Financial Statements

The trial balance is the process of totaling all Debits & Credits in your chart of accounts (General Ledger), then making sure the sum of all debits are equal to the sum of all credits. The Trial Balance is a vital step in the accounting cycle, being the "first" step in the "end of accounting period process."

A trial balance is the accounting statement of balance sheet and revenue and expense statement before adjustments for accuracy and reasonableness.

The next steps in the closing of the books are Adjusted Trial Balance and Post Closing Trial Balance.

Take your gross income (revenues) over the period in question, usually one year, and then subtract all the expenses you had in order to earn that income. This will bring you down to a net income...on the income statement. There is no net income on the balance sheet per se. You net income from the income statement hits the balance sheet when you close out the books for the year. Then it moves over to the retained earnings segment in the balance sheet.

Total equity does not include total liabilities so both are not same

Cash items in the cash flow statement encompasses all items that can be categorised under cash and cash equivalent. these include cash, bank, bank overdraft, short term investment.

· This is often a very difficult idea to understand but, in reality, it is very simple. When a business makes a profit and it does not spend it, it keeps it - and accountants call profits that are kept and not spent retained profits. That's all. The retained profit is then available to use within the business to help with buying new machinery, vehicles, computers and so on or developing the business in any other way. Retained profits are also kept if the owners think that they may have difficulties in the future so they save them for a rainy day!

A long-term investment is considered a long-term asset, because a firm expects a probable future economic benefit to result from it.

An accountant is responsible for the higher function of designing where necessary, improving or modifying the system of accounts. Accountant supervise and coordinates the work of the book keeper, staff, writes up more important private and impersonal accounts and prepares the annual profit and loss accounts and balance sheet.

Accountant also interprets such accounts, prepares statistical and financial data, there from and advises the proprietors of business generally, on all the higher and more important aspects of accountancy and finance.

assets or resources, money or money worth available to an organisation in doing business

The function of the International Accounting Standards Board is to oversee the doings of Accountants and businesses worldwide. The Board handles the functions of in house police over companies and individuals that come under their purview.

Check for the two most common errors:Take the difference between the debits and credits and divide by half. If that number is one of the numbers in the entry, it may be posted on the wrong side of the entry. For example, if there should be a debit for $27 but it was posted as a credit of $27, the difference would be $54.If the difference between the debits and credits can be exactly divided by 9, you may have a transposition. For example, if the entry should have been $329 but was posted as $392, the difference is $63 which can be divided by 9.Then, Look for a missing entry in the amount of the difference between the debits and credits.Beyond that, you need to recalculate each number in the entry.

sales are part of income statement and not shown in balance sheet.

there are many four qualitative factors that can be used in evaluating financiial statements.

information in the financial statements must have the qualities of relevance, reliability, understandability and comparability. other factors may include materiability and faithful representation

hope this answers your question

No, Cash does not go on the Income Statement. The Income Statement is just that a statement to show the company's Net Profit or Net Loss. The accounts used on the Income Statement are Revenue (Income) and Expenses.

For example, if we are a company and we have sales of $5,000 for the period ending (usually monthly), this goes in our Revenue Account (Income) and is listed on the Income Statement. We then List all expense, these include such expenses as Rent Expense, Income Tax Expense, Wage Expense (salaries), and so on.

our Revenue minus these expenses gives us our Net Profit (Net Loss if expense are more than Revenue)

The cash account does not affect the Income Statement. Cash is listed on all Trial Balance Sheets, The Balance Sheet. It is not used on either the Income Statement or Statement of Retained Earnings.

whenever net loss is done we shown assets side under head miscelenious asets to written off

income statement

Cash flow statment is required to find out how much cash inflow and outflow is from operating, financing and investing activities company has earned and this information is not provided by any other financial statment.

because the inside column on financial statements is used for subtotaling

verga

A journal records what you're findings are

If you are doing adjusting entries, an accrued expense will affect a balance sheet account (payable) and an income statement account (expense). Such as accrued interest at the end of year would be: Interest Expense (Debit) Interest Payable (Credit)

It shows the income of one company as well as the expense incurred under the production,selling and administration department.

it can be seen/determine here in the income statement if the expenses is greater than the sales. And therefore, if it does there is net loss.

If on the Trial Balance you have for example: 10% Debenture £300 then on the balance sheet you will put on the Non-Current Liabilities Section 10% Debenture £300 and on the Current Liabilities Accrued Interest £30 (£300*10%).

if advertisement expenses paid already and benefit is also taken already then it is an expense for business and all expenses comes in income statement.

 Merchandising companies do not calculate the raw materials placed in production or cost

of goods manufactured.

 Merchandisers purchase goods from suppliers instead of manufacturing goods. The cost

of these purchases from suppliers is often called net purchases in the income statement, in

contrast to cost of goods manufactured in a manufacturer’s income statement. The net

purchases line consists of purchases, purchases returns and allowances, purchases

discounts, and freight in.

 Merchandisers do not use the schedule of cost of goods manufactured (and related

schedule of raw materials placed in production).

 Merchandisers use an account called merchandise inventory, or simply inventory, instead

of finished goods inventory. This reflects that merchandisers do not produce goods.

Good question. This account is prepared when you need to record the dividends given and some taxes. Because these things aren't directly recorded in P&L account. Like dividends on Equity and preference shares is recorded in P&L Appropriation Account.