. The basic nature of financial statements is historic. These statements are neither complete nor exact. They reflect only monetary transactions of a business. The following limitations may be noted:

1. The financial position of a business concern is affected by several factors-economic, social and financial, but financial factors are being recorded in these financial statements. Economic and social factors are left out. Thus the financial position disclosed by these statements is not correct and accurate.

2. The profit revealed by the Profit and Loss Account and the financial position disclosed by the Balance Sheet cannot be exact. They are essentially interim reports.

3. Facts which have not been recorded in the financial books are not depicted in the financial statement. Only quantitative factors are taken into account. But qualitative factors such as reputation and prestige of the business with the public, the efficiency and loyalty of its employees, integrity of management etc. do not appear in the financial statement.

4. The rupee of 1995, as for example, does not mean the same as the rupee of 2010. The existing historical accounting is based on the assumption that the value of monetary unit, say rupee, remains constant and accordingly assets are recorded by the business at the price at which they are required and the liabilities are recorded at the amounts at which they are contracted for. But monetary unit is never stable under inflationary condition. This instability has resulted in a number of distortions in the financial statements and is the most serious limitation of historical accounting.

5. Many items are left to the personal judgment of the accountant. For example; provision of depreciation, stock valuation, bad debts provision etc. depend on the personal judgment of accountant.

6. On account of convention of conservation the income statement may not disclose true income of the business since probable losses are considered while probable incomes are ignored.

7. The fixed assets are shown at cost less depreciation on the basis of "going concern concept" (one of the accounting concept). But the value placed on the fixed assets may not be the same which may be realized on their sale.

8. The data contained in the financial statements are dumb; they do not speak themselves.

The human judgment is always involved in the interpretation of statement. It is the analyst or user who provides tongue to those data and make them to speak.

There are several reports used in accounting and that the accounting department will provide, these may include, but or not limited to,

Income Statement

Statement of Retained Earnings

Balance Sheet

Trial Balance

Statement of Owners Equity (Stockholder Equity of company is Inc.)

Statement of Cash Flows

Bank Reconciliation Statement

As I stated, these are a few. It can also depend on what function the certain accounting department is or is not in charge of that will determine exactly what statements they are required to provide.

If your talking about intracompany analysis then it is the analysis of different aspects in one company. This is related to Accounting.

An accrued income can be simply defined as an income that have been accumulated for a specific period of time without been paid. For example employee wages that was delayed either by omission or by an error.

No, it is not a cash flow, and it also is not a significant fiancing or investing activity.

The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as Assets.

Maintence Expense is just like any other expense and will be reported on the income statement and deducted from Gross Income to obtain Net Income...

No. Only the current amount of interest due and/or accrued is shown as Interest Payable under Current Liabilities.

ISA 250 consideration of laws and regulation in an audit of financial statement

Journal entry is the basic transaction to record the business transaction and without journal entry no record can be maintained.

Whether Subscription Receivable account should be presented as an current asset or a contra equity account is debatable. The US SEC requires it as a contra equity account.

A. Held-to-maturity debt securities

You have to pay corporate tax for the profit you could have made (In China)

When preparing departmental trading and a profit and loss account, expenses must be taken into account first. These include departmental expenses, and common expenses, including administrative expenses.

"Accounting Equation is true under all circumstances." Justify this statement with the help of five

illustrations.

You need to reverse the entries for excess depreciation - Debit Accumulated Dereciation and Credit Depreciation Expense