By Admin on March 20, 2009
The analysis of a balance sheet is a complex process. It not only includes a large number of the information of management, but also these information need to be analysed comprehensively with the income statement, cash flow, accounting policies and explanatory notes.
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Posted in Blog | Tagged Balance sheet |
By Admin on March 17, 2009
A complete set of financial statements comprises the following components:
- balance sheet
- income statement
- a statement showing either: all changes in equity or changes in equity other than arising from capital transactions with owners and distributions to owners.
- cash flow
- note of accounting policies and other explanatory notes.
Some enterprises present additional statements, such as: typically an environmental report, a chairmen’s report and a financial review. But these are outside the actual financial statements thus outside the scope of a IASs (International Accounting Standards).
Posted in Blog | Tagged Balance sheet, Financial, Income statement |
By Admin on March 14, 2009
A large number of transactions recorded in ledger accounts means there is the possibility of errors occurring. For assuring the accuracy of the precedures. You can list all the balances. And the list will be extracted at frequeent intervals (say monthly).
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Posted in Blog | Tagged Balance sheet, Memeorandum |
By Admin on March 13, 2009
All transactions affect the accounting equation and are recorded in preparing financial statements. But the problem is all the transactions are cumbersome in a practical situation. It’s necessary to summarise all categories of transactions.
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Posted in Blog | Tagged Bookkeeping, Journals |
By Admin on March 13, 2009
We know, the route by which transactions are recorded is: Transactions –> Journals –> Ledger accounts –> Financial statements.
But what’s the difference of journals and ledger accounts?
Journals record the transactions of each day.
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Posted in Blog | Tagged Journals |
By Admin on March 12, 2009
A balance sheet must always satisfy the basic equation:
Assets = Proprietor’s capital + Liabilities
The balance sheet equation underlies the balance sheet in that every transaction of the enterprise affects the balance sheet twice.
The methods of setting out the balance sheet include: double-sided (or horizontal) format, vertical format.
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Posted in Blog | Tagged Assets, Balance sheet |
By Admin on March 11, 2009
It’s very important to differentiate the distinction between capital and revenue expenditure. The revenue expenditure should be counted into the expenditure of this period, but the capital expenditure should be counted into several periods. This will affect the profit and the income tax in this period (You should know the structure and principle of income statement).
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Posted in Blog | Tagged expenditure, revenue expenditure |
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