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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
Which inventory gets into the balance sheets- opening or closing inventory?
Since it is the balance sheet, which is generally prepared at the "end" of a financial period, it would be your closing inventory that goes onto the balance sheet.
Once you have made all your adjusting entries and closing of accounts you prepare a Post Closing Trial Balance to check that all accounts remained balance. Since it is the "end" of the year and you are "closing" your books for the Fiscal Year, all adjusting entries are made, this includes taking inventory to get your closing inventory which goes onto your Post Closing Trial Balance and on your Balance Sheet.
Does cash go in an income statement?
Cash is not any income or cash in accrual based accounting system so it is not part of income statement rather it is an asset for business and shown under asset side in current asset portion.
Revenues are reported on the income statement in the period in which they are earned.
What does the mean of negative balance in cash flow from investing?
1. It means that company has more cash outflows from investing activities in comparison to cash inflows from investing activities at any specific time period. If it has more cash inflows the balance will be positive and vice versa.
When revenue normally recognized for financial reporting?
What includes the horizontal analysis of comparative statement?
In Horizontal analysis of statements companies tries to compare its financial statements with competitors to see that how well or bad they have performed.
Why is hierarchy of generally accepted accounting principles needed?
Accounting and financial reporting guidance is provided not only by the two major accounting standards-setting bodies, but also by the AICPA, the staffs of the accounting standards-setting bodies, and even professional literature. Because of the heavy workloads of the standards-setting bodies, they may not have issued guidance on a particular issue of concern to a practitioner. A hierarchy of generally accepted accounting principles allows a practitioner to look to the guidance of other bodies in the event the Board with jurisdiction has not issued a standard on a particular matter.
Does inventory go on a balance sheet?
Yes inventory is part of current assets portion of balance sheet as it is usable in current fiscal year for revenue generation.
What financial statement primarily focuses on profitability?
The statement of comprehensive income, or the profit and loss account. Sometimes it's called the income statement.
But they all mean the same thing - they show revenues minus expenses, giving a final net profit.
And usually you will see last year's figures as well, enabling you to compare how well a business has done since last year.
Where does Trade accounts payable go balance sheet or income statement?
Trade payables, or accounts payable, are categorised under Current Liabilities in the balance sheet.
What do you mean by Income and Expenditure account?
An account that says what you get and what you waste. When you get more than you waste you have a positive balance. When you waste more than you get you fall onto the red mark.
Who uses summary reports of the financial activities of a business?
Accountants and financial directors
What is the difference between a cash budget and a budgeted profit and loss account?
Cash budget estimates the cash inflows and outflows and net cash available for specific period while budgeted profit and loss is the estimated statatement for planning purpose before actual activity starts.
Is income statement same as financial statement?
no.
income statement is a only a statement in financial statements.
What is the most common and important financial statements?
Following are the most common and important financial statements:
1 - Income statement
2 - Balance sheet
3 - Cash flow statement
Is depreciation on balance sheet or income statement?
Depreciation on the income statement is the amount of depreciation expense that is appropriate for the period of time indicated in the heading of the income statement. The depreciation reported on the balance sheet is the accumulated or the cumulative total amount of depreciation that has been reported as expense on the income statement from the time the assets were acquired until the date of the balance sheet.
Let’s illustrate the difference with an example. A company has only one depreciable asset that was acquired three years ago at a cost of $120,000. The asset is expected to have a useful life of 10 years and no salvage value. The company uses straight-line depreciation on its monthly financial statements. In the asset’s 36th month of service, the monthly income statement will report depreciation expense of $1,000. On the balance sheet dated as of the last day of the 36th month, accumulated depreciation will be reported as $36,000. In the 37th month, the income statement will report $1,000 of depreciation expense. At the end of the 37th month, the balance sheet will report accumulated depreciation of $37,000.
How does income and expenses account difference from Profit and Loss Account?
Income and expense for not for profit organisations is same as profit and loss account but they cannot use the name profit and loss account because not for profit organisations are not formed to earn profit.
Are consolidated and comparative balance sheet same?
1. Comparative balance sheet means to use balance sheet of the competitors with base company to compare that how the company in evaluation is performing against its competitors while consolidated balance sheet is prepared when there is parent and subsidiary companies relationship exists and all the information of parent company as well as the subsidiary companies is shown within one financial statement.
HOW does a balance sheet tally?
Balance sheet tallies all of the assets, liabilities and capital accounts of a financial entity - could be a business enterprise or your own personal financial status. The balance sheet is formally known as the statement of financial position. It is a snapshot of the financial position of an economic entity on any given day. On a balance sheet the total of all assets are equal to the sum of all liabilities and capital. The accounting equation is Assets = Liabilities + Capital. It is a restatement of the algebraic equation Assets minus Liabilities equals Capital.
What is the difference between cost of good sold and cost of good sold statement?
Cost of goods sold is the total cost incurred for goods manufacturing while cost of goods sold statement is the document which shows the calculation of cost of goods sold.
Does administrative expenses appear on the income statement?
Yes administration expenses are part of income statmetn as without administration expenses general day to day business activities cannot be run smoothly.
