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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
Does the statement of cash flows consist of three sections?
Yes it consists of three sections as follows:
- Cash flow from operating activities
- Cash flow from investing activities
- Cash flow from financing activities.
Yes, it contains three sections. These are the Operating, Investing and Financing Activities.
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Why are income statement accounts called temporary accounts?
All items in income statements are temporary accounts because at the year end all close to income summary account and transfer to balance sheet in shape of profit or loss to be income statement starts with zero from next year.
What is the statement helps to avoid cash shortage?
statement that helps to avoid cash shortages is called
Is dividend paid an expense in income statement?
No a dividend is not an expense. It is generally a reduction of retained earnings in the equity section of the balance sheet.
Is director's remuneration an expenses in income statement?
Directors remuneration is part of income statement and also expense of business but required to be shown as separate item.
Is a building considered asset liability or owners equity?
Building is an asset of business by utilizing which company earns revenue to pay all liabilities and owner's capital.
Why are increase in accounts receivable a cash reduction on the flow statement?
Increase in accounts receivable causes the reduction in cash because if sales are made on cash then there is no increase in accounts receivable and company receives cash which causes the increase in cash while accounts receivable not.
What happens when you record a journel entry for a sale?
When you record a journal entry for a sale, you typically debit the cash or accounts receivable account to reflect the increase in assets from the sale. Simultaneously, you credit the sales revenue account to recognize the income generated from the transaction. If applicable, you may also need to account for sales tax by recording a liability. This entry ensures that your financial statements accurately reflect the transaction and maintain the accounting equation.
Yes prepaid rent is rent paid in advance and as normally it is for short term or for one fiscal year that's why it is shown under current assets.
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What are the columns of general journal?
General ledger has the following columns:
- Date
- Explanation
- Cash Debit
- Accounts Receivable(Credit)
- Sales(Credit)
- Other credits
- Folio
- Accounts Title
Is bank interest payable credit or debit?
All kind of payables have a credit balance as a default or normal balance. So by following this rule, bank interest payable also has a credit balance as normal balance.
The best way in SPSS to find out the strength of the relationship between the financial trends of a bank and the industry using financial statement items is to use the determinants of Bank Profitability.
What needs to happen when recording a journal entry for a sale account?
When recording a journal entry for a sales account, ensure that the sales are strictly done on credit terms.
What are retained earnings used for?
Retained earnings are used for future business requirements like purchase of assets or further investment in business etc.
Which statements supports single sourcing?
Single sourcing is supported by statements that emphasize efficiency and streamlined processes, as it allows for centralized decision-making and reduces the complexity of managing multiple suppliers. It can lead to stronger supplier relationships, better communication, and improved quality control due to consistent collaboration. Additionally, single sourcing can result in cost savings through bulk purchasing and minimized administrative overhead.
1,000 and 100.50
Does drawings go onto the income statement?
Drawings is a contra account to owner’s capital which is used for owners withdrawals from business so it is not part of income statement rather it is part of balance sheet and shown as a deduction from owner’s capital.
How would you use the balance sheet to evaluate your company's financial condition?
what nc state captial
Does prepaid rent goes on income statement?
Prepaid rent is that amount which is paid in advance but benefit of which is not yet taken by business so it is current asset of business and like all current assets it is also shown under asset side of balance sheet and not in income statement.
cash flow statement
To whom is the statement of cash flow useful?
Auditors, accountants, investors, management, business owners.
Is the ability to manage finances based on informed decisions called financial intelligence?
Overall, that basically covers it. There are four parts to financial intelligence.
Understanding the foundation: Basic understanding of things like cash flow, income statements, and balance sheets.
Understanding the art: Knowing that applying the same numbers in different ways can cause different outcomes.
Understanding analysis: Being able to understand not only the numbers, but what they mean and how they work. This would include things like being able to calculate profit.
Understanding the big picture: Having an understanding of how your results fit into other areas, like the national economy, and how they compare to others in the same situation, like a company's competitors.
