...Preparation of Balance Sheet A balance sheet allows you to see at a glance what your company’s assets and liabilities are. The balance sheet is basically a summary of what you own and what you owe. Assets, liabilities and owner’s capital are listed as of a certain date, usually at the end of a month, quarter or fiscal year. Your balance sheet gives you a way to determine the value of your business at any particular time. 1. * Preparation of balance sheet of company is very necessary, because Indian Company law 1956 gives strict instruction about the format of balance sheet of a company. A company can make balance sheet according to the form given in Part I of schedule VI of company law 1956. A company can also make balance sheet summary form, but it has to attach its schedule in which explanation of different components are given. We are explaining different components of balance sheet of company which will be helpful for students to prepare balance sheet of company. [* Remember the form of balance sheet under Section 211] You should remember balance sheet and its all components thoroughly. It can be made either horizontal or vertical form. But total of assets should be equal to total of liabilities. Here, I am explaining these components. Assets Side of Balance Sheet 1. * Assets are written in right side of company’s balance sheet. In these assets, we include. 1. 1. * 1. Fixed Assets We will show all fixed assets which are purchased...
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...PA RT T WO c ha p te r Understanding Financial Statements and Cash Flow 2 LO 1 LO 2 LO 3 LO 4 Financial Statements, Taxes, and Cash Flow W hen a company announces a “write-off,” it frequently means that the value of the company’s assets has declined. AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO: Differentiate between accounting value (or “book” value) and market value. Distinguish accounting income from cash flow. Explain the difference between average and marginal tax rates. Determine a firm’s cash flow from its financial statements. For example, in the first quarter of 2009, luxury homebuilder Toll Brothers said it was writing down $157 million in assets, much of which was a reflection of the reduced value of land the company owned. Of course, Toll Brothers was not the only homebuilder suffering. Hovnanian Enterprises announced it would take a $132 million write-off, and Centex Corp. announced a $590 million writeoff. At the same time, D. R. Horton, the largest homebuilder by volume, had a much smaller write-off of only $56 million. However, D. R. Horton had already written off $1.15 billion in the fourth quarter of 2008. So did stockholders in these homebuilders lose hundreds of millions of dollars (or more) because of the write-offs? The answer is probably not. Understanding why ultimately leads us to the main subject of this chapter: that all important substance known as cash flow. Visit us at www.mhhe.com/rwj I 22 n this chapter, we examine...
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...AN IDEAL APPROACH TO STANDARD COSTING By Jitesh Chandak INTRODUCTION Before you start your study on standard costing you must be clear in your mind that you are going to study a chapter which wants more practice and hard work to develop a strong and sound concept. Costing can be defined as “The technique and process of ascertaining costs.” Standard costing is a technique, which uses standards for cost and revenue for the purpose of control through variance analysis. We can say standard costing is a technique of costing, which also established control over costing. Standard cost can be defined “As a pre-determined cost which is calculated from management’s standard of efficient operation and relevant necessary expenditure. It may be used as a basis for price fixing and for control through variance analysis.” Hence we can say standard costs are pre-determined estimates of cost of a single unit or a number of units of a product service. Uses of Standard Cost: - 1. Use of standard cost is an effective way for planning and controlling costs. 2. Pricing decisions and decisions involving submission of quotations, answering tenders etc are also facilitated by the use of standard costs. 3. Identification and measurement of variances from standards have been made possible with the use of standard cost, with a view to improve performance or to correct loose standards, if any. 4. Facilitates management by exceptions...
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...Course Project Introduction | | In this course, you will have one course project and will require two different assignments – Course Project Part I and Course Project Part II. This project will test your knowledge of all of the project management tools and techniques that we'll cover in this course. Before you begin, please review the PM 586 Course Project Tour. [You'll find the link above.] This audio/visual tool will take you on a "tour" of the project and will highlight many of the logistics and "need to know" information to successfully complete the two parts of the project. In addition, this course project does require use of Microsoft Project. If you are not familiar with the software or just need a "refresher," please run through the tutorials above or look at the end of the chapters in the textbook for a mini-lesson of the software. Course Project Description | | Johann Seitz founded the SEITZ Corporation in 1982. The main products of the firm were small- to medium-sized plastic bottles and containers, used mainly in the food and dairy industries. By 1985, the annual sales of the corporation had reached $31 million and the firm enjoyed a dominant market position in the upper Midwest. In 1998, Walter and Teri Seitz, Johann’s grandchildren, assumed the day-to-day operation of the business. Teri Seitz was a somewhat unstructured, but diligent, student of the latest business school theory and decided that in order to meet increased competition, especially...
