Financial Statements

B. Analyse your current financial position

All assets whether tangible or intangible are reported on balance sheet as current assets or long term or fixed assets like goodwill, patent etc.

binary form

Financial analysis is a term that can cover more than one realm, although at each approach the end goal is the same. Performing financial analysis on a company or individual, for example, is a close scrutiny of how the entity is doing financially and what concerns or trends should be noted. Similarly, financial analysis tools used in conjunction with investing help to establish and monitor the "health" and longevity of an investment portfolio.

Cash Flow measures how much cash comes in while what goes out. Although you can be profitable but if your cash comes after a long time, sooner or later you will run out of cash to produce more products and land up in cashflow problems.

profit public companies dealing in the money markets required to provide Comparative balance sheet,profit and loss , cashflow statements.

Provisions are defined as liabilities of uncertain timing and amount.

2 types of provisions

1. provision that are in the nature of liabilities ( eg provision for warranty)

2. provisions that are in the nature of asset valuation ( eg provision for doubtful debt)

explain the difference between cash and credit transaction

thousand time thousand makes a millon

There are various ways to record a journal entry when the inventory is thrown away. The standard entry is to debit the cost of goods sold and credit the allowance for the obsolete inventory.?æ

You must subtract the cost of goods sold from the net sales to get the gross margin (same as gross profit)

unpaid expenses (a.k.a payables) are recorded on the balance sheet in the current liabilities section.

It doesn't. Gross profit is the of a company is the profit it receives for the product or service produced after the cost of that service or product. It does not take into account any other expenses incurred by the company. Net profit takes this into consideration.

Price of stock can increase or decrease the available money for a company to invest or use for generating income.

Trading assets are those that are managed by banks who have securities that they trade. These help them to make more money from the process.

1) Given the CD investment: 20,000 2) Given the 15 months return of: 21,095.20 What formula can I use to find the APY ?? PG.

Itemise and evaluate the criticism of traditional cost of accounting system?

positive cash flows are inflows while negative cash flows means cash out flow from different activities.

When you are doing an adjusting entry, you are just doing no more than that, Adjusting an entry.

For example. If you have rent paid for a year each month you want to "adjust" the entries to show that the months rent was used up or is no longer available. Cash is not involved in the Adjusting entry because the cash was already paid out at the beginning of the year, so if you used the cash account you would be paying out cash for a payment that has already been made.

Say you paid $120,000 on January 1st for the entire years rent. Your first entry would be recorded as such

Jan. 1

Prepaid Rent (DB) $120,000

Cash (CR) $120,000

On Feb 1st you want to adjust the entry to show that one month's rent has expired (or been used up) the entry would be as follows.

Feb. 1

Rent Expense (DB) $10,000

Prepaid Rent (CR) $10,000

No cash is involved in the entry because cash was paid out at the beginning of January.

Categorize all assets by type (cash, receivables, equipment). Categorize all liabities by type (accruals, accounts payable, loans payable).

Determine initial investment in business. Difference is "retained earnings", which is cumulative profit from the start of the business.

The above assumes proper tracking of sales, purchases, disbursements, etc.

Balance sheet shows the financial positions of any company by comparing two sections: liabilites and assests.

Search google for "benchmarking-your-business-against-industry-averages" for a description of how you can find common asset and liability types of US corporations.

1It is a book of account within thedouble entry system.1It is an account outside the double entry system.2Each transaction is recorded here separately in chronological (according to date) order.2Each transaction is not recorded separately - all the transactions are recorded at a time at the end of accounting year in a classified from.3Each entry is followed by narration3No narration is written here.4Ledger reference is recorded here4No ledger reference is recorded5Daily cash balance can be ascertained from this book.5Daily cash balance cannot be ascertained.6All concerns (non-profit seeking and profit seeking) organizations prepare it.6Only non-profit seeking organizationsprepare it.7Whenever a cash transaction takes place, it is recorded in this book. In other words, it is a current account.7It is prepared on the last day of the year. In other words, it is a periodical account.8It is a must.8It is not indispensable - it may not be prepared.

Balance per book is company's record and balance per bank is banks record on the bank reconciliation.

Either verb form could be correct in an appropriate context. Have is used for most tenses, but "has" is used for the third person singular.

If my account "has an outstanding balance" then I "have an outstanding balance."

When you close the accounts, it totals into retained earnings, so in turn, it is essentially retained earnings.

credit side

Decrease in share premium account is shown under 'Cash flow from financing' activities as this is related with issuance and buy back of shares