0
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 are the two ways you can account for ending inventory and cost of goods sold?
Following are two ways:
1 - LIFO
2 - FIFO
Can you reduce fixed expenses to improve your cash flow?
It may or may not be possible to reduce fixed expenses to improve your cash flow. In general, fixed expenses buy things that you need. You pay rent on an office, but your business does need an office. But maybe it doesn't. Can you run your business from home? Some small businesses can be run from home, others require more space or special facilities for manufacturing and so forth. If you have a larger business, it is unlikely that it can be run from home, but it is still possible that the offices you are using are more expensive than what you really need. Maybe you can move to smaller offices. Or maybe you can't. All of this depends upon your specific circumstances.
What is the journal entry to record sale of donated assets?
[Debit] Cash / bank xxxx
[Credit] Sale of donated asset xxxx
Journal Entries are used to record accounting transactions. blady bastered............
Does opening balance is equal with ending balance on trial balance?
Sometimes it might, depending on the account. Most often account balances change during the year though.
Is rent collected in advance a temporary account?
The account that you would put this rent collection in is generaly called "Un-Earned Rent Revenue". At the end of the period, you have to close these accounts. So yes, it is a temporary account.
A quick explanation why:
- There are two main types of accounting:
1. Accrual - expenses and revnues are recongisd when they ACTUALLY happen.
2. Cash based - expenses and revenues are recognised when they are PAID.
- Because of this there are "timing differences" which may occur, which can be classified as:
1. Acrued revenue - rev. recognised BEFORE cash is received.
2. Accrued expense - exp. recognised BEEFORE cash is paid.
3. Deferred revenue - rev. recognised AFTER cash is received.
4. Deferred expense - exp. recognised AFTER cash is paid.
-In the case of our rent collected in advance, this is where you have collected the money for a service before you have given it. This unnearned revenue is a DEFERRED REVENUE which is a LIABILITY account.
If you want more info - have a look at accountinginfo.com/study/accrual-101.htm
WhAT is a term for the value at which an asset is reported on a financial statement?
Assets are usually recorded at FAIR value, but they might also be reported at carrying amount, purchase price, market price etc etc etc. Different names, different values, but usually fair value is the way to go!
Is retain earning account is equal to profit or loss?
Profits and losses are determined via the income statement. When you close out the books for the year that profit or loss gets closed and becomes part of the retained earnings. A loss would decrease retained earning and a profit would increase it. Loosely put, the retained earnings account is a cummulation of all the profits and losses over the years (not counting any other things that affect the bottom line like dividends paid out and such)
What is owners equity decreased by?
Owner Equity decreased by:
- Reduction in asset value without reduction in liability
- Owners drawings
- Net loss for current period.
Are Intangible assets reported in balance sheets?
Yes, All intangible as well as tangible assets are shown in balance sheet of business.
What is the difference between net cash provided by operating activities and net income?
Net income included the non cash items as well while in net cash from operations only cash items are included and net income is adjusted for non cash items.
Which side of trial balance you write drawings?
Withdrawals are recorded on the credit side of the trial balance.
How do you calculate sales with cost of goods sold?
Cost of good by sales can b calculated by many diffrent ways first you see whats given in question. 1)If only sales and gross profit is given then (sales-gross profit) formula wil be applicable and the net figure wil be cost of goods sold. 2)If purchases,opening stock,closing stock and direct expenses are given then (opening stock purchases direct expenses-closing stock) net figure is cost of goods sold. 3)If only sales and %tage of profit is given (a)on sales then profit is calculated and is deducted from sales which gives cost of goods sold (b)on COGS then if 1/4 th is profit on COGS then it is assumed that it will be 1/5 th on sales n similarly if 1/3th on COGS it will be 1/4th on sales and after calculating profit it is deducted from sales and net figure is COGS.
Standards provide international commonality among businesses so as to allow for fair business dealings.
Must audited financial statements be signed by the auditor?
Yes audited financial statements are jointly signed by auditors as well as management of company as an acknowledgment.
How do provisions affect the cash flow statement?
1. Mary Malone opens her owner law office on july 1 2008. During the first month of operations, the following transactions occurred:
1. Invested $15 000 in cash in the law practice.
2. Paid $800 for july rent on office space
3. Purchase office equipment on account,$300.
4. Rendered legal service to client for cash,$1,500.
5. Borrowed $700 cash from a bank on a note payable.
6. Rendered legal service to client on account,$2,000.
7. Paid monthly expenses: $500,utilities,$300,and telephone,$100. Question:
a. Prepare tabular summary og the transaction.
b. Prepare income statement at july 31 for Mary Malone,Attorney at law.
2.Select transaction for L.Visser,an interior decoration,in her first month of business,are as follows:
Jan 2 Invested $8,00 cash in business.
3 Purchase used car for #4,000 cash for use in business.
9 Purchase supplies in account for $500.
11 Billed customers $1,800 for service performed.
16 Paid $200 cash for advertising start of business.
20 Received $700 cash from customers billed on January 11.
23 Paid creditor $300 cash account.
28 withdrew $500 cash for personal use of awner
Question
Journalize the transactions using journal
What decreases an asset and liability?
Decrease in asset means being using of it decreases and liability decrease means payable of debts decreases.
Why does profit not equal cash flow?
Cash flow and profit are two different concepts.
Profit includes non-cash items such as amounts owed by customers but not yet turned into cash (i.e., not yet paid by the customers). Profit is also net of debts currently owed by the company by not yet paid out in cash by the company (i.e. its accounts payable).
Cash flow simply tracks the movement of cash (actual money) when received and paid out by a company, regardless of whether income was earned or expenses incurred.
Why bonus issue is not included in the cash flow statement?
As no cash is received, like when the first time a company goes IPO or issues rights shares.
Why does a record keeper prepare a trial balance?
A record keeper at the time of preparing trial balance balances(n totals) all the ledger a/c and transfer the balancing figure to the respective dr. and cr. columns of trail balance.
In this way he finds the accuracy as the totals of dr. and cr. columns are equal and if not then some error exists in recording or posting entries
