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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 government interested in financial statements?
government interested in a financial statement because of following reasons-
1. for tax assessment
2.for knowing of financial position
3.matching it with other companies to know growth in that company and sector
4. grant subsidy
Can a firm prepare financial statement by adopting cost accounting?
yes through the use of the cot information prepared enable the evaluation of the stock value and the capital used in the business including the liabilty of the company..
How are assets and liability treated?
If asset is increased it is Debited in Ledger and if liability increases it is credited.
Accounts Receivables are treated as assets.
Both Assets and Liabilities are shown in face of Statement of Financial Position.
Where do you enter gross profit on an income statement?
Gross profit is usually the third item on a multi-step income statement:
Net Sales
Less: Cost of Goods Sold
Equals Gross Profit
Gross profit does not appear on a single step income staement.
How much does an accounting controller make?
The salary for an accounting controller varies greatly depending on the state you work in and the company you work for. The median salary for an accounting controller is 176,000 dollars per year.
In finance what is an excess of liabilities over assets called?
What is excess of total liability over a total assets?
Gross income could be considered revenue. In business, revenue is received payments. Profit is revenue less expenses and cost of goods sold, if applicable.
discuss the various measuerement techniques used on the balance sheet to disclose asstets and liabilities
How is stockholder's equity increased by revenues and decreased by expenses?
Briefly explain why the owner's investment and revenues increased owner's equity, while withdrawals and expenses decreased owner's equity
What items is reported on the statment of cash flows under financing activities?
A) Cash purchases of equipment
B) Cash purchases of bonds issued by another company
C) Cash received as repayment for bonds loaned
D) Cash purchase of treasury stock
Why is it necessary to distinguish between capital and revenue expenditure?
- Then only they find the real profit or loss and financial position of the business
- Because the capital expenditure will take place to Balance sheet and revenue expenditure will go to profit and loss account. Capital expenditure also called asset of the business. These expenditure also called non-recurring nature expenses.
- Revenue expenditure also called recurring nature expenses.
The changes in financial statement items from a base year to following years are called?
The change in financial statement items from a base year to following years are called trend percentages. A trend percentage can show several years of financial data, with 100% in the base year and the set percentage of the other years.
Does account payables appear on the income statement?
NO, Account payable is a balance sheet item it does not appear in the income statement.
What is the purpose of depreciation expense and accumulated depreciation?
Depreciation expense reduce the cost of asset through income statement for the useful life of asset and accumulated depreciation account is contra account for asset account in balance sheet to show the total amount of depreciation charged.
Does AP appear on the balance sheet or income statement?
Accounts payable is shown in liabilities side of balance sheet as it is the liability for business for purchasing goods on credit from vendors.
What are some common methods for the internal control of cash?
An allowance.
Here are some additional controls
For Cash receipts
> Keeping Cash handling and Book Keeping separate
> Daily deposit of cash receipts
For Cash disbursements
> Making all disbursements by cheque (other than petty cash)
> Keeping the Cheque book under lock and key.
> Sign checks only if adequate documentation is presented
> Have only higher-level personnel sign checks (neverthe bookkeeper!)
> Prepare bank reconciliations.
> Keep petty cash in a safe place.
> Execute Fidelity bonds on employees in positions of trust, such as book-keepers. (Fidelity bonds are insurance policy taken against the risk of dishonesty by employees.)
Do cost of production report reports the cost of googs sold?
It depends on the purpose of the report. If the report goes to superior levels is good that he goes with the information of COGS. However we should separate the cost of production of COGS.
Therefore it verifies who will read the report and depending you can include (or not) COGS. Luciano.
deferred charge
What is the accounting treatment of capital reserve?
Capital reserve: Capital reserve represents surpluses or profit in respect of certain type of transaction: example, on scale of a fixed assets at a price in excess of cost,realisation of profit on issue of fortified shares etc. it is a reserve, which doesn't include any amount regarded as free for distribution through the profit and loss account. It includes share premium, capital redemption reserve , development rebate reserve . profits on reissue or fortified shares it also includes any grants received from central or state government or other assets gifted by central or state governments free of cost are nationally valued and credited to capital reserve. a) Grant-in -aid from the government of India . b) Grant-in aid from others. Government grants defined: government grants are assistance by governments in the form of transfer of resources to an enterprise in return for the past and future compliance with certain conditions relating to the operating activities of the enterprise. Non - monetary government grants: the non -monetary government grants may be in the shape of free land or other resources for the use of the company. The capital reserve may be utilized in the following manner: a) To utilized for writing down fictitious assets or losses (subject to provision in the articles) or for issuing bonus shares. But the amount of share premium or capital redemption reserve account can be utilized only for the purpose specified in section 78 and 80 respectively of the companies act. b) To write -off capital losses on transfer of assets received free of cost or assets acquired out of grant, which had been accounted for under capital reserve.
Why profit goes up and dividend doesnt?
Declarion of dividends is the right of the shareholders. The management, Board of directors, only recommend that dividend proposed for discussion in the General Body Meeting of shareholders, which normally approves the financial statments. The general body consisting of shareholders can modify the recommendations. The majory decision will prevail irrespective of the lack of / availability of profits.
What is an example of an amortized expense?
The costs of long-lived intangible assets, such as patents, are allocated across time periods and reclassified as amortization expense.
