M3 Interpret the contents of a trading and profit and loss account and balance sheet for a selected company explaining how accounting ratios can be used to monitor the financial performance of the organisation . Profit and Loss account. The P&L will not tell you about the underlying health of the business‚ such as how much money it owes or is owed and what the value of its assets are. It shows how much money did business made in a year. It records two things sales and cost/turnover.
Premium Generally Accepted Accounting Principles Revenue Inventory
the owner are included in the a. statement of owner’s equity. b. income statement. c. balance sheet. d. chart of accounts. ANS: A DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication 5. Owner’s equity can be increased through a. withdrawals by the owner. b. investments by the owner. c. expenses exceeding revenues. d. purchases of assets for cash. ANS: B DIF: Easy OBJ: LO 6-1 MSC: AACSB Communication 6. The balance in an expense account is closed to a(n) a. capital account. b. revenue account. c. drawing
Premium Revenue Income statement Generally Accepted Accounting Principles
Accounting Project SHAREHOLDER’S FUNDS Shareholders’ funds are the balance sheet value of the shareholders’ interest in a company. For company (as opposed to group) accounts it is simply all assets less all liabilities. For consolidated group accounts the value of minority interests should also be excluded. The addition of minority interests gives us “shareholders’ fund including minority interests”. A further adjustment gives us total equity. SHARE CAPITAL The capital collected by a joint
Premium Stock Generally Accepted Accounting Principles Balance sheet
value and confirmatory value b. Comparability‚ consistency‚ and confirmatory value c. Understandability‚ predictive value‚ and reliability d. Completeness‚ neutrality‚ and freedom from error 2. The amount reported as “Cash” on a company’s balance sheet normally should exclude a. Postdated checks that are payable to the company b. Cash in a payroll account c. Undelivered checks written and signed by the company d. Petty cash 3. Which of the following reconciling items would require an adjusting
Premium Balance sheet Asset Generally Accepted Accounting Principles
ensure that they are internally consistent. It also assists the firm in identifying the asset requirements and needs for external financing. For example‚ the principal driver of the forecasting process is generally the sales forecast. Since most Balance Sheet and Income Statement accounts are related to sales‚ the forecasting process can help the firm assess the increase in Current and Fixed Assets which will be needed to support the forecasted sales level. Similarly‚ the external financing which will
Premium Generally Accepted Accounting Principles Balance sheet
accounting system creates financial accounting reports which are provided to external decision makers. True False 2. Business managers utilize managerial accounting reports to plan and manage the daily operations. True False 3. The balance sheet includes assets‚ liabilities and stockholders’ equity as of a point in time. True False 4. Revenue is recognized within the income statement during the period in which cash is collected. True False 5. Total assets are $37‚500‚ total
Premium Financial statements Generally Accepted Accounting Principles Balance sheet
positive net income for the three years prior to year 14‚ the cash that the company had on the balance sheet was much lower than the net income. In year 14 the company showed cash on the balance sheet of $159‚000 but net income was negative $3.83 million. Companies have a way of manipulating net income but it is much harder to manipulate cash on the balance sheet. Looking at a company’s cash on a balance sheet is a greater indicator of financial health over net income. The company‚ in order to avoid
Premium Balance sheet Income statement Generally Accepted Accounting Principles
difference among current assets and noncurrent assets is the time it takes for them to liquidate when needed. The order of liquidity is presented on the balance sheet in the order of the amount of time it takes to convert each one into cash‚ from least to greatest. Cash and cash equivalents are the first current assets that are listed on the balance sheet‚ followed by the remaining current assets‚ and finished with noncurrent assets. Current and noncurrent assets are equally as important. Current assets
Premium Balance sheet Generally Accepted Accounting Principles Asset
emergency services. Unfortunately‚ in 2009‚ due to declines in stock and real estate markets‚ Patton- Fuller Community Hospital began to see significant changes in the overall financial decision making of the organization. Financial statements and balance sheets from 2008 and 2009 were drawn to examine the comparable changes that resulted in reassessing company investments. Favorable decisions made by the Board and the CFO‚ which despite the uneven economy provided this organization the confident to be
Premium Income statement Balance sheet Generally Accepted Accounting Principles
November 1978 and August 1979 contributed to this situation? (Hampton background) 3. Based on the information provided‚ prepare projected cash budget for the four months September through December 1979‚ a projected income statement‚ and a pro forma balance sheet as of December 31‚ 1979. 4. Critically evaluate the assumptions of the forecasts. 5. Do you believe that Hampton can repay the loan in December? 6. Should the bank approve the request? What are the bank’s major risks? 7. What alternatives
Premium 1979 Financial ratio Balance sheet