Financial Statements

Centralized function is very important for any org. Which is decentralized in physically but not in practically means one unit in several parts

Internal Audit:

Their main gig is to assess and improve the effectiveness of risk management, control, and governance processes within the organization. Internal audits can cover a broad spectrum, including financial controls, operational processes, and compliance with company policies. Their goal is to provide constructive feedback to management, helping the organization operate more efficiently and mitigate risks.

External Audit:

Now, external audits are a bit like the annual check-up from your financial doctors. These auditors come from independent firms and scrutinize your financial statements, making sure they present a true and fair view of the company's financial position. External audits are often required by regulatory bodies and provide assurance to stakeholders, like investors and creditors, that the financial information they rely on is reliable.

Go to BlueLogiQ, which can help you with both internal and external audits

Problem 21.3 Super Sonics Entertainment is considering borrowing money at 11 percent and purchasing a machine that costs $350,000. The machine will be depreciated over five years by the straightline method and will be worthless in five years. Super Sonics can lease the machine with the year-end payments of $94,200. The corporate tax rate is 35 percent. Should Super Sonics buy or lease?

The revaluation surplus is a component of equity that arises when a property, plant, or equipment item is revalued to its fair value. When the asset is derecognized, the revaluation surplus can be transferred directly to retained earnings to avoid its accumulation in equity. This transfer ensures that any unrealized gains or losses from revaluations are recognized in the income statement and not carried forward in the balance sheet.

Debit supplies inventory
Credit cash / bank

Liquidity cash flow refers to the ability of a company to generate enough cash to meet its short-term obligations. It represents the movement of cash in and out of a company, including cash from operations, investing activities, and financing activities. Having positive liquidity cash flow is important for a company to ensure it can cover its immediate expenses and maintain financial stability.

Identify and total all operating expenses for the period. Expenses include advertising, marketing, sales representative salaries, sales commissions, professional fees, office supplies etc. Subtract the total operating expenses from gross profit to calculate net loss.

Generally, a merchandiser's major cost is the cost of purchasing inventory or products from suppliers. This cost includes the purchase price of the products, any shipping or transportation fees, and any additional costs associated with bringing the products into the store or warehouse. Other costs may include marketing and advertising expenses, labor costs, and overhead costs.

Corporate governance of compliance is a framework of policies and procedures that are implemented by companies to protect stakeholders' interests. Each policy is designed to adhere to internal controls and avoid conflicts.Ê

The book value of a fixed asset (PP&E) is the difference between the fixed asset account and it's related accumulated depreciation account.

You have a truck you paid $25,000 and you have depreciated it for the amount of $10,000 then the "book value" would be $15,000.

A discounted cash flow is an estimate of what today's dollar will be worth tomorrow basically. All future cash flow can only be estimated. There is a mathematical formula that can be used to figure out if an investment has the potential to make money.

Some organizations only report yearly to evaluate their company's fiscal health. This report includes financial data and other measurements of their company's performance, which are mostly the legal requirements for the company.

Carriage inward refers to the transportation costs incurred by a business when purchasing goods from suppliers. It is added to the cost of inventory and increases the cost of goods sold. Freight inward, on the other hand, refers to the cost of transporting the goods purchased from suppliers to the buyer's location. It is also added to the cost of inventory but is not included in the cost of goods sold.

No, telephone expenses do not go on the income statement. Telephone expenses would be recorded as an operating expense on the income statement under the category of "Communication expenses" or similar designation.

To write off stock in accounting, the journal entries would be to debit the inventory account and credit the expense account, such as "Inventory write-off" or "Loss on inventory write-off." Additionally, if applicable, debiting any allowance for obsolete or damaged inventory account and crediting the inventory account would be necessary. The total debit amount should equal the total credit amount in the journal entry.

If the company is trying to maximize its perceived value, it would report a too small value for its liabilities. This is because lower liabilities would indicate lower financial risk and could make the company more attractive to investors. By understating liabilities, the company may appear to have a stronger financial position, potentially leading to a higher perceived value.

There is not enough information available to definitively determine if Global Cash Flow Network is a scam. It is always important to do thorough research, read reviews, and use your best judgement when evaluating any business opportunity.

The bookkeeping entry for a revenue reserve is a debit to the retained earnings account and a credit to the revenue reserve account. This entry is made to set aside a portion of the profits as reserves for future use or to cover potential losses. By separating the revenue reserve from retained earnings, it allows for better tracking and management of the reserve funds.

The AJE (Adjusting Journal Entry) to release temporarily restricted net assets involves debiting the temporarily restricted net assets account and crediting the unrestricted net assets account. This adjustment is made when the restriction on the funds has been met, allowing them to be used for general operations or other unrestricted purposes.

Depreciation expense in income statment is the entry to reduce the fixed asset and charge to income statement of fiscal year in which asset is use to earn revenue while accumulated depreciation in balance sheet records that how much depreciation charged from start to till date.

Important entries in profit and loss account are.....

1. Depreciation

2. Bad Debts

3. Interest on capital & drawings

4. Prepaid expenses

5. outstanding expenses ......etc

Advertising expense typically appears as a separate line item under the "Selling, General, and Administrative Expenses" (SG&A) section on an income statement. It represents the costs incurred by a company to promote its products or services to customers. The specific placement may vary slightly depending on the accounting practices followed by the company.

The main three methods uses are

Straight-Line Method

Declining Balance Method

Double Declining Balance Method

The Straight Line Method provides the same amount of depreciation for each year of the fixed assets life.

The Declining Balance Method involves applying the depreciation rate (%) against the depreciated balance of the fixed asset each year for the life of the asset.

The Double Declining Balance Method is similar to Straight-Line Method on steroids. It's also similar to the Declining Balance Method as it too uses the undepreciated balance of the fixed asset each year, however the depreciation rate is double that of Straight-Line.

For example.

If straight-line has a declining balance rate of 15% annually, double declining will be just what it says DOUBLE 30%

Let me give you fast explanation of these three with a short example.

Say you have a $10,000 fixed asset that you want to depreciate fully over the next five years with no salvage (or residual) value.

Straight line method the depreciation would be $2,000 every year for 5 years, this would not change.

Declining Balance however would change, the first year of depreciation would be $3,000. The second year would be based on the depreciated amount of the fixed asset or ($10,000 - $3,000 = $7,000) we then figure the depreciation on $7,000 to get $2,100. This continues until the asset is fully depreciated.

Double Declining uses a combination of both, the first year of depreciation would literally be double what straight line uses making this one $4,000. The next years depreciation is figured by using the balance of the fixed asset or ($10,000 - $4,000 = $6, 000) giving us a depreciation of $2,400. This cycle also continues until the asset is fully depreciated.