Xi acc.financial stts.
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This document defines key stakeholders as any person associated with a business, whether internally or externally, and with monetary or non-monetary interests. It identifies common stakeholder groups like owners, managers, government, and potential owners. It also distinguishes between capital and revenue items that affect financial statements, and defines capital, deferred revenue, and ordinary revenue expenditures. Capital receipts incur an obligation to return money while revenue receipts do not. Financial statements aim to present an accurate view of financial performance and position by properly reporting items as either capital or revenue.
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Lecture 1
Here are the solutions to the selected problems from Chapter 17:
P17-7A:
Accounts receivable, December 31, 2009 $90,000
Estimated uncollectible accounts (3% of receivables) 2,700
Net accounts receivable $87,300
Accounts receivable, December 31, 2010 $110,000
Estimated uncollectible accounts (5% of receivables) 5,500
Net accounts receivable $104,500
Increase in net accounts receivable $17,200
P17-9A:
Accounts receivable, January 1 $80,000
Credit sales for January 150,000
Collections for January (120,000)
Lecture 7 Income Statement Rw
The document discusses key financial statements and concepts:
- The income statement measures performance over a period by comparing revenues to expenses, yielding net income. It uses accrual accounting to match revenues with the expenses to generate those revenues.
- The balance sheet shows a company's financial position at a point in time by listing its assets, liabilities, and equity. The cash flow statement explains changes in cash from operating, investing, and financing activities.
- Key income statement components include revenues, expenses, and net income. Revenue is recognized following certain criteria and on an accrual basis, as is the recording of expenses according to the matching principle.
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The document discusses the four main financial statements that companies must prepare:
1) The income statement reports a company's revenues, expenses, and profitability over a period of time.
2) The statement of retained earnings shows the change in retained earnings between the start and end of a period.
3) The balance sheet provides a snapshot of a company's assets, liabilities, and equity at a point in time.
4) The statement of cash flows reports the cash inflows and outflows for a company over a period. Together, these four statements provide information on a company's profitability, financial position, and cash flows.
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1. The document discusses key financial statements - balance sheets, income statements, and cash flow statements - that are used to understand the financial health and performance of agribusinesses.
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For full text article go to : https://www.educorporatebridge.com/finance-for-non-finance/finance-for-non-finance-professionals/
This article on Finance for Non Finance Professionals will help you to gain basic finance knowledge, accounting concepts and better understanding of financial statement required for growth of your organization.
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The document discusses the key components and purpose of a balance sheet. It provides definitions for assets, liabilities, and equity. It also outlines the various sections that must be included in a balance sheet according to the Companies Act of India from 1956, such as fixed assets, current assets, equity, and various types of liabilities. The purpose of a balance sheet is to disclose the values and nature of a company's assets and liabilities, provide information about its solvency, liquidity, and other financial details. However, balance sheets also have limitations as the values reported may not reflect current market prices.
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The document provides an overview of key finance concepts for non-finance professionals, including:
1) The purpose of financial statements is to measure a company's performance and determine how wealth is distributed to stakeholders. Key statements are the balance sheet, income statement, and cash flow statement.
2) The balance sheet shows sources of funds (liabilities) and uses of funds (assets) on a given date. The income statement shows revenues, expenses, and profits over a period of time. The cash flow statement links accrual accounting to cash flows.
3) Understanding financial statements allows non-finance staff to evaluate decisions, track company performance, and interact knowledgeably with finance teams.
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The document discusses key concepts in financial accounting:
1. Accounting has evolved from a record keeping system to an information system that measures and reports on economic events in financial terms.
2. It involves recording, classifying, and summarizing financial data and communicating results to stakeholders.
3. Financial accounting aims to provide information to assess the financial position and performance of a business entity.
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The document discusses two key financial statements:
The income statement indicates a business's profits and losses over a period of time and is prepared monthly. It includes revenue, costs, expenses, and net income calculations.
The balance sheet shows a business's assets, liabilities, and owner's equity on a given date. Assets include current assets like cash and inventory as well as fixed assets. Liabilities include current amounts owed and long-term debts. The balance sheet ensures assets always equal liabilities plus owner's equity.
