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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
What is an example of an indirect cost associated with mismanaged organizational stress?
quality of productivity
Which account has a balance equal to net income immediately before it is closed?
income summary account.
Why should accumulated depreciation be treated as expense?
It is treated as expense because it uses to allocate the related assets cost portion to profit and loss account due to usage of fixed assets for revenue generation in fiscal year.
What is The journal entry to record the purchase of inventory included a debit to?
[Debit] Purchases
[Credit] Cash / bank / accounts payable
Are drawings an apportionment of profit?
Drawings are reduction of capital as it is owner withdrawal of cash from business and it do not affect profit.
Is net income a debit or credit in the statement of cash flow?
In a statement of cash flow a net income is a credit, which should always be the same amout of cash in your balance sheet. (nice check)
What is the definition of Weighted average cost?
Weighted average cost includes all types of finances company uses to finance it's business like equity finance, debt finance, loan or debenture etc.
What items on a company's balance sheet have no physical substance?
Intangible assets are items such as Copyrights, patents, goodwill, trademarks, etc. These would be classified as Intangible Assets on a company's balance sheet.
Which types of inventories does a manufacturing business report on its balance sheet?
1. Materials Inventory
2. Work in Process Inventory
3. Finished Goods Inventory
What is the journal entry to correct a payment of a bill which was paid to another vendor in error?
[Debit] Correct Vendor
[Credit] Wrong Vendor
Only Vendor accounts will be adjusted as cash or bank account is already charged correctly.
What is debit sales and credit cash in accounting?
A debit on sales, while crediting cash means a cash refund to a customer.
A sales transactionFor a service provider, the journal entry for a cash sales transaction has a debit on cash, and a credit on sales. Assuming a sales price of $100:
cash 100 (debit)
sales 100 (credit)
A refundIf for whatever reason the customer requests (and receives) a (partial) refund, sales is reduced. The journal entry of a $30 refund would be the reverse of the above:sales 30 (debit)
cash 30 (credit)
Alternative journal entry
However, companies would normally like to keep track of the amount of refunds. Instead of using 'sales' with a refund, a different T-account is used:
sales allowances 30 (debit)
cash 30 (credit)
Sales allowances is a contra-T account to sales, and presented jointly in the income statement (sales minus sales allowances is net sales).
For a trading company, there can also be sales returns (physical return of the goods), or a T-account 'sales returns and allowances'
What information is shown in the heading of a financial statement?
The three line heading of an income statement shows/answers who, what, and when.
- Who - the business name that appears.
- What - the report title that appears on the second line.
- When - the period covered appears on the third line.
What are The four subdivisions of owner's equity?
the four subdivision of owner's equity are:
Capitals
Withdrawls
Expenses
Earnings (Revenues)
DO NOT MISTAKEN ACCOUNT PAYABLES & RECEIVABLES AS BEING EXPENSES AND EARNINGS or REVENUES :)
Total Assets = Total liabilities + owner equity
Total Assets = 50% liability + 50% equity
824580 = 824580*50% + 50% owner equity
Owner Equity = 100% total Assets - 50% liability
Owner Equity =824580 - 412290
Owner Equity = 412290
Is a compound entry in the general journal is made to close expense accounts?
A compound entry in a general journal is any entry that has more than one debit or credit value.
A compound entry is used to close the expense accounts because you will need to credit all of the expense accounts, then debit either the Income Summary, or the Capital itself.
Incomplete question.
Why is the owners capital is treated as liabilities?
Owner's is treated as liability to the company/business. this is because ,the owner contribute or say loan the fund to the business to start its opperation and hence produce what to sale/trade and then generate income out of it
Is bad debt a current liability or expense?
Bad debt is expense to reduce the amount of accounts receivable not recoverable from customers.
What is drawing in the balance sheet?
Drawing is that amount which is withdrawn by owners of business from business for personal use during operations of business in one fiscal year.
