Financial Statements

Earning per share = Net income / average shareholders equity

The agreement of the two sides of the trail balances, though of prima facie test of arithmetical accuracy, is not a conclusive or absolute proof of the accuracy of the entries in the books of original entry and their postings to the ledger. In other words, the trial balance may agree without disclosing certain errors. The following classes of errors are not disclosed by the trial balance:

1. Errors of omission: When a transaction is not recorded at all or partially recorded in the book of original entry, both its debit and credit aspects would be omitted. The trail balance, therefore, is not affected. Similar results follow when one or more transactions are recorded twice in the subsidiary books.

2. Errors in the book(s) of original entry: The trial balance would not be affected it an entry is in a wrong book of original entry or entered in the proper subsidiary book but with a wrong amount. In both these cases, the debit and credit accounts are affected equally and thus will not disturb the agreement of the trail balance.

Examples: (a) An item of credit sales wrongly entered in the purchases book. The item will have wrong debit and a corresponding wrong credit. (b) An items of credit purchases for Rs. 115 wrongly entered in the purchases book as Rs. 151. In this case both the purchases account and the account of the supplier are affected to the same extent.

3. Errors of commissions: Such errors consist of entries of the transactions in a wrong account of the same class. It means the posting of an item is made to the correct side (debit or credit) but of wrong account. e.g., debiting or crediting R.N. Tiwari's Account instead of A.N. Tiwari's Account.

4. Errors of Principle: An item of nominal account entered into a real account or vice versa. In such a case the amount received or spent is wrongly recorded in a wrong class of account. For example a sum of Rs.50 paid on the repairs of furniture is debited to furniture account and not repairs account The errors of principle do not affect the agreement of the trial balance because they are correctly recorded so far as the debit or credit of the wrong class of account is concerned. It would be noticed that such an error arises. Through lack of knowledge of principle of accountancy.

5. Compensatory errors: These errors, also called self-balancing or equalizing errors, do not affect the agreement of the trail balance because errors on one side of the ledger account are compensated by errors of the same amounts on the other side e.g., Praveen's account debited with Rs. 150 instead of Rs. 120 and Bindiya's account with Rs. 200 instead of Rs. 230.

Compensating errors also arise when under-postings on one side are counter balanced by over-postings on the same side. e.g. Amitab's account credited with Rs. 500 instead of Rs. 600; Sanjeev's account credited with Rs. 60 instead of Rs.100 and Nirmal's account credited with Rs. 150 instead of Rs.110. Here the first error of under-credit of Rs. 100 is covered by second and third errors of over-credit of Rs. 60 and Rs. 40 respectively.

Provisional entries are made to account for future expenses or foreseen future losses. we will record these provisional entry by, initially debiting Expence account and crediting provision account. when provision is released, we debit the provision account and credit the Expenses account.

edit

debit

40 percent

Yes and no. When a company purchases a fixed asset it is expensed through depreciation over the useful life of the asset.

The use of acquisition cost less depreciation in valuing an asset on the balance sheet is the logical result of the __________ accounting convention.

Depreciation or accumulated depreciation is deducted from related assets in balance sheet to show the net book value of asset.

ya

Normally, BO means "Back Order".

true

Financial statements of companies requires to show only assets or liability legally owned by company so those assets or liabilities which legally not owned is not company's assets or liabilities that's why not shown.

[Debit] Accumulated Depreciation

[Debit] Cash (If any)

[Debit] Loss on disposal (if any)

Credit Asset

Credit Profit of disposal of asset (if any)

indirect method is that method in which net income from income statement is adjusted for non cash items like deprecation to arrive at actual cash flow from operating activities.

GAAP is an acronym for Generally Accepted Accounting Principles

Debit Accumulated Depreciation and Credit the Fixed Asset account for the capitalized value; however, if you still own the asset, you should not remove it.

Income

Sales

yes

Accountants, usually

In todays world, that can be answered easily--No. But to get more technical, the general things that banks will lend money for are:

Starting a business (Companies such as SBA etc exist to help Small business owners going as well)

Getting a loan on a car

Loan on a house

Loans for things such as Jewelry, lines of credit etc are usually done through the company itself and you apply for a loan when going to make the purchase. It's largely like a credit card rather than an actual loan that you just pay off after X amount of months/years.

Also, getting a loan these days is a very hard thing to do. You need to have very good credit in most cases, especially when applying for financing on a car. And you also need to probably bring a co-signer with you that has good credit.

The second word of "Human Resources" should give you a clue that is considered an asset. Companies that consider their employees to be an asset invest in those employees through training, education, benefits and other compensation and expect to get a return on that investment (ie production). Human Resources is the source of the human asset, the place where managers go when they need a qualified individual to do a job, or a training program developed. Conversely, if an employee is considered a liability to the company, they probably (and shouldn't) remain employed for very long.

a topic state ment of needs is never to expect any thing in return.

Depreciation reduces the amount of profit or increases the overall expenses due to which profit also reduce and that's why less tax to be paid that's is why depreciation is called shield to reduce tax.