Financial Statements

There are several different ways to make a personal budget. The best way is to make a spreadsheet. People can use Microsoft Excel. If they do not have access to this program, they can use Open Office. The advantages of using this program is that it is free. Plus people can use formulas to make calculations.

While preparing cash flow statment using indirect method, non-cash expenses are added back to net income because in net income these expenses were deducted to arrive at net income while there is no cash inflow or outflow from these activities so that's why to arrive cash flow from operating activities these items are added back to arrive at cash flow from operations.

All income and expenditure accounts are closed at Year End. and the balance is is shown on the Balance Sheet at Year end.

The Capital Redemption Reserve is a fund that secures a creditor. Debenture Redemption Reserve is for the purpose of security payments only.

The Independence Company had the following manufacturing data for the year 2006 (in thousands

of dollars).

Beginning and ending inventory 0

Direct materials used 400

Direct labor 330

Supplies 20

Utilities variable portion 40

Utilities fixed portion 12

indirect labor variables 90

indirect labor fixed 40

Depreciation 200

Property taxes 20

Supervisory salaries 50

Selling Exp. were $300,000 (including $60,000 that were variable ) and general admin exp. were $144,000 (including $23,000 that were variable) . Sales were 1.3 million Direct labor and supplies are regarded as variable cost.

1. Prepare two income statements, one using the contribution approach and one using the absorption

approach.

2. Suppose that all variable costs fluctuate directly in proportion to sales and that fixed costs are

unaffected over a very wide range of sales. What would operating income have been if sales had

been $2.0 million instead of $1.8 million? Which income statement did you use to help obtain

your answer? Why?

debit interest expense, credit interest payable for the accrued amount

Depreciation is an expense and like all other expenses which causes the reduction in profit depreciation is also cause of reduction of profit as formula shows below:

Profit = Revenue - expenses

An account payable is a liability and would be considered a credit. Remember liabilities maintain a credit balance. Even when listing on the Trial Balance, all liabilities (including accounts payable) will be shown as their actual type, hence account payable is a credit.

gross profit divided by sales Sales = 250000 Cost = 100000 gross profit = 150000 150000 / 250000 = 60%

Cash flow is any money that comes into or goes out of a business. A negative cash flow would represent debt or a lack of profit for a company. This can be a red flag to creditors.

A Bank reconciliation exists to compare accounting records and what is in a person's bank statement. This is to help the bank make sure there are no discrepancies in the bank account including checks not written properly.

if you have a asset and you sale it and then money which you get pay as a liability so decreas in asset and decreas in liability occurs.

Capital (or equity) is considered a liability because capital (equity) represents an obligation owed to shareholders by the company. While the shareholders are not able to "call" their liability (like debtholders are), the obligation exists regardless.

Yes it is the formula for calculating return on total assets as follows:

Return on total asssets = Net income / total assets * 100

i just figured it out. So, I'll help you. Literrally, but had my search results up.

Dr. Cash

Dr. Sales Discount

Cr. Tax Payable

Cr. Sales Revenue

Dr. = Cr.

Contribution margin income statement differs in this way that it only deduct the variable cost from sales to point out that how much is any unit of product is contributing towards recovery of fixed cost while normal income statement don't show this information.

Petty cash is also Cash so like other cash account it is also shown in balance sheet.

If I remember this correctly these are

Statement of Cash Flows

Income Statement

Statement of Retained Earnings

Balance Sheet

cash flows from operating activities

It depends on the financial statement. Generally speaking, a Profit-and-Loss statement will show how much money a business (or individual) made versus how much money was expended. A Balance statement shows what assets a business (or individual) has versus what liabilities it has. While these aren't the only two financial statements a business (or individual) could have, these are the main ones. They are important in documenting how successful (in terms of profit) a business or individual is at the point of the statements were created.

Sure. If you own that account, you can easily check your account balance by

a. visiting your bank branch or

b. using your ATM card at your banks ATM Machine or

c. call up customer care or

d. use internet banking

It shows the net worth of the business in terms of assets ie the value of the assets minus the value of the liabilities.

simply because they report the financial statement to the user

When the money for the loan is received it is recorded as cash. Payments are not recorded until the actual payments are sent out. This will be recorded as a debit to a loan expense account and credited directly to cash. The interest is debited directly to an interest expense account and credited directly to cash for the same payment. A compound entry can be used for this purpose. There is no loan payable or interest payable accounts for cash basis accounting.