Archive about 'Financial Statements'

What Is The Meaning Of The Word “ Restatement of Financial Reports?

Some of us sometimes hear in the press that Companies “restate” their financial reports. What does it really mean?

Answer:

In earlier articles, we have discussed about the different type of accounting principles or policies, changes in accounting policies , accounting fundamental errors and difference between change in accounting estimates and change in accounting policies.

At times, when [...]

What Are The Differences Between Terms Like Gross Profit, Gross Margin, Gross Profit Percentage(%), Gross Profit Margin Or Gross Profit Rate?

Is there a difference when we use terms like gross profit, gross margin, gross profit %. gross profit margin or gross profit rate?

Answer:

It is interesting to note that some of us still use the above terms interchangeably.

However, take note that:

Gross Profit is an ABSOLUTE term which is simply:
[ Gross Profit = [...]

List Of Topics Under Financial Statements

Click to the respective topic on Financial Statements:

Content Page On FINANCIAL STATEMENTS

1.0

ABOUT THE FINANCIAL STATEMENTS:
What are the COMPONENTS in the Financial Statements
What are the PURPOSE(S) of the Financial Statements
Who are the USERS of Financial Statements
What are the POTENTIAL [...]

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 [...]

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 [...]