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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
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.
What are the qulifications for an accountant?
To be truly legit Accountant, one needs either a Certified Public Accountant (CPA), Certified Management Accountant (CMA) license. In order to keep either one of these licenses, the Accountant must complete Continuing Education courses. Second, an Accountant must have experience vs. book smarts. They need to have worked for several different businesses within an industry. They will need to have seen different accounting scenarios. Lastly, an Accountant must be somewhat of a perfectionist. They need to make sure what they are doing is accurate rather than guessing. To be truly legit Accountant, one needs either a Certified Public Accountant (CPA), Certified Management Accountant (CMA) license. In order to keep either one of these licenses, the Accountant must complete Continuing Education courses. Second, an Accountant must have experience vs. book smarts. They need to have worked for several different businesses within an industry. They will need to have seen different accounting scenarios. Lastly, an Accountant must be somewhat of a perfectionist. They need to make sure what they are doing is accurate rather than guessing.
Does cash flow statement show sales?
cash flow statement don't show the sales but changes in accounts receivable and payable are shown in it.
What is fixed assets register in accounting?
The fixed asset register is a way of recording and tracking all the fixed assets that the a company owns. This helps to identify loss of assets through theft or carelessness, provides a place where deprecation can be calculated and details of insurance
This process is simple and has four basic steps. While the names of the accounts may change based on how you want to track the information, the account types should be as outlined below: 1. Pledge is made - Debit "Pledges Receivable" (Accounts receivable) and Credit "Deferred Revenue" (Liability). 2. Pledge is received - Debit "Cash Account" and Credit "Pledges Receivable" 3. Funds are released for designated purpose - Debit "Deferred Revenue" Account and Credit appropriate revenue account for the amount being released 4. Funds are used for designated purpose - Debit Expense or Asset account and Credit Cas Account
Why adjusting entries are necessary?
Adjusting entries are necessary to ensure that accounts balance. When accounts don't balance it may indicate that the company is being mismanaged.
The accounts listed on the trial balance with a credit balance include?
owners capital. revenue and expense accounts
estimate based on an analysis of recivable
Allowance for doubtful accounts is a fixed or current asset?
The Allowance for Doubtful Accounts is a general ledger account set up to estimate the dollar amount of accounts receivable that a business does not expect to collect from customers.
It works this way: A business sells 4 widgets to Customer A for $20.00 on credit and 1 widget to Customer B for another $5.00 on credit (assume that these two sales are the only sales that the company makes in the entire accounting period). Until one of the customers pays, the company has total Accounts Receivable of $25.00 ($20.00 due from Customer A and $5.00 from customer B).
However, the business must take into account the likelihood that some customers who owe it money will not pay. For example, a customer may go out of business before paying. So the business owner wants to estimate how much of its total Accounts Receivable he thinks will actually be collected. He estimates the total amount owed by customers who probably will not pay (but remember that they might pay, so he doesn't want to completely take the debt off the books yet), and he records that amount as a debit to Estimated Bad Debt account, with the credit going to a separate account called Allowance for Doubtful Accounts.
When one combines the debit balance shown in the Accounts Receivable account and the credit balance shown in the Allowance for Doubtful Accounts, the net result is the amount of total customers' debt that the business' management realistically believes the business will be able to collect.
DR Balance in Accounts Receivable Account
net of
CR Balance in Allowance for Doubtful Accounts
= the net amount that the company expects to collect as of the balance sheet date
(and this is the single amount that is reported as "Accounts Receivable" on the company's balance sheet.)
Accounts Receivable is classified as a current asset, because it is assumed that the NET collectible receivables will be collected within one year of the balance sheet date.
Allowance for Doubtful Accounts is a valuation account used to estimate the dollar amount of uncollectible Accounts Receivable as of the balance sheet date.
A general ledger account and its associated valuation account (if any) are always classifed in the same way. Accordingly, since Accounts Receivable is a current asset (which is generally the case), so is its related valuation account, i.e., Allowance for Doubtful Accounts.
ratio of fixed assets to long-term liabilites
Who is responsible for periodic financial statement analysis?
accountat for responsible for periodic financial statement analysis?
What sort of cash flow should a business have?
A business should always have a positive cash flow, meaning that the business company is gaining more money than it's losing over a specific amount of time.
Accounting information users need reports about the economic activities and condition of businesses?
yes
Does expenSes appear in balance sheet?
It depends on the nature, if expenses are paid and benefits are also rendered then expenses will be shown in income statement, but if benefits not received then it will be shown in balance sheet.
How do you treat discounts allowed and received in the income statement?
Discount allowed is an expense,take an example if one makes a cash sale and offers a cash discount,it reduces the cash paid and thus accounted for as an expense,a Discount received is treated as a revenue because take an example if one buys goods and pays cash and the person selling grants a discount,it reduces the amount paid and thus an added revenue,the difference on what i paid and what was ought to be paid,its always given in percentage,with set conditions.Types of discounts can be trade or cash both allowed and received.
Double entry on bad debt reserve?
Bad debt reserve is an amount set aside by companies in the event that some creditors would not be able to pay their debt. A double entry is to write off the bad debt from the accounting books. For example, company A sold goods to company B for $100 on credit. This is entered as $100 debit in company A's ledger. Later on, company B is unable to fulfill payment on the goods. Company A therefore must write this off in their ledger to keep their assets in check. This will now be entered as $100 credit in the ledger.
What is Cost of revenue what is operating expenses?
The cost of revenue is the cost to produce a product. Operating expenses are expenses that have to be paid in order to stay in business like rent, utilities, etc.
Why are common sized income statements used?
Common size statements are used to facilitate the comparison of operating results of different businesses. For example, if one company is 1/3 the size of another in terms of revenue, looking at the raw dollars doesn't help much. Common size statements put the numbers as percent of revenue, thereby making it easier to compare the financial results of the businesses.
Why do managers need accounting information?
in the present time large area of business that's why a manager can not be analysis the whole business. to get a various information ,problems,profits of the business and take good decision of fever of business.
Is sales commission a current liability or an expense?
If sales commission is payable in future time then it is current liability but if it is paid already then it is expense.
Depreciation on plant and assets?
Plant and assets are those items which is usable in business for more than one fiscal year to generate revenue for business that's why depreciation is charged to allocate the specific portion of cost related to one fiscal year through income statement.
