Archive about 'Financial Statements'

Accounting Test (With Answer) On Profit And Loss Appropriation Account

Question:

 XYZ Ltd has an Ordinary Share Capital of 1,000,000 ordinary share of $1 each and 100,000 6% preference shares of $1 each.  The net profits for the first three years of business ended 31 Dec were:
20X1      $200,000

20X2      $250,000

20X3      $350,000 

Transfers to reserves were as follows:
20X1  Transfer to General Reserve    $20,000

20X2  Transfer […]

Profit And Loss Appropriation Account

The Profit And Loss Appropriation Account

 For A Sole Trader :

The net profit is the entitlement of the owner and it is accordingly added to capital. Any drawings are deducted from capital 

 However for a Limited Company, a typical Profit And Loss Appropriation Account will look like below:        

     Profit And Loss Appropriation Account for XYZ Limited […]

Accounting Question Test With Answer FS No 1 On Financial Statements

1.The primary purpose of the balance sheet is to
            a.report the financial position of the reporting entity at a particular point in time
            b.measure the net income of a business up to a particular point in time
            c.determine cash flow for the period
            d.report the difference between cash inflows and cash outflows for the period 
2.  […]

Basic Understanding Of Segmental Reporting

In a Company’s Annual Report, we see a section in the Notes to the Accounts pertaining to Segmental Reporting.

This article seeks to give a basic understanding of what’s segmental reporting all about.

Segmental Reporting

· As we know that The Notes To The Accounts assists the investors/readers of the financial statements with both complementary and supplementary materials […]

Annual Report: Basic Understanding & Commonly Asked Questions ( Part 1)

(1)  What is An Annual Report?

An Annual Report :

is a document produced annually by companies designed to show a true and fair view of the company’s annual performance,

it comprises the audited financial statements prepared in accordance with company law and other regulatory requirements, and also containing other non-financial information.

In UK and many other countries, the […]

Main Qualitative Characteristics Of Financial Statement

UNDERSTANDABLE & USEFUL

Accounting information should be readily understandable to the intended users of the information.

This is a function of both the intended users and the intended uses of the information. Accounting systems that define either the users or uses narrowly may justify more complex information requirements and standards. Accounting systems that envision a broad body […]

Question Paper CF No 1:On Statement of Cash Flow Classification

In the earlier article, we know that all the cash inflows and outflows in the statement of cash flow can be classified under the following categories:
(a) Operating activities
(b) Investing activities
(c) Financing activities
(d) non-cash flow adjustments

To refresh your understanding, the below questions asked you to put in the proper category:

Question to Test Paper CF No. 1

Test […]

Potential Uses Of the Financial Statements

POSSIBLE USES OF THE FINANCIAL STATEMENTS BY DIFFERENT USERS:

Equity Investor group: Assessing their investment

Loan Creditor group: Assessing the ability to make repayment of loan

Employee group: Assessing security of employment

Analyst-adviser group: Assessing their investment

Business contact group: For the suppliers: likelihood of future supply and for the customers: reliability of future supply

Government: Collection of tax and for economic […]

Dividends And The Difference Between Interim Dividend and Final Dividend

This article describes briefly what are dividends and then proceed to differentiate interim and final dividend.
Generally, what do we mean by dividends?
When profits are divided among the shareholders of a company, each shareholder receives a portion of the profit called dividends.

How dividends are computed:
Dividends are calculated based on the paid-up capital of the company […]

What Is In The Income Statement: Net Sales, Costs Of Goods, Gross Margin

COMPONENTS IN THE  INCOME STATEMENT:

Net Revenue    A
Cost of Goods  B
Gross Margin  C=A-B

NET REVENUE:

NET REVENUE are the list prices of the goods and/services less any discounts offered to the customer to induce purchase.
Don’t forget that these revenue is recognized in the period in which goods and services are sold, not necessarily the period in which […]