Financial Statements

Accounts Receivable - DR Bad Debts written off - CR

Bank Fees DR.

Normal Expesnes Accrual Account Cr.

It depends on the kind of discount and agreement that has been agreed upon in the sale transaction. Here is an example of a journal entry for discount for a normal credit sale transaction:

Accounts receivable 9000 (dr)

Discount from sale 500 (dr)

Sales 9500 (cr)

Net worth = Total Assets - Total liabilities

It is the remaining amount which is net worth for owners.

Venezuela is an oil producing country; one of the largest in the world. Nearly half of Venezuelan incomes come from oil.

Because Assets equal to Liabilities plus Capital: ASSETS= LIABILITIES + CAPITAL

This is a Mathematical equation, try to figure it out by your own.

yes, it is trustworthy

A=L+E

always

Accrued Revenues are those revenues which have earned by the company but not yet recieved. Accrued revenue is shown under current assets in balance sheet

External Users:

1 - Potential Investors

2 - Banks

3 - Financial Institutions

4 - Governament

5 - Creditors

6 - Suppliers

Internal Users

1 - Employees

2 - Management

3 - Share holders etc

Finance are the reason for financial statements. Without financial information, financial statements can't be created. Investors use this information to make decisions about investing in a business.

sources of fund means from where the capital we are getting & source of fund means how we can get the capital.

It is non cash since you credit the inventory account rather than cash.

closing entry of an asset means the adjustment entry we do on the last day of accounting year.

yes

NO! The accounting equation is

Assets = Liability + Owners Equity

Therefore if you want to change the formula around the following would be correct.

Liability = Assets - Owners Equity

or

Owners Equity = Assets - Liabilities

Profit and Loss A/c:
Profit and loss account as name describes prepares to determine the net profit earned by company in one accounting year and which is not available information in any other financial statement of company.

The objectives of any accounting is to show the financial standing of a business at any given point in time.

The accounting standard is set to insure that businesses use the exact same method of computing their assets, liabilities, and owners equity. It insures that companies use the same standards and therefore helps to keep businesses from padding their "statements" by using whatever standards or practices they choose.

=Profit Margin, but the question to you what if COGS=Sales what this means?

or in other words what does it mean having Profit Margin=0?

Control over your cash is important because you won't overspend. If you overspend, it could lead to you bouncing checks.

Because of accrual accounting. Wikipedia accrual vs. cash basis of accounting.

You make sales on credit, but haven't collected cash yet.
NI goes up, but A/R goes up instead of cash.

You have earnings but no cash.

This ratio refers how much amount invested for fixed assets from equity. Formula for

calulating this ration:-

Fixed Assets/Equity(Capital+Reserves+Other accumilated Profits)

If the Ratio is .75 ie 75%of Equity spend for Fixed Assets, Hence we

can calculate working Capital of the Company

breakeven point

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