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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
Why is it important to prepare the financial statements prior to the closing activities?
It'd be far better to end-up with the current transactions and the related financial details while starting over the new one. And with that, the financial statements would do so the needed in order the tax returns, payroll information, etc is vivid for the business to submit whenever required.
This would be the reason for preparing the statements.
Why is sales forecast a key element in a capital budget decision?
Sales forcast determines that how much production is required and then to meet that production level how much new investment and machinery etc required.
consolidated statements
How can you troubleshoot your tally 7.2?
I configure my printing configuration in Tally 7.2 and save it, but when I closed the software and get back, all my printing configuration is lost, what can I do to save my printing configuration all the time?
Is net income the same as net profit?
Yes. Net income is generally calculated the same way on net profit.
Why you use accumulated depreciation and not reduce depreciation from asset directly?
Basically the concept is to provide more detailed information and a method of checks and balances against the depreciation. The original acquisition cost of the asset is preserved this way and always appears until the asset is disposed. If you simply reduced the asset every year by the depreciation amount there would be less information for outsiders to understand why the asset keeps decreasing, or have the ability to distinguish whether you have new, low cost assets or a bunch of ancient assets which are almost completely depreciated.
The excess net income is the result of Interest income or gain in assets or miscellaneous revenue. This type of transactions occur not based on the sales of goods or services. They are deducted after the gross sales (net sales - expenses).
Is accounts receivable a asset or liability?
Accounts receivable is that amount which is receivable from debtors at future date that's why it is current asset of business.
Is rental income operating or non operating revenue?
It depends on the business. If the company is in the business of renting apartments, then it would be operating income. But on the contrast if the company is renting out an extra room for some extra cash than no.
Is depreciation cost relevant in Outsourcing?
Only the total amount of a new machine is a relevant cost because this incurs in the future and incurs when a certain decision is made. The depreciation of old machines is a sunk cost so this is an unavoidable cost. The amount for the old machine you sell is a relevant cost because you will get this amount if you sell the old machine and buy the new one.
What are creditors in balance sheet?
Creditors in a balance sheet, are the companies, people etc... that you owe money to. They could be utilites, materials purchased, or anything that you have not yet paid for, but have received. This is the opposite of Debtors - people that owe you money.
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What is a budget income statement?
A budget income statement can be prepared from the data developed in:
- Sales budget
- Ending finished goods inventory budget
- Selling and administrative budget
- Cash budget
The budgeted income statement is one of the key schedules in the budget process. It shows the company's planned profit for the upcoming budget period, and it stands as a benchmark against which subsequent company performance can be measured.
Does net loss occurs when expenses are less than revenue?
Net Income : When Revenue is greater than Expenses.
Net loss : When Expenses are greater than Revenue.
References : Basic Accounting (111) Book .
What happens when a business costs and expenses exceed its revenues?
If the expenses are greater than income then the company has run at a loss which can be considered normal in the first year or two. A company that has been operating for two or more years might need to look at its marketing plans and see if the product can be bought by them cheaper or if their mark up is high enough. GST payments are made based on GST collected compared to GST paid out so this company would get GST refunds. However i.the rpoblem is not solvable the company may go into liquidation because they will not be able to pay their creditors
How is carriage inward treated in a trading and profit and loss account?
it is added to the cost of sales
What is journal sold goods to sourav?
Journal entry for selling goods to Sourav:
Debit: Accounts Receivable - Sourav Credit: Sales Revenue Credit: Inventory
This entry records the sale of goods to Sourav, debiting the Accounts Receivable account for the amount owed by Sourav and crediting the Sales Revenue account for the revenue earned. The Inventory account is credited to reduce the quantity of goods in stock.
this should be recorded on the balance sheet as a loss
Does interest continue to accrue on the interest balance after the principle is paid?
Interest on any account is paid before anything is paid on the balance. That's how credit card companies, well any lender makes a profit.
cach control?
Are restructuring charges tax deductible?
No.
Check out the below URL, type CTRL +F and enter in "restructuring" in case you are skeptical.
http://www.business.uconn.edu/users/smf/deferred_taxes.htm
To check on the financial position of the company eg: payables and receiveables