Profit and loss post & prior to incorporation
This document discusses how to account for profits earned before and after incorporation of a company. It provides the following key points:
1. Profits earned before incorporation are considered capital profits of the company, while profits earned after incorporation from October 1, 2017 to December 1, 2017 are normal revenue profits.
2. To determine the ratio of pre-incorporation to post-incorporation profits, the timeframe for each must be calculated. For example, if a business was acquired on January 1st and incorporated on October 1st, the pre-incorporation period would be 9 months.
3. Expenses linked to sales, such as freight costs, commissions, and discounts, should be allocated between
Income statement
The income statement shows a company's revenues and expenses over a period of time, with the goal of showing whether the company made a profit or loss. It displays revenues, costs of goods sold that generated the revenues, and all other expenses. The difference between total revenues and total expenses is the net income or loss for the period. Key sections include revenues, costs of goods sold, gross profit, operating expenses, operating income, non-operating items, and net income. The income statement is an important financial statement that helps managers and investors understand a company's financial performance over time.
Finance for non finance
This document provides an overview of personal and professional finance concepts for non-finance individuals. It discusses the importance of learning about savings, investments, financial planning, and other topics for personal growth. Professionally, it outlines key elements of financial statements like the balance sheet, income statement, and cash flow statement. It also defines common accounting terms and financial ratios to analyze statements. The goal is to educate non-finance readers on basic financial literacy.
Understanding Financial Statements - For Beginners!
Balance Sheets, Income Statements, Profit & Loss - What every small business owner needs to know to run a successful business.
1 income statement
This document discusses key aspects of the income statement and related reporting issues. It covers the format and elements of the income statement, including revenues, expenses, gains and losses. It explains how items are reported within the income statement, such as gross profit, income from operations, and net income. The document also discusses reporting requirements for unusual items, discontinued operations, earnings per share, and allocation to non-controlling interests. Learning objectives cover understanding the uses and limitations of the income statement, its content and format, and how to prepare and explain the reporting of items in the statement.
Income statement & balance sheet
The document defines and explains what an income statement is. It notes that an income statement presents a company's revenue, expenses, and profit over a period of time. It shows the operating and non-operating sections, including revenue, expenses, gains, and costs. The document also discusses why income statements are essential for accountants, owners, investors, and creditors to evaluate past performance, predict future performance, and assess risk. It outlines some limitations of income statements as well.
Cash Flow Statement
The document discusses cash flow statements, which show a company's cash inflows and outflows from operating, investing, and financing activities. Cash flow from operating activities includes cash from sales, services, and payments for supplies, employees, taxes. Investing activities involve cash from purchases/sales of property and equipment and other investments. Financing activities include cash from issuing/repaying debt and equity. The cash flow statement is important for understanding a company's liquidity and ability to meet obligations.
Balance sheet analysis
The document discusses the analysis of balance sheets and profit and loss statements. It defines various line items that appear on both, such as sources of funds, uses of funds, capital, reserves, liabilities, assets, revenue, expenses, and profits. Key aspects covered include classification of current and non-current items, treatment of investments, provisions, and the valuation of inventory.
What is a Profit and Loss Statement
A profit and loss statement is a financial statement that reports on revenue, operating costs and expenses incurred by an entity within a nominated period of time.
Calculating cash flow from operating activities
The document discusses the direct and indirect methods for reporting cash flows from operating activities according to PAS 7. It provides examples of income statement accounts and their related adjustments to reconcile net income to net cash flow from operating activities. Specifically, it discusses decreasing or increasing current assets and liabilities as adjustments to net income, along with other non-cash expenses like depreciation. The net cash flow from operations is calculated by adjusting net income for non-cash items and changes in balance sheet accounts and equals interest paid, income taxes paid, and net cash from operating activities.
cash flow statement
A cash flow statement summarizes the inflows and outflows of cash from operating, investing, and financing activities over a specific period of time. It reveals how cash was generated and where it came from and went to. The primary objective is to provide information on the changes in cash position between two balance sheet dates. Some limitations include that it does not reflect changes in working capital and can be influenced by management policies. A cash flow statement differs from a fund flow statement in that the latter considers changes in net working capital rather than just cash, and is more useful for long-term analysis.
