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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
What is the difference between basic and diluted EPS?
In financial reporting two EPS numbers are commonly reported: Basic and Diluted EPS. The Basic EPS is calculated by dividing income available for distribution to common stockholders by the weighted-average number of common shares outstanding. The number calculated this way excludes any possible dilution stemming from outstanding dilutive securities, such as options, warrants, convertible bonds, or convertible preferred stock. Diluted EPS reflects the potential dilution from such dilutive securities. The companies that don't have any dilutive securities, or the companies that report net losses, report only Basic EPS. In case of a net loss, dilutive securities would improve negative EPS and have an anti-dilutive effect. The value of diluted EPS is always lower than basic value and is more relevant in investment decisions, since it indicates somewhat of a worst-case scenario. Refer to International Accounting Standard # 33 for more information.
What are the various limitations of business accounting data?
I would like to know what the limitations of business and accounting data is? I would like to know Accounting as a language of business suffers from which serious limitations?
Give you some examples of selling expense?
Selling expense is any type of expense incurred to try to sell an item. Advertising, holding fees, and the purchase price that you paid for the item are all selling expenses.
Evolution of financial management?
The evolution of financial management can be classified in to three stages:
1. Traditional Stage
2. Transitional Stage
3. Modern Stage
A trial balance is a list and total of all the debit and credit accounts for an entity for a given period (usually a month). The format of the trial balance is a two-column schedule with all the debit balances listed in one column and all the credit balances listed in the other. The trial balance is prepared after all the transactions for the period have been journalized and posted to the general ledge. The key to preparing a trial balance is making sure that all the account balances are listed under the correct column.
What is true and fair view for auditor?
The concept of the 'true and fair view' remained a cornerstone of financial reporting and auditing in the UK; that there had been 'no substantive change in the objectives of an audit and the nature of auditors' responsibilities'; and that the need for professional judgement 'remained central to the work of preparers of accounts and auditors in the UK'.
Expenditures will be treated as revenue expenditures if it is incurred for the following purposes:
Expenditure for purchasing floating assets i.e., assets meant for resale at a profit or for being converted into selling goods, such as the cost of goods, raw materials and stores.
Expenditures incurred by maintaining assets in proper working order e.g., repairs to plant and machinery, building furniture and fittings etc.
Expenditures incurred for meeting day to day expenses of carrying on a business e.g., salaries, rent, rates, taxes, stationery, postage etc.
All revenue expenditures have to be deducted from the income earned by the firm. That is to say, all revenue items will be taken to the profit and loss account.
How do i prepare costsheet How do i prepare costsheet
Are prepaid expenses a liability?
No. They are listed as a debit on the asset side of the Balance Sheet.
What is International Standards on Auditing 260?
Communication of Audit matters with those charged with governance.
How do you use a proof of cash?
A proof of cash is a four-column bank reconciliation that has proof of disbursements and receipts. It is used by auditors when they are looking for errors, fraud, misstatements, and discrepancies.
Due to the after tax cost of a tax-deductible expense can be computed as the actual expense times one minus the tax rate, because a dividend on common stock is not tax-deductible, we say it cost 100 percent of the amount paid. Shannon Coffey Wayne, MI
Direct cost is that cost which is directly attributable to products like material and labor.
Why is it important to know direct and indirect costs?
Fundamentally the process of defining the variable and fixed costs allows management to create a synopsis of the final unit cost. However it is the combination factors of the unit cost multiplied by the total output to be created that will finalize the price point. The flexibility here allows the pricing structure to adjust according to the market actual resistance or expectation.
When the product is seating at the storage until is sold, the same creates addtional cost that must be absorbed by the time it takes to sell. Management decisions and accountants realistic approach to correct the price structure will allow the company to operate in the most profitable manner possible and guaranteeing its sustainability.
Renato Souza - Brazilian Economist 2010 wrensouza@yahoo.com
To add to Renato's thorough response, from a practical point of you, the US government requires you to track direct and indirect costs separately if you have cost-reimbursable contracts with them. The Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS) have very strict standards regarding the tracking of direct costs and allocation of indirect costs among government contracts. Designing your system to do this from the beginning will solve you a lot of headache later if you decide to do business with the federal government.
Mark Goldstein - Government Contracting Consultant
What are the components found in cash flow statement?
following items are included in cash flow statement
1 - cash flow from operating activities
2 - cash flow from investing activities
3 - cash flow from financing activities.
What are the objectives of financial accounting?
The purpose of accounting can be summarized in the following manner:
1. Ascertain the results of operations during a period
2. Ascertain the financial position.
3. Maintaining a control over assets
4. Planning in respect of cash
5. Providing information to tax authorities and other government agencies.
6. To properly match income with expenses.
7. To provide a reliable set of data with which to prepare financial reports for analysis purposes (for owners, lenders, investors, etc).
8. To provide a reliable set of data with which to report income for tax purposes.
What are the accounting journal entries to record an acquisition?
I would like to know how accounting journal entries would differ on acquisition in compliance with IAS a) under pooling interest method b) under purchase mehod Appreciate this is explained in detailed numbers for acquiree & acquirer.
What are examples of juxtaposition?
Juxtaposition refers to the use of dissimilar terms, concepts, or images in order to contrast their varying (or opposite) attributes. This may be used for ironic effect, to create surprise or humor, or to stimulate the imagination.
Some examples of images would be a baby with a machine gun, a caveman using a microwave oven, or a tycoon pushing his limousine (it has run out of gas). Another example would be a billboard for a church placed right next to one advertising nude dancers.
Literary examples may include juxtaposed characters : Romeo and Tybalt, Scrooge and his mentor Mr. Fezziwig, or the two boys in The Prince and the Pauper. Or an event that brings happiness to one character and sadness to another.
Seemingly self-contradictory phrases are called oxymorons, and they are similarly used for their irony. They could include such phrases as happy misfortune, foolish wisdom, or alone in a crowd.
ROA = Net Profit Margin * Asset Turnover Asset Turnover = ROA/Profit Margin = 13.5/5 = 2.7%
Show by example how to prepare a cash flow statement using a balance sheet?
This is pretty tough to do without actually having Excel or images of the balance sheet. The simplest starting point though is to start with net income and then take the difference between the assets and liabilities on the balance sheet. As assets go up, it means you didn't collect the cash or you paid cash to acquire the assets thus cash goes down. Conversely, if liabilities go up it means you didn't pay them so cash goes up. Then vice versa if assets or liabilities go down.
