Financial Statements

trial balance of a branch consists of four types of a/cs

1) assets a/cs ,

2) expenses a/cs,

3) liabilities a/cs and

4) income a/cs.

Journal entries to incorporate all branch trial balance accounts in HO books will be as follows :

1) assets a/cs Dr.

To Branch a/c.

2) expenses a/cs Dr.

To Branch a/c.

3) Branch a/c Dr.

To liabilities a/c.

4) Branch a/c Dr.

To incomes a/c.

Debit column

conversion cost = direct wages + factory overheads (indirect material + indirect wages)

asset

debit commission expense
credit cash / bank

1. You will have to forgo profit maximization, which is the center point of any business.

So the opportunity cost would be higher profit at least in the short run.

2. Share holder dissatisfaction, which may result in the company being volatile for takeover.

land water and forest

It's a credit. It means you paid too much, and they are holding the money you paid in your account. They will use it to help pay your next bill.

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Merchandising Companies purchase and sell directly and is ordinarily longer than a service company because of the inventory and its eventual sale lengthen the cycle, which differ merchandising and service companies.

business

Advantages of Common Size statement:

•1) It reveals Sources and Application of Funds in a nutshell which help in taking decision.

•(2) If common size statements of 2 or more years are compared it indicate the changing proportion of various components of Assets, Liabilities, Cost, Net Sale & Profit.

•(3) When Inter Firm Comparison is made with the help of Common size statement it helps in doing corporate evaluation and Ranking.

Disadvantages of Common Size Statement

•(1) No Established Standard Proportion: •Common Size Statements are regarded as useless as there is no established standard proportion of an asset to the total asset or an item of expense to the net sales.

•

•(2) Consistency Required:-

•If Financial Statement of a Particular business organization are not prepared year after year on a consistent basis comparative study of common size statement will be misleading

Your creditworthiness.

timeliness

Depending on the size of the loan and/or the payment methods the following entry would be made to the journal.

Cash will be debited for the amount received

Notes Payable will be credited for the amount borrowed

More than likely the loan will be a substantial amount if starting a business and therefore will be paid out in a period consisting of more than a year. Therefore it would be recorded as a NOTE payable. However, if the company or person feels that they can make the full repayment of the loan in one year or less the accounts would change as follows

Cash will be debited

Accounts Payable will be credited.

Unfortunately this will not give us any Owners Equity or Capital. The accounting balance stays "balanced" because Assets = Liabilities + Owners Equity

Usually a person starting a business has to at least match the loan in investments. For example. I am starting a business and I want to borrow $10,000. If I match this with a personal investment the entries will change as follows.

Cash $20,000 (db)

Acc. Pay $10,000 (cr)

Owners Equity $10,000 (cr)

With out said matching your accounts will look like

Assets ($10,000) = Liabilities ($10,000) + OE ($0)

It is a statement that causes laughter because of its absurdity. It provokes and deserves derision. It is rediculous.

To the depositor, it is an income but to the bank or institution providing the fixed deposit as a product, it is an expense.

profitability analysis

balance sheet

Forumula for calculation of actual saees:

Actual sales = (number of units sold * Sales price ) - sales returns and discounts

make a better comparison of two companies of different sizes in the same industry

Cmon people, someone should know this.

Goods sold to customers on credit give rise to accounts receivable.

People who give Discounts on their shops just try to fool us. But the reality is that they make profit even by giving discounts .ìt is done by fixing the net price much higher than the cost price and then they offer the discount accordingly

A going concern is a business that operates without the threat of liquidation. The advantages of going concern are that the business declares the intention of running for at least 12 months.