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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
Role in finance manager managing in effective financial management in export oriented company?
what is the Role of Compay Finance Manager?
What is sales returns and allowances classified as?
An income account. Debit Returns & Allowances, Credit Cash.
What is the nature and scope of financial statement analysis?
Financial statements are means through which companies present their financial situation to shareholders, creditors and general public. Analysis of financial statement means finding out the current position of the company through various tools like ratio analysis, fund flow analysis. It also involves comparing the company fiqures with regard to industry standards or over a period of time.
The manufacturer's name is stamped just in front of the serial number.
Why is closing stock not written in the trial balance but always written below the trial balance?
The reason why closing stock is not taken into account in a trial balance is because a trial balance is a balance of all ledger account a given point in time.It records only transactions which have a two way effect for EG:Purchases where goods are bought against cash or credit and sales where goods are sold against cash or credit..But closing stock is not a transaction having a two way effect any given point in time.It is only an indication of the goods lying in the factory at the end of the year.It is therefore showed below the trial balance and not in the trial balance.However in order to derive at the exact gross profit the closing stock is taken into consideration in the trading account and also appears as an asset in the balancesheet.In some case the closing stock appears as an adjusted purchase account in the trial balance and in this case it does not appear in the trading account but appears only in the balance sheet.
The main reason is that we do not pass any entry for consumption. Hence we donot prepare any ledger account for it.
How do you find cash flow notes?
Cash flow notes can be found in many ways. Basically it comes down to marketing.
Here are a few marketing ideas that will help find cash flow notes:
- Direct mail-You can search search the Internet to find companies that will sell you a list of leads and then you can market to those leads with direct mail and sometimes phone calls.
- Search public record yourself either online or at the courthouse -Look for Trust Deeds or Deeds of Trust
- Place classified ads in local papers indicating you buy notes
- Place online classified ads
- Network with attorney's, accountants and other local professionals
What is the Importance of classifying expenditure and income into capital and revenue?
Revenue activities could be defined as day to day activities that occur for the enterprise and are usually small in value.Capital activities are those which occur not so often and are characterized by large values.Capital activities always create an asset or a liability.
Definition of 'Working Capital'
A measure of both a company's efficiency and its short-term financial health. The working capital ratio is calculated as:
Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).
Also known as "net working capital", or the "working capital ratio".
Investopedia explains 'Working Capital'
If a company's current assets do not exceed its current liabilities, then it may run into trouble paying back creditors in the short term. The worst-case scenario is bankruptcy. A declining working capital ratio over a longer time period could also be a red flag that warrants further analysis. For example, it could be that the company's sales volumes are decreasing and, as a result, its accounts receivables number continues to get smaller and smaller.
Working capital also gives investors an idea of the company's underlying operational efficiency. Money that is tied up in inventory or money that customers still owe to the company cannot be used to pay off any of the company's obligations. So, if a company is not operating in the most efficient manner (slow collection), it will show up as an increase in the working capital. This can be seen by comparing the working capital from one period to another; slow collection may signal an underlying problem in the company's operations.
Why isn't purchase of fixed asset treated as expense in the period in which the purchase was made?
Suppose the fixed asset is a machine, which will be used to produce goods, which will be sold at a profit. The sales will be recorded as the products are sold during the economic lifetime. Hence, the purchase price of the fixed asset needs to be allocated (spread) over the economic lifetime as well. The expense is called depreciation expense.
Are plant assets an example of expired cost?
The difference between cost and book value has been expired so far. The book value is the maximum amount that can expire in future periods. (The machine may have a residual value or be sold before its value is 0.)
What is the difference between income and profit and revenue?
Revenue from operations is the amount of money brought in from the sale of goods and/or services; other revenue includes any gains made on investments or other non-operating activities.
Income and profit are basically synonymous. Both terms refer to the amount of money you've made at the end of the operating cycle.
In its simplest form, profit is revenue less expenses. If the amount of money spent on operations (expenses) is less than the amount of revenue earned, there is a profit; if expenses are more than revenues, there is a loss.
On a multiple-step income statement, gross profit is sales less cost of goods sold, profit from operations is gross profit less expenses, profit before taxes is profit from operations plus or minus any gains or losses from other revenue and expenses and net profit (also called net income) is profit before taxes less income taxes.
What is a consolidated income statement?
Consolidated income statement shows the overall performance of one year by parent company as well as child company in group of companies accounting.
Proof of income sounds like part of giving them your financial statements. If you're appealing a garnishment or the payment amount, they can ask for proof of income. You don't have to give them proof of income, and they can deny your appeal or request because you failed to prove hardship by refusing to prove how much you make.
What is the definition of financial value?
One potential definition of financial value is the price that a willing buyer and seller are able to meet at for an item. This is based on what someone is willing to pay and what the seller is willing to accept as payment.
What are the basic benefits and purposes of developing pro forma statements and cash budgets?
The pro-forma financial statements and cash budget enable the firm to determine its future level of asset needs and the associated financing that will be required. Futhermore, one can track actual events against the projections.Bankers and other lenders also use these financial statements as a guide in credit decisions.
What is the proper GAAP accounting for syndication costs?
A contra equity account, syndication cost should be reflected as a reduction of equity proceeds, or recorded as an asset before the stocks are issued and then retired once the stocks are issued.
Which financial statements is prepared using the adjusted trail balance?
2003-2004 tax demand Tk.10000 but payment 2007-08
Why equity is a call option on a firm's assets?
There are two ways to view a firm in terms of options; both of which rely on the Call-Put parity relationship:
C = S - PV(x) + P
The first is the right hand side of the equation. This is saying that equity holders own the firm, owe PV(x) to the bondholders and have a put on the firm. Therefore, if the value of the firm exceeds the value of debt then the equity holders retain the firm and do not use the put. If the value of debt is greater than the value of the firm then the put is exercised to sell the firm in order to pay off the debt.
The second way, which is identical to the first, is simply to say that the equity is a call option on the firm's assets. The bondholder's own the firm, have put PV(x) into the firm and receive the benefits of the firm. However, once the value of the firm exceeds the exercise price then the equity holders (call holders) will exercise their right to buy the firm, as it will now have positive value.
When To make your checkbook balance agree with the bank statement balance?
You should balance your checkbook whenever you receive your monthly bank statement. It's usually on or around the same date each month. However, you can also track your bank balance against your checkbook balance much more often using online banking or other automated sources (ATM, bank by phone, etc).
When did CPAs begin auditing financial statements?
Since the early part of the twentieth century, CPAs have audited financial statements.
Fixed assets are not liabilities, they are assets that can not be quickly liquidated (turned into cash). If the company goes under, fixed assets would be difficult assets to get cash for.
Where is Profit and Loss post in balance sheet?
In case of profit Liability side.
In case of loss Asset side.
Why depreciation and amortization are treated as non cash items?
Depreciation an amortization are treated as non cash items because the actual amount of depreciation can not be known in cash terms..the depreciation does not lead to any inflow ore outflow of cash ....the amounbt of depreciation is jst deducted frm the actual value of the asset
How do you present bank guarantee in a balance sheet?
Debit - guarantee deposit
Credit - Notes payable
