assets are used in accounting to clearly define the positive side of a balance sheet. Current and non-current assets are not only cash‚ but also monies which will turn into cash in the future. This includes receivables‚ properties‚ work in progress and buildings. This paper will define current and non-current assets‚ differentiate between the two‚ the order of liquidity and how the order of liquidity applies to the balance sheet. A current asset is defined as “receivables‚ inventory‚ work in process
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based on the information in the financial statements. Given below are the components of the Financial Statements and the objective of each component is also given in-front of each component. Statement Trading account Profit and Loss account Balance Sheet Objective Computation of gross profit or loss Computation of net profit or loss Represents the financial position or status 2. Trading‚ Profit and Loss Account A Manufacturing account is prepared by an organization engaged in manufacturing process
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Presentation 4 What can you find from a financial statement? Financial statement ate meant to present the financial information of the entity and for readers. Financial statement for businesses usually include income statement‚ balance sheet ‚ statement of retained earnings and cash flows are well as other possible statements. Income Statement A financial statement that measures a company’s financial performance over a specific accounting period. Financial performance is assessed by giving
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Standards may lead to distortion of information in the financial statements. 4.2 Types of Financial Statements Generally‚ most business is required to prepare a set of the following financial statements : Trading‚ Profit and Loss Account Balance Sheet 4.3 Trading‚ Profit and Loss Account The Trading‚ Profit and Loss Account shows the profitability of the business at the end of its financial accounting period. The income earned is matched with the cost and expenses incurred during the period
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accounting world there are several financial statements but the four main financial statements that are universally understood and prepared for most publically traded companies and many small and medium sized businesses are the income statement‚ the balance sheet‚ the statement of cash flows‚ and the statement of retained earnings (sometimes referred to as shareholders’ equity). A fundamental ability to properly interpret the information these statements contain allows internal and external users to make
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CHAPTER 4 Balance Sheet ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Disclosure principles‚ uses of the balance sheet‚ financial flexibility. Classification of items in the balance sheet and other financial statements. Preparation of balance sheet; issues of format‚ terminology‚ and valuation. Subsequent events. Questions 1‚ 2‚ 3‚ 5‚ 6‚ 7‚ 10‚ 18‚ 21‚ 24‚ 25 11‚ 12‚ 13‚ 14‚ 15‚ 16‚ 18‚ 19 4‚ 7‚ 8‚ 9‚ 16‚ 17‚ 20‚ 23‚ 26 22 1 Brief Exercises Exercises Problems 2. 1‚ 2‚ 3‚ 4‚ 5‚ 6‚
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periodic inventory system. Determine the inventory balance Altira would report in its August 31‚ 2011‚ balance sheet and the cost of goods sold it would report in its August 2011 income statement using each of the following cost flow methods: 1. First-in‚ first-out (FIFO) 2. Last-in‚ last-out (LIFO) 3. Average cost E8-14 Altira uses a perpetual inventory system. Determine the inventory balance Altira would report in its August 31‚ 2011‚ balance sheet and the cost of goods sold it would report in
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changing one affects other statements‚ and the importance to understand the relationship between the statements. Financial statements are demonstrated in four different financial statements‚ which are balance sheet‚ income statement‚ retained earnings‚ and statement of cash flows. A balance sheet illustrates a financial picture at a point of time of what a business owns‚ which are the assets and what it owes‚ which are the liabilities. The income statement portrays how well a business performed
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Team A Week One Reflection ACC/422 Monday‚ April 8‚ 2013 Lisa A. Foy Learning Team A Week One Reflection The object of the reflection for this week is to discuss the objectives for Week One and their relation to the importance of the balance sheet to internal and external users. The objectives discussed by Learning Team A are the components of cash and cash equivalents‚ and the comparison and contrast of different inventory cost flow assumptions and how they are valued. The internal users
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preparing financial statements. Solution: Introduction to Financial Statements One of the steps included in the accounting cycle is the preparation of the principal financial statements. They are the Income Statement and the Balance Sheet. These financial statements are a means by which the information accumulated and processed in financial accounting is periodically communicated to the users. Once the worksheet is completed‚ it is easy to prepare the financial statements as the
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