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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
entry to this would be
plant account dr 5600
to suspense account 5600
in this entry we had to debit plat's account by rs 2800 but we had credited it by rs 2800 so
we will debit plant's account by rs 5600 with suspense
It is false that the book value of a fixed asset reported on the balance sheet represents its market value on that date. Fixed assets are also known as tangible assets.
What affect does an increase or decrease in accounts payable have on the statement of cash flow?
It effects in working capital changes in cash flow
Advantages and disadvantages of cost-volume-profit analysis?
A key advantage to cost-volume-profit analysis is the fact that it allows managers to more easily answer questions and provides details of company activity. A large drawback is the fact that CVP is limited to its amount of information it can provide.
Difference between cash forecasts and cash flow statements?
Cash forecast is a forecasting activity in which future is predicted while in cash flow statement only cash inflows and outflows are shown which are already done.
cash flow from financing means all those transactions related to cash inflow or out flow of share capital in business or purchase of assets.
What is Dividends received in cash flows statement?
Dividend received is the amount received by company from investing in other companies and shows in cash flows from investing activities.
What are the example of non current assets?
non current assets are like land, building machinery premises etc
Diferentiate between internal check and internal audit?
Difference between internal check and internal audit.
Following are the main differences between internal check system and internal audit system:
1. Way of checking â€" In internal check system work is automatically checked whereas in internal audit system work is checked specially.
2. Cost involvement â€" in internal check system checking is done when the work is being done. Mistake can be checked at an early stage in internal check system.
3. Thrust of system â€" Thrust of internal check system is to prevent the errors and whereas the thrust of internal audit system is to detect the errors and frauds.
4. Time of checking â€" In internal check system checking is done when the work is being done whereas in internal audit system work is checked after it is done. Mistakes can be checked at an early stage in internal check system.
What is the importance of the trial balance in the preperation of a financial statement?
Trail balance is such statement that include balances of everything like assets, liabilities, capital, loans and material purchased as well as sold & exp. both direct and indirect. since because of not having much time , we can not make B/S daily , so to know the financial position of business and accuracy of accounting we make T/B on daily
What is the normal balance of owners equity?
This account increases with a debit entry, decreases with a credit entry and maintains a normal debit balance.
How do you report a change in accounting estimate?
The changes in accounting estimates are known to be as Contra Asset Accounts. These are negative asset accounts by nature. They are deducted from the actual book value of an asset at the end of a fiscal period. The amount left over after the deduction is known to be a net book value of that particular asset. This net book value helps a company realize a profit or loss when that particular asset is sold out. The contra asset account is presented under the asset on the balance sheet. The amount credited while reporting a change is a mere estimation which is calculated by the method adopted by the company.
Examples of those methods could be:
- Straight Line Method - Depreciation
- Double Declining Balance - Depreciation
- Days Outstanding - Allowance for Doubtful Accounts
- Percentage of Accounts Receivable - Allowance for Doubtful Accounts
The cost of a depreciable asset less accumulated depreciation reflects the book value of the asset?
true
Gains and Losses associated with events that are both unusual and infrequent are reported as?
Gains and losses associated with events that are unusual and infrequent are reported as gains and losses on an income statement. If not unusual and infrequent, it remains in the main section of the income statement.
It forecasts sales and then expresses the various income statement items as percentage of projected sales. It assumes that the firm's cost and expenses are variable. This approach implies that the firm will not receive the benefit that result from fixed costs, when sales are increasing. There for profits can be understated with sales is increasing, but overstates profits when sales are decreasing. Depending on which way you look at it, tax break, or making the company look profitable this can be
An enity has assets of 750 and liabilities of 250 what would their equity be?
Basic Accounting Ratio
Assets = Liabilities + Equity
So
Equity = Assets - Liability
and
Equity = 750 - 250
Equity = 500
income summary
Is depreciation included as a cash flow in capital budgeting?
No depreciation is not included as depreciation is allocation of part of assets cost to income statement while in capital budgeting, full cost of asset is already included so if depreciation will also be included then there would be double counting of same asset.
