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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 fixed expenses include in net income?
Net profit is calculated by taking in calculation all expenses incurred by the firm in the fiscal year. So it includes all fixed expenses as well as variable expenses to calculate net profit.
What is the meaning of restricted investments in balance sheet?
A restricted investment is one that is not liquid. The entity may not convert the investment to cash quickly and/or easily. Examples include bonds, notes, and mortgages.
Is ending inventory asset or liability?
asset
Inventory is a current asset so when the required inventory is utilized the remaining inventory still remain as asset and not become liability.
For example
inventory of $100 purchase to use for production which is our current asset. when inventory of $90 utilized the remaining $10 is still our current asset while $90 become expense for production of units.
Profit and loss but why not profit or loss?
The intent of the document is to show both the income and expenses.
Will both the direct and indirect methods produce the same cash flow from operating activities?
Yes direct and indirect methods are just different reporting styles and it doesn't means that by making cash flow statement from different methods may change the amount of cash flows.
Does net income on balance sheet come from income statement?
Yes income in balance sheet is the same amount which is calculated in income statement if there is any difference then it may be due to distribution of net income between retained earnings and dividend.
What is the difference between accounts payable and notes payable?
Accounts payable refers to liabilities owed to creditors from whom you've made a purchase. Notes payable refer to liabilities owed to investors from whom you've borrowed money by issuing a debt security.
What are the Benefits of a financial statement audit?
So that the company will know how much it has made and how much it has in loss and to improve.
Assets minus Liabilities = Owners Equity
100,000 - 80,000 = 20,000
The Net Income (current year) is added to Owners Equity (from the previous year)
20,000 + 25,000 = 45,000
What is the accounting entry for sales return under warranty?
The accounting entry for sales return under warranty is the accrued warranty liability. This entry is written under warranty expense.
When revenue should be recognized on the income statement according to GAAP who is addressed?
business entity assumption
Why is it necessary to prepare a projected financial statement though the future is uncertain?
Projected financial statement shows management the way to go before actually going to that way in this way at least management has the plan where to go how to perform operations what need to do to achieve desired results and if there is any change at least they have something against which they can compare what went wrong.
Do the cash and bank balance in balance sheet should equal to the cash flow ending balance?
Cash Flow Statement's ending balance should match with the ending balance of cash in the balance sheet that is why cash flow statement is prepared to see the complete information about cash flow during the period if it doesn't match it means something wrong.
How do generally accepted accounting principles present an ethical issue in financial accounting?
wo hi jaane :D
Where does the information required to construct a balance sheet come from?
The account records - sales, purchases, stock, plant, depreciation of plant, taxes, salaries etc.
Is sales return a revenue or expenses?
It's a contrarevenue. It would show up in the revenue section but as a debit as opposed to a credit. A return would decrease your revenues but not increase your expenses.
payback period
Where do creditors go on a profit and loss account?
I'm a student myself but i don't think that you have to use creditors in a trading, profit and loss account....i think it's given for the balance sheet that you have to make after the trading, profit and loss account.
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Is demand deposits an asset on the accounting books of a bank or a liability?
Demand deposits are considered liabilities on the accounting books of a bank. This is because the bank is obligated to repay the deposited funds to the account holders on demand. It is essentially a debt owed by the bank to the account holders.
What are the criticism of positive accounting theory?
LOADS LOL
it doesnt provide prescriptions,
its not value free as it asserts,
assumptiopn that all action is driven by self interest to negative and simplistic,
issues have not shown great development,
christensen(1983)
Williams (1989)