Lecture 1
Here are the solutions to the selected problems from Chapter 17:
P17-7A:
Accounts receivable, December 31, 2009 $90,000
Estimated uncollectible accounts (3% of receivables) 2,700
Net accounts receivable $87,300
Accounts receivable, December 31, 2010 $110,000
Estimated uncollectible accounts (5% of receivables) 5,500
Net accounts receivable $104,500
Increase in net accounts receivable $17,200
P17-9A:
Accounts receivable, January 1 $80,000
Credit sales for January 150,000
Collections for January (120,000)
Lecture 7 Income Statement Rw
The document discusses key financial statements and concepts:
- The income statement measures performance over a period by comparing revenues to expenses, yielding net income. It uses accrual accounting to match revenues with the expenses to generate those revenues.
- The balance sheet shows a company's financial position at a point in time by listing its assets, liabilities, and equity. The cash flow statement explains changes in cash from operating, investing, and financing activities.
- Key income statement components include revenues, expenses, and net income. Revenue is recognized following certain criteria and on an accrual basis, as is the recording of expenses according to the matching principle.
Financial statement
The document discusses the four main financial statements that companies must prepare:
1) The income statement reports a company's revenues, expenses, and profitability over a period of time.
2) The statement of retained earnings shows the change in retained earnings between the start and end of a period.
3) The balance sheet provides a snapshot of a company's assets, liabilities, and equity at a point in time.
4) The statement of cash flows reports the cash inflows and outflows for a company over a period. Together, these four statements provide information on a company's profitability, financial position, and cash flows.
Full balance sheet_&_profit_&_loss_analysis
The document discusses balance sheet analysis and profit and loss account analysis. It outlines the key components of a balance sheet, including sources of funds like capital, reserves, liabilities and uses of funds like assets. It describes items in reserves, tangible net worth, term liabilities, current liabilities, contingent liabilities, fixed assets, investments, current and non-current assets. It also discusses the components of a profit and loss account like gross sales, net sales, cost of production, selling and administrative expenses, cost of goods sold, gross profit, operating profit and net profit.
Cash flow statement
The document discusses the cash flow statement, which deals with the flow of cash in and out of a business. It shows incoming and outgoing cash and assesses a company's ability to generate and use cash. The cash flow statement explains changes in a company's cash position over a period of time by detailing cash inflows from operations, investments, and financing activities, as well as cash outflows. It helps management with financial planning and decision making regarding dividends, loan repayments, and liquidity. The cash flow statement provides different and useful information than the income and balance sheet statements.
Understanding Balance Sheets, Cash Flow, Income Statements Farm Economics
1. The document discusses key financial statements - balance sheets, income statements, and cash flow statements - that are used to understand the financial health and performance of agribusinesses.
2. Balance sheets summarize assets, liabilities, and net worth on a given date. Income statements show profits and losses over a period of time. Cash flow statements indicate cash inflows and outflows.
3. The financial statements are used to analyze the feasibility, risk, and profitability of agribusinesses through liquidity ratios (like current ratio), solvency ratios (like debt-to-asset ratio), and profitability ratios (like return on assets). High liquidity, solvency, and profit
Finance for non finance professionals
For full text article go to : https://www.educorporatebridge.com/finance-for-non-finance/finance-for-non-finance-professionals/
This article on Finance for Non Finance Professionals will help you to gain basic finance knowledge, accounting concepts and better understanding of financial statement required for growth of your organization.
Balance Sheet
The document discusses the key components and purpose of a balance sheet. It provides definitions for assets, liabilities, and equity. It also outlines the various sections that must be included in a balance sheet according to the Companies Act of India from 1956, such as fixed assets, current assets, equity, and various types of liabilities. The purpose of a balance sheet is to disclose the values and nature of a company's assets and liabilities, provide information about its solvency, liquidity, and other financial details. However, balance sheets also have limitations as the values reported may not reflect current market prices.
