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When an expense ia paid in cash than net assetts increases and profitnincreases true or false?
1.net assets decreases and profit decreases 2net assets remain the same and profit decreases
Does amortization have a cash expense?
No amortization is done for intangible assets like depreciation for tangible assets and it also does not involve cash expense.
What effect does depreciation expense have on net income and cash flow?
Depreciation Expense reduces net income and has no effect on cash flow.
Is it true When cash is paid for an expense is assets increase owner's equity increases?
no
What is the effect on total assets of the purchase of land for cash?
An increase in Land and a decrease in cash, total effect is zero.
How does paying divedends effect assets?
It reduces cash in the bank.
Are there circumstances in which income is recognized even when a cash basis taxpayer does not receive cash?
Yes, it may arise on unrealised profit on unsold stocks, profit element of upward review of assets.
How does a company have income but take in less cash that it spends?
Income is all the money a company takes in (hence the name) expense is all the money a company spends profit is income - expense. just because expense > income doesn't mean there is no income. It means there is no profit.
What is the journal entry for the cash stolen from cash box?
Debit: Profit & Loss Account Credit: Cash In Hand or Petty Cash Nature of Debit is Expense and the nature of Credit is Asset. Expense Increased and Asset Decreased If you have an account already open for such Losses then you should debit such account. For example in my company Cash loss is usual Case so we have an Account titled "Cash Lost Expense" In my cash I will pass the entry as Debit: Cash Lost Expense Credit: Cash in Hand or Petty Cash
Where does Wages Expense go on Statement of Cash Flow?
Wages Expenses comes under "Cash flows from operating activities" and are part of net profit from operations.
Why depreciation expense is not included in the cash flow statement?
Depreciation Expense, though called an expense, is not an expense where the company actually pays money out. The statement of cash flows deals with the company's "cash flow" in order for a manager to see where the company's cash is going to and coming from. Since depreciation expense doesn't involve actual cash flow, it would not affect the Cash account.
Is gross profit a current asset?
No, gross profit is not a current asset. Gross profit refers to the difference between revenue and the cost of goods sold, reflecting the profitability of a company's core operations. Current assets, on the other hand, include cash, accounts receivable, inventory, and other assets expected to be converted into cash or used within one year. Gross profit is part of the income statement, while current assets are reported on the balance sheet.
