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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
Where do accounts receivable go on the balance sheet?
Paid accounts receivable appears on a balance sheet, to the extent that the amounts paid are deducted from the accounts receivables balance and added to the bank account. Therefore, the effect on the balance sheet would be as follows:
decrease in asset- accounts receivables
increase in asset- Cash
(budget)
How worksheet help in preparing a financial statement?
It's all that your worksheet enrolls the detailed information of your day to day transactions. Yep, maintaining a worksheet would do so and is fairly better when used in accounting software.
Besides handling it in a hand written format, it's better to manage it online that can deliberately bring in a speedy manipulations.
For more, you can also check with Handdy Accounts - Free Self Employed Accounting Software
Is fixtures and fittings an fixed asset?
Yes it is, fixtures and fittings are usable for more than one fiscal year that's why these are fixed assets.
What element of financial statements interest payable belong?
Interest payable is liability to be cleared in future that's why shown in liability side of balance sheet.
What is journal entry when started business by borrowing cash from friend with interest 12 percent?
[Debit] Cash account xxxx
[Credit] Capital xxxx
Interest will paid after a year when it will due.
What are the consolidated financial statements?
Companies issue four basic financial statements:
- Balance Sheet
- Income Statement
- Statement of Cash Flows
- Statement of Stockholders' Equity
Companies also must present a Statement of Comprehensive Income. Most companies include this in the Statement of Stockholders' Equity.
"Consolidated" financial statements include more than one affiliated company. For example, if Company A owns all of Company B, then the two companies together will present consolidated financial statements, presented as if both companies were really one company. Each line item is presented for all companies. For example, Cash presents total cash for all affiliated companies. Sales presents sales for all affiliated companies, added together.
Why leverage ratio is used in financial statement analysis?
Leverage ratios are used to find out that how much earnings has effects on overalll cashflows and profit of business.
What is the journal entry that are paid on behalf the expenses not belong to company expenses?
There is no general entry for those expenses which are not belongs to company's normal operating business activities and no entry required.
What is going concern concept principle?
is a concept which shows that a bussiness is continue in its operation even if it is not .
Is fixtures an asset or liability?
Assuming they have been paid for . . . .it is an asset on the balance sheet. When calculating the value to give fixtures for the balance sheet, be sure to include an assessment of depreciation.
Yes reserve is part of equity as it is created from net income and net income is part of equity as well.
What effects will the decision not to revalue have on the firm's financial statements?
An entity can decide to value an asset of the Cost or Revaluation Method.
The Cost method will resulting in the Asset being carried at its original cost throughtout it economic life
The Revaluation Method will lead to the Asset being revalued to a higher Carrying Value
- This will lead to:
The recognition of the Revaluation in Other Comprehensive Income (Increasing Total Income)
Higher Defered Tax Liability
Higher Depreciation Expenses going through profit and loss (assuming depreciable asset and stable estimated useful life and residual value.)
However over time these treatments will tend to equate
As any disposal of the asset will result in a higher profit/(Smaller Loss) if treated according to the Cost Method than on the revaluation method.
Tax Treatment will be the same as the Tax Authority will regard the asset at a predetermined value regardless.
Example (Non-depreciable Asset) Tax Rate of 10% Capital Gains- Very Simplistic
Cost 100 (Year XXX1)
Revalued Estimate 125 (Year XXX2)
Selling Price 200 (Year XXX3)
Cost Method
Year XXX1
Asset Value 100
Effect on year Profit 0
Tax 0
Year XXX2
Asset Value 100
Effect on year Profit 0
Tax 0
Year XXX3
Asset Value 0
Effect on year Profit 90 (Net of tax Effect)
Tax 10
Net: Profit 90 Tax 10
Revaluation Method
Year XXX1
Asset Value 100
Effect on year Profit 0
Tax 0
Year XXX2
Asset Value 125
Effect on year Profit 22.5 (Net of Tax Effect)
Tax 2.5 (Defered)
Year XXX3
Asset Value 0
Effect on year Profit 67.5 (Net of tax Effect)
Tax 7.5
Net: Profit 90 Tax 10
fixed expense
Return on assets is Net income/ total assets. Hence to arrive at net income we should ascertain total assets first, as the return on assets is provided at 8.7%.
Total assets is sum of Equity plus Debt plus Other liabilities. We have total equity at USD 520000. Hence debt can be ascertained from the Debt Equity ratio at 1.40. But what about other liabilities? As it is not provided we will not be able to compute total assets and hence net income from the given particulars.
How can ICT be used to produce financial statements?
telephone the potato who adds 80 pennys and then licks a pineapple on the head with a cornflake.
Gain from disposal of fixed asset will less from cost of sales when preparing final accounts?
Yes it is income and income is deducted from expenses or expenses also shown alongwith income both have same effect on net profit or loss.
What is the importance of profit and trading and loss account?
It helps a company control their inflows and outflows. This will help them make a decision about if they are making a profit or loss over a period usually 12 months
Where is the receipt of a notes receivable reported on the statement of cash flows?
In the asset area
