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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 prepaid rent a long term asset?
A Long-Term Asset is one in which the benefits of that asset extend beyond the course of a year. The benefits of prepaid rent are typically more immediate, and therefore Prepaid Rent is classified as a Current Asset.
Is preliminary expenses is a administrative expenses or selling expenses?
Preliminary expenses are neither administrative expenses nor selling expenses rather these are classified as other assets in balance sheet and amortized over period of life of business.
Where does mortgage interest go on a balance sheet?
they go on the Non current liabilities as they are not payable within a period of 12 months
Is accumulared depreciation included in post closing trial balance?
Yes, it is typically credited on the Post-Closing Trial Balance.
Can retained earnings be used for cash flow purposes?
yes retained earnings can be used to get more capital for business to smooth out the cash flow problems.
Is turnover the same as profit?
No !!
Turnover is the amount of money that is used for the business to trade, profit is the amount of money that is left after the costs of the business have been subtracted from the income from the business.
turnover in general sense means the total revenue derieved by an enterprise from its primary business . however different rules and provisions of various laws and acts define turnover differently . There cannot be any stable definition for turnover .
What is the reason of why assets must equal to liabilities and capital?
in case things go belly up you need to have a means of paying off the liabilities
Is unearned rent closed on a income summary at the end of a fiscal year?
Unearned Rent is rent paid in advance to one company/person from another. Unearned Rent is a liability until it is earned. Unearned rent is "not" closed on an income summary at the end of the fiscal year. Unearned rent is never actually "closed" but actually brought down to a zero balance account.
For example, your company was paid rent for December 2010, and January and February 2011 in the amount of say $15,000 and on December 31, 2010 your fiscal year ends and you are closing your books and the December rent paid to you expires (is used up for December) your entry will be a debit to unearned rent for $5,000 and a credit to Rent Revenue for $5,000. This still leaves a balance of $10,000 in unearned rent for the following year (Jan. and Feb.)
Let's look at another scenario, say you charge $3,000 a month for rent and your company is paid for the full year (Jan.-Dec.) Your first entry to record such a payment is a debit to cash $36,000 and a credit to unearned rent $36,000
As each month expires you remove the amounts in increments of $3,000 until the account balance in unearned rent is zero, then at the end of the accounting period, rent revenue is closed to the income summary, not unearned rent.
ratio analysis
What are three golden rules of accounting explain them in detail?
Real account
personal account
nominal account
What is the account entry if an asset is acquired at no cost?
Debit Assets account and credit Capital Account
Which inventory costing method assigns the most recent costs to the cost of good sold?
LIFO (Last in First Out) method is the method which charge the most recent prices to cost of goods manufactured and sold statement.
journal entries can be prepared at any time.there is no particular time/day/month/year.only if it is mentioned in question we prepare it according to given data.
Why is owners equity regarded as a liability to the business?
Owners equity is the amount invested by the owner of business to the company and as a seperate entity it is the liability of the business to return back that amount to owners as owners are seperate entity to business.
vikas
How is depreciation handled under cash flow and fund accounting?
Depreciation is taken out of cash flow information because it does not account for any cashflow, just like provisions. The notes which account for this deduction is "Reconciliation of PBT with cash generated from Operation".
How do you do journal entry for Forecasting Sales?
There is no journal entry for forecasting sales rather journal entry is made for actual sales when they occur.
What is the journal entry for lost fixed assets?
Debit Accumulated Depreciation
Credit Fixed Asset
If there the asset has a net book value, then you will have to Debit or Credit Gain or Loss on Sale of Asset for the difference. Also, you may have received money if the asset was sold or there may be a loan to payoff. Those transactions will need to be included in your entry as well.
What is the difference of trial balance of balances and trial balance of totals?
trial balance of balances is the trial balance with two columns while trial balance of totals is the one with four columns
Is capital assets or liabilities?
It's neither. It's part of the equity on the balance sheet. Although it does have similar proprties to liabilities.
P.S. - Please also see: What are the three main kinds of capital?
Is dividends an asset on the balance sheet?
If dividend payable then liability if dividend receivable then it is asset if dividend paid then it is not part of balance sheet.