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2) The balance sheet shows sources of funds (liabilities) and uses of funds (assets) on a given date. The income statement shows revenues, expenses, and profits over a period of time. The cash flow statement links accrual accounting to cash flows.
3) Understanding financial statements allows non-finance staff to evaluate decisions, track company performance, and interact knowledgeably with finance teams.
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1. Accounting has evolved from a record keeping system to an information system that measures and reports on economic events in financial terms.
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This document discusses how to prepare three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It provides examples of the components and format of each statement. The income statement reports revenues, expenses and net income. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet lists assets, liabilities, and equity on a specific date. Preparing these statements helps users make better financial decisions.
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This document provides a tutorial on preparing three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It explains the purpose and format of each statement. The income statement reports revenues, expenses and net income for a period. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet reports assets, liabilities, and equity as of a point in time. The tutorial also discusses the accounts that make up each statement and the order they should be prepared.
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- 2. A stakeholder is any person associated with the business. Stakeholders are of various types: Monetary or non- monetary Active or passive Direct or indirect Internal and external
- 3. NAME INTERNA L/EXTERN AL USERS OBJECTIVE TYPE OF INFORMATION Current owners Internal To make investment in the business Likes to know the profit , current financial position Manager Internal For a career.Act as the agent of the owners and employees Likes to know the profit , current financial position Governme nt External Regulatory role ,tries to lay down rules in the best public interest. To protect rights of all stakeholders . Also interested in the profitablity Prospectiv e owners External Expecting to make investments in the business with a view to make his investment and wealth grow Likes to know about past profits and financial position as indicative of likely future performance Bank External Interested in safety of the principal as well as the periodic return Interested to know the adequacy of profits only as an assurance of return
- 4. A very important distinction in accounting is between capital and revenue items. The revenue items form part of the trading and profit and loss account ,the capital items help in the preparation of a balance sheet.
- 5. Whenever payment and/or incurrence of an outflow are made for a purpose other than the settlement of an existing liability is called expenditure.
- 7. If the benefit of an expenditure extends upto one accounting period , it is termed as revenue expenditure. They are incurred for the day –to day conduct of the business. Example- Payment of salary,rent etc.,
- 8. If the benefit of expenditure extends more than one accounting period , it is termed as capital expenditure. Example-payment for furniture, machinery ,etc.,
- 9. Revenue expenditures which are are likely to give benefit for more than one accounting period , are known as deferred revenue expenditure. Example – heavy expenditure on advertisement
- 10. Capital expenditure Revenue expenditure Increases earning capacity of business Maintain the earning capacity of business Incurred to acquire fixed assets for operation of business Incurred to conduct day-to-day activities of business Capital expenditure is of non- recurring nature Revenue expenditures are recurring in nature Benefits are extended to more than one accounting year Benefits are limited to within one accounting year Recorded in Balance Sheet of the business after deducting depreciation Recorded in trading and profit and loss account after making adjustments
- 11. Capital receipts If the receipts imply an obligation to return the money, it is called capital receipts. Example –additional capital brought in by the owner, loan taken from bank ,sale of fixed asset , etc.,
- 12. Revenue receipts If a receipt does not incur an obligation to return the money or is not in the form of a sale of asset, it is called revenue receipts. Example –sales made by the firm, interest on investment received by the firm etc.,
- 13. All items of revenue are shown in the trading and profit and loss account . All items of capital nature are shown in the balance sheet. If any of revenue nature is treated as capital item or vice-versa ,the ascertainment of profit or loss will be incorrect.
- 14. OBJECTIVES The basic objectives of preparing financial statements are:- A) To present a true and fair view of the financial performance of the business B)To present a true and fair view of the financial position of the business.
- 15. Financial Statements prepared by the firm are of two types Trading and Profit and Loss Account (Income Statement) Balance Sheet (Position Statement)
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