Financial Statements

why is merchandise inventory reversed

As trade-in value of old asset is 8000 which is deducted from price of new asset and actual cash paid to acquire new asset is 122000 so the base value for new asset will be 122000.

general standards

field work of standards

reporting standards

Goodwill is adjusted in cash flow from operating activity as goodwill has no cash attached with it as it is just create due to different reasons other than cash.

traditional approach

No.

We're a question & answers website not a free essay-writer.

Plagiarism is a very serious offence and can get your school grades cancelled.

Preoperative expense is expense incurred before starting operation of business i.e. Commercial operation all expense whether it is salary , fee of engineer , all expense which is necessary to start the operation needs to be capitalized under plant or building or machinery etc. Preliminary & preoperative are different. Preliminary is before incorporation of business while preoperative is after.

Internal Control

Adjusting Trial Balance

Cash is an asset of business and it is shown under current asset of business at asset side of balance sheet.

would consist of prepaid expenses and accrued expenses

It is neither.

An expense is not entered into the Balance Sheet but reduced from the revenue in the Profit and Loss Account to calculate profit.

Note: However, a deferred expenditure (written off by the business over a number of years) is considered to be a fictitious assets until it is paid off. eg. preliminary expenses of a business.

According to experts the difference between sales and turnover is sales refers to the income received from goods and services sold by a business whereas turnover is the income received when businesses trade goods and services.

contigent liability

its important

Sundry creditor is current liability.

Yes, the accounting equation, total assets = total liabilities + total equity, may be rewritten to determine total debt as being equal to total assets - total of owner's equity. Simply stated, the total assets (the firm's value) is broken up between total debt (what you owe) and owner's equity (what you own).

a journal entry must include atleast one debit and one credit account to be a legal journal entry.

Expenses that are not affected by sales volumes are called fixed costs. These costs remain constant regardless of the number of units produced or number of units sold. An example would be the lease on a building. Sales volume may fluctuate but lease payments typically remain constant (as outlined by the lease agreement).

P and L refers to Profit and loss Account and yes its another name for Income statement

Errors not revealed by trial balance?

Balance sheet restructuring is the term used when a company reorganizes its structure to increase profits or to become more organized in its business practices. It may reorganize the ownership structure, the legal structure, or any one of a number of current practices that affect the bottom line.

Taxation Multiplier = - (MPC) / (1 - MPS)

Where, MPC = marginal propensity to consume, and MPS = marginal propensity to save.

Its a miscellaneous small fund usually budgeted for that is to be used for unknown minor items that may occur that you don't have time or need to go thorugh the processes of writing a company check for.

neee