3 The Balance Sheet and Financial Disclosures Questions for Review of Key Topics Question 3-1 The purpose of the balance sheet‚ also known as the statement of financial position‚ is to present the financial position of the company on a particular date. Unlike the income statement‚ which is a change statement that reports events occurring during a period of time‚ the balance sheet is a statement that presents an organized array of assets‚ liabilities‚ and shareholders’
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his best effort to produce a high quality‚ informative and helpful book. In spite of this‚ he makes no representation or warranties of any kind with regard to the completeness or accuracy of the contents of the book. The author hereby accepts no liability of any kind for any losses or damages caused or alleged to be caused‚ directly or indirectly‚ from using the information contained in this book. CONTENTS ACKNOWLEDGEMENTS .....................................................................
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The Business Balance Sheet completely outlines the company; it includes the breakdown of assets and liabilities. It then transfers that to the owner’s equity. It will show debts that need to be addressed‚ if sales or profits need to be increased and overall if the company is in good standing or not. I would use the return on owner’s equity financial ratio to interpret the data. Taking the income after taxes and dividing it by the owner’s equity. I would be aiming for a higher return. Business Income
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The analysis and application of the balance sheet Kuang xin Financial accounting is one of the most popular major in the world. In the study of accounting‚ people must know and use expertly the three accounting statement‚ balance sheets‚ cash flow‚ and income statement. It is the most basic and useful skill in one’s career of accounting. But in the four basic financial statement‚ the balance sheet or called statement of financial position is the only one
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PROBLEMS 1. Table 3.3 shows the December 31‚ 2009 pro- forma balance sheet and income statements for R& E Supplies‚ Inc. The pro- forma balance sheet shows that R& E Supplies will need external funding from the bank of $ 1.4 million. However‚ they show $ 1.27 million in cash and short- term securities. Why are they going to the bank when they have most of the required amount in their cash account? 2. Pro forma financial statements‚ by definition‚ are predictions of a company’s financial statements
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Profit and loss accounts and balance sheet By law companies are expected to produce financial statements each year. These statements appear in Company Reports. There are two main financial statements: 1. The profit and loss account‚ and 2. The balance sheet. 1.The profit and loss (P&L) account. This account can be updated regularly and shows how much profit or loss a business is making. A profit can be made in several ways‚ for example: * from trading‚ in the case of a High Street shop
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Constructing a balance sheet of Sophie’s sofas: Cash balances: $10‚000 Inventory of sofas: $200‚000 Store and property: $100‚000 Accounts receivable: $22‚000 Accts payable: $17‚000 Long-term Debt: $170‚000 Balance sheet of (insert name) Assets Liabilities & Shareholders equity cash $10‚000 accounts payable $17‚000 Accounts receivable $22‚000 Long term debt $170‚000 Inventory $200‚000 Shareholders equity $145‚000 Store and Property $100‚000 _______ ________ Total assets: $332
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REVENUE 21/5/2013 Profit = Income – Expenses “Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity‚ other than those relating to contributions from equity participants” Income includes Revenue and Gains Kumail Rizvi‚ PhD‚ CFA‚ FRM 3 IASB‚ IAS NO. 18‚ REVENUE Conditions for recognizing revenue 21/5/2013 Transfer the risk and rewards
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for resale to customers. ANS: T PTS: 1 DIF: Easy OBJ: 01-01 9. Large corporations such as Shoppers Drug Mart‚ Coca-Cola‚ and Bank of Montreal operate as manufacturing businesses. ANS: F PTS: 1 DIF: Easy OBJ: 01-01 10. Three accounting professions exist in Canada: Chartered Accountant (CA)‚ Certified General Accountant (CGA)‚ and Certified Management Accountant (CMA). ANS: T PTS: 1 DIF: Easy OBJ: 01-01 1-1 Copyright © 2011 by Nelson Education Ltd. Chapter 1 11. Accounting information
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Bibliography: Jeannie D. Johnson and Michael G. Tearney‚ "Goodwill -An Eternal Controversy"‚ The CPA Journal‚ p: 58-62‚ April 1993. David Tweedie and Jeannot Blanchet‚ "Brands‚ Goodwill and the Balance sheet"‚ Accountancy‚ p: 20-22‚ January 1995. Merrill Lynch‚ “Goodwill Accounting: The overhaul affect.” New York November 2001 Schneider‚ Craig. “CFOs Sweat FASB ’s Goodwill Accounting Changes‚ Says Study.” CFO.com November 13‚ 2001. Schneider‚ Craig
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