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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
Revenue is equal to credit sales?
Revenue is often used synonymously to the word sales (cash & credit both)
What is the Journal entry for gain on sale of equipment?
debit accumulated depreciation
debit cash
credit asset
credit gain on sale of asset
Debit to Cash (or Accounts Receivable) for the sale Price. Debit to Accumulated Depreciation for the total amount of depreciation charged against that piece of equipment since its original purchase date. Credit to Equipment account for the original purchase price. Credit to Gain on Sale of Fixed Asset (or Other Income) for the difference needed to balance the entry.
What are share application monies?
Share application monies are the cash received by an enterprise issuing shares by people who are interest to become share holders of that enterprise.
What is the accounting journal entry to record stamp duty and fees imposed on the purchase of land?
Dr Land & Property
Cr Bank
What is the accounting journal entry to record financed annual insurance premium?
Debit annual insurance premium
Credit cash / bank
While calculating cash flow from operating using indirect method, Loss on sale of equipment is added back to net income as due to loss there is no cash outflow occurs.
Sales revenue = breakeven sales + Fixed Cost
Sales revenue = 40000 + 30000
sales revenue = 70000
Prove
Sales revenue = 70000
Less: V.C = 40000
Contribution Margin = 30000
Less:Fixed Cost = 30000
Profit (loss) = Nill
How can you interpret financial statements for different business sectors?
One way to interpret financial statement is to use ratios. Ratios can help determine:
- Profitability - whether the business is a good investment;
- Liquidity - the amount of working capital that is available;
- Solvency - how easily the business can pay its debts as they fall due;
- Efficiency - how effective the management and business processes are.
What come under administration expenses in financial statements?
All administration related items included in it like administration staff salaries and other day to day expenses.
no
Where does reserve for depreciation go on the balance sheet?
accumulated depreciations are recorded in the liability side of the balance sheet as a deduction from concerned assets. it also shows in the debit side of profit and loss account as an expence
Real Account - Debit what comes in Credit what goes out.
Nominal Account - Debit all expenses and losses Credit all incomes and gains.
Personal Account - Debit the receiver Credit the giver.
What is the definition of accounting?
Accounts Receivable are invoices for work completed and billed out that have not been paid by your customer.
Debit the $10,000 towards the A.R. account associated with the customer, and write the amount of the payment and the discount under it...
Account Receivable
Check #012 debit 9800
Sales Discount debit 200
invoice 003
Sorry for the odd formatting. Just balance out the credit balance of $10,000 with the check and the sales discount. If you are using QuickBooks, I might suggest editing the invoice within the program to $9800 and then marking it as paid. If you're doing it old school then hopefully you get the general idea...
How does a company have income but take in less cash that it spends?
Income is all the money a company takes in (hence the name)
expense is all the money a company spends
profit is income - expense.
just because expense > income doesn't mean there is no income. It means there is no profit.
Is a sells commission a variable expense?
If amount of sales commission is fixed and not base on number of units sold then it is fixed expense and vice versa.
OPERATIONAL AUDIT. An operational audit is a systematic review and evaluation of an organizational unit to determine whether it is functioning effectively and efficiently, whether it is accomplishing established objectives and goals, and whether it is using all of its resources appropriately. Resources in this context include funds, personnel, property, equipment, materials, information, space, and whatever else may be used by that unit. Operational audits can include evaluations of the work flow and proprietyof performance measurements. These audits are tailored to fit the nature of the operations being reviewed. "Carefully done, operational auditing is a cost-effective way of getting a higher return from the audit function by making it helpful to operating management.
COMPLIANCE AUDIT. A compliance audit determines whether the organizational unit or function is following particular rules or directives. Such rules or directives can originate internally or externally and can include one or more of the following: organizational policies; performance plans; established procedures; required authorizations; applicable external regulations; relevant contractualprovisions; and federal, state, and local laws
FINANCIAL AUDIT. A financial audit is an examination of the financial planning and reporting process, the conduct of financial operations, the reliability and integrity of financial records, and the preparation of financial statements. Such a review includes an appraisal of the system of internal controls related to financial function.
Which one is better either straight line method or written down value method in depritiation?
written down value method is better
Are utility expenses recorded in balance sheet?
Utility expenses are recorded in the expenses section of an income statement
What is the difference between annual and interim financial statements?
Annual financial statements are the financial statements dated as of the company's fiscal year-end and reports the results of the previous 12 months of activities. Interim financial statements are the financial statements prepared for those periods of time (monthly, quarterly, etc.) between the company's annual financial statements. Assume a company has a June 30th fiscal year-end. The company would issue annual financial statements dated 06/30/07, 06/30/08, etc. However, the company's 09/30, 12/31, and 03/31 quarterly financials would be termed interim financials.
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