0
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
What is the entry to record depreciation expense?
There are two entries to record Depreciation Expense. Say we are depreciating a Truck
Debit Depreciation Expense - Equipment Truck
Credit Accumulated Depreciation - Equipment Truck
At the end of the Accounting Cycle when the books are closed Depreciation Expense will be closed out, Accumulated Depreciation will not be. It remains on the books as long as the item being depreciated is in use and still listed as an Asset.
If common stock were issued to acquire machinery how would it appear on a statement of cash flow?
It will be shown as increase in asset under cash flow from investing activities while increase in share capital under cash flow from financing activities.
How can a limited company value its fixed assets to best inform those who use its financial reports?
revaluating the assets and dispose the unneccessary
What are the Journal entries for treasury bills purchased on discount?
debit cash credit bills purchase
so that they can see their progress so that they can see their progress
A cash flow statement can be more useful than a funds flow statement- Discuss?
do your homework for you. Nor will it write your discussion paper, critiques, summaries or essays. That is considered cheating. If you have a specific question in the subject we are more than willing to help
What is amalgamation and absorption and external reconstruction in accounting?
Absorption:
It is the process in which one existing company takes over the other existing company and merge together as a single unit.
Amalgamation:
It is the process in which two or more existing companies joins together and start new company with new name and identity and dissolves the existing companies.
External Reconstruction:
It is the process in which one existing company reconstruct itself with new name and identity.
How many years are covered in each of the primary comparative financial statements?
Normally two, the most recently audited and the previous year.
A corporationâ??s stockholdersâ?? equity section lists more accounts than a sole proprietorshipâ??s ownerâ??s equity section. The ownerâ??s equity section also contains only one account, called the capital account. The balance sheet typically shows this account as the ownerâ??s name followed by â??capital.â??
Why do returns from an investment carry a risk?
Because whatever/whoever you are investing in is not a sure thing. If you had invested in Enron 10 years ago, it was a bad risk. If you had invested in Microsoft 25 years ago, you'd be a happy camper - the investment/risk was worth it. When you invest your money, you're in essence betting your money that the business/person will do well. The risk is spread out. The higher the risk, the more your payback should be. If you want very little risk, get a savings account or US government bonds. There is still risk, but very, very little. Your return on investment will not be great, but you aren't risking much.
To earn a decent living, buy a house, car, etc. You also can put part of your earnings towards retirement so that one can live comfortably in their older years. Work now, play later.
What will be the effect on net income if a firm repurchases stock?
If a firm repurchases its own stock, then net income decreases because the company spent money to reacquire the stock.
However, while net income decreases, the company's equity increases because it now controls more stock.
How is sunk costs related to discounted cash flow?
In DCF calculation only the incremental has to be considered. That means that sunk costs (cost that have been spent in the past) or costs which would be spent independently from the project are not taken into account. On the other hand opportunity costs have to be considered. e.g:
- equipment and machines already exist and cannot be allocated to other projects furthermore selling into the market is not possible too => sunk cost wont influence the project decision thats why they wont be considered in the DCF calculation
- equipment and machines exists already but can be used for other existing production as replacement eg. In this case the machine has be considered because otherwise the company has to invest money for the replacement of the existing production (opportunity costs)
BR Dirk
Do adjusting journal entry affect the income statement or balance sheet?
Adjusting entries affect at least one income statementand one balance sheet
Solution of Analysis and Use of Financial Statements by Sondhi and White 3rd edition?
inventory method
Similarity of a trial balance and balance sheet?
similarities between Trial Balance and Balance Sheet
1. Both shows the financial position as of a particular date.
2. Both shows the balances of Ledger accounts and not the transactions.
3. Both can be used to do comparative analysis.
Do you depreciate an asset in the year of sale?
Yes assets are depreciated in year of sale upto the sale time in fiscal year of sale. IF asset is sold at start of year then there is no depreciation for that fiscal year.
What is carriage inwards and how does it affect the income statement?
The carriage inwards is an expense added to purchases under COGS. It is a credit entry in the icome statement, thus it reduces the gross profit
What effect does an overstatement of inventory have on a company's financial statements?
Overstatement of closing stock will inflate profit and overstatement of opening stock will have an inverse effect.
Could a firm have negative working capital and still be in great financial shape?
Some companies can generate cash so quickly they actually have a negative working capital.Some extremely efficient companies, such as Wal-Mart, can have negative working capital because they sell goods on the shelf faster than they pay the vendor for the merchandise
period convention
Accounting for business chart of accounts?
A Chart of Accounts is more than a list of General Ledger Accounts. A functing Chart of Accounts is:
(1) the center of the financial record keeping process
(2) a 'posting map' for recording financial transactions
(3) the outline for financial reports
Developed correctly, the Chart of Accounts will clearly communicate financially significant information; information that informs owners and managers about the financial condition of their venture and that assist them in making prudent, accurate, proactive business decisions.
A functional Chart of Accounts has three characteristics:
- Reasonable size - Reports should be no longer that two pages.
- Organized Logically - Balance Sheet GL Accounts are pretty well set by Accouting standards; Profit and Loss GL Accounts are yours to toy with.
- Defined - Each GL Account needs a detailed definition to assist the non-accounting employees in understanding the nature of each account and to guide the bookkeeper (espically a new bookkeeper) in recording transactions.
The point here is, 'don't just list expenses' think through the financial significances of each GL Account.'
