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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
If An investment by a company's owner increases a company's cash would it increase owners equity?
yes
Which balance goes to the balance sheet cash book balance or bank balance?
You use the cash book balance. The bank balance on the bank statement is just used to reconcile to the cash book balance to see what is due to clear after the reporting period and verify that the cash book balance is correct.
The importance of producing a trial balance in a double entry bookkeeping system is to check to see if there are any errors in any columns. If the columns do not balance then you must search for an inaccurate entry.
no
I think
Delloite
PWC
KPMG
E&Y
Every year the international audit networks report their revenue and for 2008 PWC, Deloitte, EY and KPMG were the top 4 (commonly named Big Four), and the rank between 5 & 10 (commonly called Mid-Tier) are BDO, GT, RSM, PKF, Baker Tilly and Horwath. However, not all Networks are constituted & governed in the same manner. For more information go to: The International Accounting Bulletin and top audit firm for 2008 are as below table:
Top International Networks / Associations by income: 2008
Firm Name
Currency
Income
Growth Rate
Year-end
PricewaterhouseCoopers International
USD
28,185.00
14.00
30/06/2008
Deloitte
USD
27,400.00
19.00
31/05/2008
Ernst & Young Global
USD
24,500.00
16.00
30/06/2008
KPMG International
USD
22,690.00
15.00
30/09/2008
BDO International
USD
5,145.40
9.00
30/09/2008
Grant Thornton International
USD
4,000.00
14.00
30/09/2008
RSM International
USD
3,576.50
19.00
31/12/2008
Praxity
USD
3,232.60
14.00
31/12/2008
Baker Tilly International
USD
2,955.70
18.00
30/06/2008
Crowe Horwath International
USD
2,894.50
19.00
31/12/2008
The top Seven World rank in 2009 are as follows:
1- PWC =26.2 Billion USD
2-Deloitte =26.1 Billion USD
3-Ernest Young- 21.4 Billion USD
4-KPMG=20.11 Billion USD
5-BDO= 4.9 Billion USD
6-Grant Thornton= 4.1 Billion USD
7-RSM International 3.8 Billion USD
Sources:IAB 2009 and accountancyage.com
List of Direct and Indirect expenses in Accounting?
Some direct expenses for a furniture manufacturer are:
- Laborers' wages
- Handles, locks and hinges
- Synthetic wood
- Glass
- Wood
Some indirect expenses for a furniture manufacturer are:
- Power consumption
- Nails and screws
- Supervisors' salaries
- Varnish, glue, paints
- Factory insurance
- Factory depreciation
- Factory manager's salary
What does p and l mean in the retail industry?
A profit and loss statement is an overview of the fiscal condition of the company.
Where would the purchase on noncurrent assets be reported in the statement of cash flows?
Purchase of fixed asset is shown under cash flows from investing activities as an outflow of cash because purchase of assets is an investing activity and it causes reduction of cash flow.
Why use a proforma income statement?
Proforma income statements often are used as planning tools and financial analysis. They usually are based on past information. But they can be drawn by estimating and making assumptions based on figures and results in other, similar situations.
Proforma income statements project expenses and revenue into the future for a specified number of quarters or years. They often are created for making significant decisions, such as launching a new product line, expanding production, considering a merger, etc.
For more information, go to aaupwiki.princeton.edu/index.php/Proforma_Financial_Statement.
Which is the most important out of Gross and Net profit?
They are both important, it depends on what part of the company you are examining. However it is the ratio between them that will tell you how successful the company may be. The gross profitmeasures only part of a business, whereas the net profitmeasures the whole business.
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The gross profit tells you the difference between your revenue and your direct costs - that is, the costs of building and selling your product or service. This is an important indicator that measures the efficiency of your company's production and development.
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The net profit tells you how much money is left after deducting all business expenses, including direct costs (above), overhead, indirect payroll, taxes, royalties, interest, etc. This indicates how healthy your business is overall.
Give 5 reasons for preparing financial statements?
To know the profitability of the company.
To satisfy the shareholders with their investment in the company.
In case of financial sourcing, these statements can be of relevance for the company for instance, banks will need to look at its stand in order to be certain and convinced that their money will be repaid.
How do you deal with oversubscription of shares and what will be the accounting entry?
Based on australian standards. Dr application of shares
Cr Cash Trust
Net worth is equal to a stockholders equity plus what?
Net worth is equal to stockholders' equity minus liabilities.
What is Net Liquidity Balance?
The net liquidity of a position (s) is the cash balance + unrealized g/l.
What is the general ledger journal entry to write off notes receivable?
debit bad debts
credit notes receivable
Is company management an external user of financial information?
no it is an internal user of information.External users are financial analysts outside the company, lenders and creditors such as banks and suppliers, and groups such as environmentalism groups and govermental bodies.
Stockholders' equity is to a corporation what owner's equity is to a sole proprietorship.
Owners of a corporation are called stockholders (or shareholders), because they own (or hold) shares of the company's stock. Stock certificates are paper evidence of ownership in a corporation.
For sole proprietorship stocks usually are not issued.
Examples of stockholders' equity accounts include:
- Common Stock
- Preferred Stock
- Paid-in Capital in Excess of Par Value
- Paid-in Capital from Treasury Stock
- Retained Earnings
- Etc.
Both owner's equity and stockholders' equity accounts will normally have CREDIT balances.
How stockholders' equity is reflected in the balance sheet?
The stockholders' equity section of a corporation's balance sheet is:
- Paid-in Capital
- Retained Earnings
- Treasury Stock
The stockholders' equity section of a corporation's balance sheet is:
STOCKHOLDERS' EQUITY
Paid-in Capital
..Preferred Stock
..Common Stock
..Paid-in Capital in Excess of Par Value - Preferred Stock
..Paid-in Capital in Excess of Par Value - Common Stock
..Paid-in Capital from Treasury Stock
Retained Earnings
Less: Treasury Stock
..TOTAL STOCKHOLDERS' EQUITY
Does current income go into cash flow statement?
Yes in indirect method of cash flow statement , cash flow from operating activities is prepared by taking the current year income as starting point
Two common subgroups for liabilities on a classified balance sheet are?
current liabilities and long term liabilities
How do you get a higher rate of return?
Just as getting more money produces a higher rate of return, getting the money sooner also produces a higher rate of return.
Is dividends declared account permanent or temporary account?
Dividend is a temporary account at it is closed the retained earnings account at the end of fiscal year.
You need an income statement to see that the company is profitable, a cashflow statement to see it is solvent and a balance sheet to see it is healthy.
What is the accounting treatment for 'deposit for shares'?
If the deposit for shares does not meet the definition of liability i.e. there is no obligation to pay back then it should be treated as equity.
