Financial Statements

The year-end balance of the owners capital account appears in owners equity.

On the balance sheet accounts payable are located under current liabilities.

Dividends act as a debit to Retained Earnings. Net Income is closed out by Crediting a gain to Retained Earnings which is a permenant equity account. Therefore Dividends are not a reduction to Net Income but instead a reduction of Retained Earnings and further of Owners Equity.

As you may note, this also means that since Dividends are not included in Net Income they are not Tax Deductable which for many years resulted in double taxation of dividend income. Once at the corporate level and again at the personal level.

Ex: In the financial statements it is going to be looking like this:

Income Statement:

Revenue-Expenses=Net Income

Statement of Retained Earnings:

Begging Retained Earning+Net Income-Dividends= Ending Retained Earnings

Capital reserve is capital set aside for specific future purpose such as building a new facility in the near future. It would be like you saving to buy a new a car.

Reserve capital is money set aside for unforeseen issues. It's like a saving account or emergency fund that has no specific earmark.

Loss on sale of land is added back to net income in operating activities and sale of land is shown under investing activity as a reduction in amount.

Yes it is. Permanent accounts are balance sheet accounts which do not close at the end of the accounting year, as opposed to income statement account balances which are removed an added to retained earnings.

Another words income statement accounts are measured for a certain period of time whereas balance sheet accounts carry on to the following years.

It depends on the type of account you want to open. Most Nationalized banks in India allow you to open an account with a minimum deposit of Rs. 500/- or Rs. 1000/- (depending on whether the branch is a rural or city branch).

Private banks on the other hand require a higher minimum deposit - usually Rs. 5000/- or more. But, they also have special accounts which offer 0 balance facilities but they come with a condition - like if you have a salary account. You need to check with your bank to find out the exact amount

Debit bonds
Debit interest accrued
Credit cash / bank

Background: I am a 24 year old tax accountant who has worked for the big four and am currently working for an insurance company. PROS * Very good salary and benefits; ability to live independently without scraping the bucket. (i.e. I am 24 and earn $64K). * Work with facts, rules and numbers; minimal creativity necessary (if you like that). * Excellent job security, regardless of the economy or location you are in. * Work is generally routine and objective. CONS * Complex regulations to have to work with and abide by. * High potential for human error; must be very detailed and careful. * Occasional overtime required (Excessive overtime required at a big four firm). * Not much of a fun factor. Conclusion: Accounting is a good field to get into if you have a high aptitude for mathematics, detail and following strict rules and regulations. My overall rating for accounting as a profession: 8/10. Great field if you want excellent job security and great pay.

How much money a shoe store earns depend ons many factors. Where is it located? How much are expenses? Is it a specialty shore store or a general one? Most successful shoe stores are in malls. Shoes stores can make a negative profit up to earning hundreds of thousands of dollars.

A list of the International Accounting Standards can be found on the IAS Plus website. These includes Presentation of Financial statements, Inventories, Statement of Cash Flows, and Income Taxes.

Finalization of Accounts:

It is the accounts of Finanical Statement / Balance Sheet, Income / Earning statement / Profit & Loss A/c & All Ledgers which is finally accounted in Trial Balance for the company.

Unearned income is a liability until it is earned and is listed under liabilities under on the Balance Sheet.

The reason it is a liability is because it is money that you have receive but have not yet earned, therefore you as a company "OWES" something.

Example: Your company receives and order for $5,000 in watches, but you won't ship the watches until later. You must list the $5,000 as Unearned Income because you have the Income but you haven't earned it and you now have an obligation to the purchaser to either 1. complete the order and ship the watches or 2. refund the purchase price.

Contribution margin is term used in management accounting in short-term decision making.

Contribution Margin = Sale price - Variable Cost

It means it is a contribution by every unit sell (after recovering variable cost) towards recovering the fixed cost spend on producing the product. So at which point product recover it's full fixed cost its the break-even point where product has not profit no loss and after that point what product earns is the profit of company.

The increase of A/P on the statement of cash flow show?

decrease in inventory will be shown as increase in cash in cash flow from operating activities as this is increasing the cash.

Increase in sales tax payable increases the cash because if at first place cash is paid then cash will be reduced but if payable is increasing it means cash is increasing as well and it will decrease when all sales tax payable will be paid.

If you r buying a life insurance scheme & paying prm for the same then its a drawing in your books of accounts & not your expense.

If you r buying general insu. For your equipments, furniture, material etc agst theft or loss or any such purpose then it is your admin exp.

If you are insuring goods in transit then only it is selling exp.

GROSS PROFIT Gross Profit is the difference between Net Sales and Cost of Goods Sold. First, Net Sales is calculated by subtracting Sales returns and allowances from Sales. Sales - Sales Returns and Allowances = Net Sales Next, Gross Profit is calculated by subtracting Cost of Goods Sold from Net Sales. Net Sales - Cost of Goods Sold = Gross Profit Gross Profit is expressed as a dollar figure, like $100. If Cost of Goods Sold exceeds Net Sales, Gross Profit figure will be negative. PROFIT MARGIN Profit Margin is not a dollar figure. Profit Margin shows the percentage of each sales dollar that results in net income. First, Net Income is calculated by subtracting Operating Expenses from Gross Profit. Gross Profit - Operating Expenses = Net Income Next, the Profit Margin ratio is constructed, and the result is expressed as percentage. Net Income : Net Sales = Profit Margin For example, assume that Net Income equals $10,000 on Net Sales of $100,000. In this case Profit Margin equals $10,000 : $100,000 = 0.10 = 10%. GROSS PROFIT MARGIN Terms "Gross margin" and "Gross profit margin" have been invented by some enterprising accounting students. These terms are part of accounting jargon in some colleges. The meaning of those terms is very liberal, - it means whatever one wants it to mean. For example, "Gross Profit" may mean either Gross Profit or Profit Margin. Most likely, it means that the speaker does not know the meaning of either one of the terms. But "Gross Profit Margin" surely takes the cake. It's just a mouthful piece.

Debit to Cash (asset) Credit to Unearned Revenue (Liability)

Dividend payable become liability for business as soon as it declared to be paid and all future liabilities are part of balance sheet so dividend payable also shown under liability section of balance sheet and not part of income statement.