Financial Statements

1. Allocate funds according to agreed priorities.

2. Discuss changes in income and expenditure priorities with appropriate colleagues prior to implementation.

3. Consult and inform all relevant personnel in relation to resource decisions.

4. Promote awareness of the importance of budget control.

5. Maintain detailed records of resource allocation in accordance with enterprise control systems.

Estimating Sustainable IncomeWhen evaluating a company, it generally makes sense to eliminate all irregular items inestimating future sustainable income.

To address this dilemma, many trustees and institutions are beginning to distribute what might be called "sustainable income" to the income beneficiary (or to the operating budget of an endowed institution, e.g.). The thinking seems to be that what a donor had in mind when he/she specified "income [or income only]…" is that the donor wanted the income beneficiary to enjoy a long-term, sustainable income stream (perhaps growing to keep up with inflation). A further presumption is that the donor further wanted the principal to be protected against loss (including loss due to inflation) for continual production of income or for eventual distribution/use by the institution.

Current assets are things which have monetary value and could be converted to cash in the short term e.g. stocks, cash, debtors. They would normally be things which could be converted to cash within 6 months. Anything longer than this would be considered a long term asset.

Everything that is immediately involved in the manufacturing process - materials, energy, labour, tooling etc etc etc Indirect are things like space heating, ancillary staff - such as QA/QC, payroll, cleaners, warehousing costs etc etc

yes

cash (100000x5) 500,000

capital stock(100,000x5) 500,0000

Cash Method Accounting This kind of accounting is used when you want to report income and earnings during the period of fiscal accounting. For legal and government entity, September 30 is time of filing and the rest of the companies; it is the end of the year. Cash based accounting means that when you receive the money the sales are recorded right away. The expenses is also recorded when they are paid. Cash based method is good if your income is less than one million and you instantly collect money for your product and service. Ironically the government used this method even if they earn more than trillion dollars. If you choose cash based method accounting, there are a lot of benefits that go with it. Assess first your business because if cash based method can fit your process then you can save money from book keeping. If you don't maintain an inventory or you don't have customer accounts, then cash based method is a good choice because it much cheaper. With this method you can see right away if your business is becoming profitable. Cash based accounting is a very simple method but it can only record cash transactions and doesn't take note about everything else. It can never work for businesses who doesn't credit or offer credit. If your business is not keeping inventory then this is a good choice. With this kind of accounting, there are no account receivable and account payable.

Target Net income = (Target Operating income)-(Target Operating income x Tax rate) Target operating income = (Revenues-Variable costs)- Fixed Costs

Understandability,Consistency,Relevance and Reliability:)

In order to write a fictional journal, one must be able to write as if one were a person writing an actual journal. Understanding of subject matter and style is important.

Yes, they are the same thing. Net earnings is just another word for net income.

There is no affect of depreciation on cash flow that's why in indirect method of cash flow net income is adjusted for depreciation to calculate cash flow from operating activities.

yes

the cash flow is substantially eased due to the presence of Input set off system,

the Output GST liability is dischargeable only on collection basis i.e no collections, no tax payment which also means: payment of tax on collection basis albeit by taking advantage of the input credit available and in effect discharging the net tax liability.

imagine one situation where the expenses are allowed in profit and loss on a yearly basis i.e at the end of the year, further situation is even worse for capital asset items whrein the indirect tax component gets capitalized and thus cash flow easing out only on the basis of depreciation / amortization rate essentially linked to the life/ depreciation policy of the asset (typical examlples are :CVD component is generally allowed as set off, 50% Input credit on capital assets purchases. )

thus,

cash flows are really at ease with GST regime due to following :

1.immediate set off availability from current output tax obligations

2.better cash flow management from utilization of Input credit to honor output tax liability.

3. organisations having fast debtors turnover or good collection period can use the funds for a few days during month (typically in India the obliagation is dischargeable on 5th of the next month during which collection towards goods/ services are received, thus the GST becomes highly fungible for the invoices raises during 1st to 5th or 6th of the next month, the liability of which becomes due in next month only)

4. Manufacturing concerns can accumulate the Input credit and discharge as they receive collections and thus its a stress buster for working capital managers ( as i explained, imagine the entire expense getting capitalized / charged off to revenue and at the year end only being deductible, whereas in this GST regime you can claim input credit from your output GST obligation which itself is payable only on collection basis and getting that much part of expense immediately back!!)

in effect , GST regime is good qua cash flows (even though it adds to doing number juggleries!!)

Think of it this way...you have $200. About 1/4th of it is for housing, so that leaves you will $150. You need heat, air conditioning, lights, and water...subtract another $30. Now you have $120. You need to eat, right...Bang, $50 down the tubes. Which leaves $70. Got to get to work! More money...$25. Leaves $45.

So $45 is all you got to play with. Entertainment, gifts, the whole rest of your life. How would you have known all this if you hadn't made a budget? A budget tells you how much money you can spend AFTER all the necessaries have been paid. Don't forget your retirement...five dollars in the savings account. So you have $40 out of that $200 that you started with. While the $200 sounds excellent...it doesn't sound so good after all the basics are covered.

The Budget can keep you financially afloat in hard times.

Long term

Obama.

Operating Expenses are expenses that are incurred while running a business. Maintenance Expense could be considered anything from the cost of maintaining a company vehicle to repairs made on a building or some other type of "maintenance" that is require by the business in order to function at 100%.

Many expenses have their own account such as, Utilities Expense, Rent Expense, Insurance Expense, Interest Expense, Supply Expense, just to name a few. Other expense may not have a specific account in which to be recorded, such as Travel Expense, Food Expense (perhaps to entertain a possible client), these expense are often listed under "Other Expenses".

Positive Accounting Theory is a branch of academic accounting research. It tries to predict and explain actual accounting practices. It is used to understand how to use accounting practices better.

. Hiran, a retailer, has prepared the following balance sheets for the years ending 31st March 2004 and 2005: Balance Sheets as on 31st March, 2004 and 2005 Particulars 2004 2005 Freehold property at cost 200000 200000 Furniture 32000 Less depreciation 23200 8000 30000 20000 10000 Current Assets: Stock Debtors and prepayments Cash in hand and at bank 36000 50000 4000 34000 34000 2000 Liabilities: Capital Trade and accrued expenses Loan account 254800 24000 20000 260000 20000 ------- Total 298800 280000 Other data: The net profit for the year 2004 was Rs.40000. Hiran is paid a salary of Rs.16,000. His drawings amounted to Rs.45,200. You are required to prepare a statement of changes in financial position, on working capital basis

Profit = income - expense

A startling statement is one that surprises the listener.

Fully Depreciated Assets are reported on the Balance Sheet as always, with one extra account. Accumulated Depreciation. For Example if a company has a Truck that cost $25,000 and it has been fully depreciated, the entries for the Balance Sheet are

Equipment- Truck $25,000

Less Accumulated Depreciation (*****)

Fixed assets remain on the books until said asset is sold, salvaged, or destroyed.

The statement of cash flows is the summary of the major cash receipts and and cash payments for a period such as a month or year.

The statement of cash flows reports a firm's major cash inflows and outflows for a period. It provides useful information about a firm's ability to generate cash from operations, maintain and expand its operating capacity, meet its financial obligations, and pay dividends.