The four main financial statements are the income statement, statement of retained earnings, balance sheet, and cash flow statement. All four statements are interrelated and allow the user to more fully understand the financial performance of the business through the analysis of its financial statements.
Relationship Between Financial Statements January 26th, 2017Team
The gross profit method calculator works out a products net price after applying multiple trade discounts to its list price. This free Excel calculator also provides a summary showing the original price, total discount, and net price, together with a calculation of the single equivalent rate (SED).
Gross Profit Method Calculator November 6th, 2016Team
Following a physical count, a business has consumable supplies on hand of 350. The accounting records before adjustment show supplies on hand of 500, and an adjusting entry is needed to record the amount of supplies used for the period.
Consumable Supplies Expense Recorded November 6th, 2016Team
Errors in inventory impact the balance sheet and income statement of a business, but have no effect on its operating cash flow. In the cash flow the change in net income as a result of the inventory error, is compensated for by a change in the movement on working capital.
A business has an estimated annual income tax expense of 14,000 due of profits for the accounting period. A demand for the amount has not yet been received from the tax authorities, and the expense has not been recorded in the accounting records. An accrued income tax adjusting entry is made in the accounting records.
A business operating a perpetual inventory system needs to record goods received into inventory even if it has not yet received an invoice from its supplier. Since the liability cannot be posted to the accounts payable account, a temporary posting is made to the goods received not invoiced account.
Goods Received Not Invoiced November 6th, 2016Team
A business will often purchase a number of long term assets for a single combined purchase price. In order to record the assets in the accounting records and to allow depreciation to be correctly calculated, the basket purchase price needs to be allocated in proportion to the fair market value of the assets.
The allowance for uncollectible accounts method is used to estimate the bad debt expense required to reflect uncollectible accounts receivable at the end of an accounting period. The method complies with the matching principle and for this reason is preferred over the direct write off method.
The direct write-off method of accounting for uncollectible accounts is used to remove specific uncollectible amounts from the accounts receivable balance when they are identified. This debt write off method does not comply with the matching principle and can only be used for immaterial amounts.
A utilities bill will be recorded as an expense to the business. As the business is given credit by the supplier, the other side of the accounting equation is a liability to the supplier (accounts payable).