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...Accounting FOR DUMmIES 4TH ‰ EDITION By John A. Tracy, CPA Accounting For Dummies®, 4th Edition Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2008 by Wiley Publishing, Inc., Indianapolis, Indiana Published by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online at http:// www.wiley.com/go/permissions. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All...
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...explicit measurement of risk. Financial projections do not eliminate the sources of risk. However, they do help the decision‐maker find which risks are important and how realizations of those risks will affect the company. Finally, pro forma statements identify the amount of funds needed and assist in deciding on the appropriate structure for the funding. It is simply not possible to develop an adequate funding plan without relying on pro forma statements. Pro forma statements provide financial estimates of the impact of a business plan. As such, pro formas incorporate the following information: • A marketing plan indicating what will be sold, how it will be sold, and how the products will be priced; • A production plan outlining fixed asset requirements, production volume and timing, and inventory management; • A human resources plan that estimates the number and type of employees together with compensation schemes; • An accounting plan that incorporates managerial controls and specifies financial accounting...
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...Accounting FOR DUMmIES 4TH ‰ EDITION By John A. Tracy, CPA Accounting For Dummies®, 4th Edition Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2008 by Wiley Publishing, Inc., Indianapolis, Indiana Published by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online at http:// www.wiley.com/go/permissions. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All...
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...Assignment brief – QCF BTEC (Level 3)Assignment front sheet | Qualification | Unit number and title | BTEC Level 3 90 Credit Diploma in Business | Unit 2 Business Resources | Learner name | Assessor name | | Rasheed Adedokun, Michael Boadu | Date issued | Hand in deadline | Submitted on | 8.12.14 | 18.12.14 | | | | Assignment title | Business Resources ;- Assignment 2 | In this assessment you will have opportunities to provide evidence against the following criteria. Indicate the page numbers where the evidence can be found. | Criteria reference | To achieve the criteria the evidence must show that the learner is able to: | | Task no. | | Evidence | P5 | Interpret the contents of a trading and profit and loss account and balance sheet for a selected organisation | | 1 | | | P6 | Illustrate the use of budgets as a means of exercising financial control of a selected company | | 1 | | | P7 | Illustrate the financial state of a given business | | 2 | | | 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 an organisation | | 2 | | | M4 | Analyse the reasons why costs need to be controlled to budget | | 1 | | | D2 | Evaluate the adequacy of accounting ratios as a means of monitoring the state of the business in a selected organisation. | | 2 | | | D3 | Evaluate the problems...
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...FINANCIAL STATEMENT ANALYSIS: A TOOL FOR PERFORMANCE EVALUATION A Case Study of Oceanic Bank By IBRAHIM UMAR PGA/09/07766 M.Sc. Assignment Submitted to Dr. M.I. Kida CNA Department of Accountancy University of Maiduguri 2Financial Statement Analysis: A Tool for Performance Evaluation Jan. 2010 3Financial Statement Analysis: A Tool for Performance Evaluation ABSTRACT Financial statements are prepared to meet external reporting obligations and also for decision making purposes. They play a dominant role in setting the framework of managerial decisions. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements. There are various methods or techniques that are used in analyzing financial statements, such as comparative statements, schedule of changes in working capital, common size percentages, trend analysis and ratios analysis. This study intends to analyze financial statement of Oceanic bank in Nigeria in order to come up with an in-depth fact finding on its performance and to see if there is any connection between the recent global economic crisis and its overall performance. 4Financial Statement Analysis: A Tool for Performance Evaluation INTRODUCTION 1.1 Background Financial statement represents...
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...MASTER MINDS - QUALITY EDUCATION BEYOND YOUR IMAGINATION 8. BUDGETARY CONTROL 1. DEFINE THE TERM BUDGET. Definition: Budget is a financial and /or quantitative statement, prepared and approved prior to a defined Period of time of the policy to be pursued during that period for the purpose of attaining a given objective. It may include income, expenditure and employment of capital. Features: 1. 2. 3. 4. Financial and/or Quantitative Statement. Futuristic prepared and approved prior to a defined period of time. Goal Oriented for the purpose of attaining a given objective. Components Income, Expenditure and Employment of Capital. 2. WHAT ARE THE OBJECTIVES OF BUDGETING/PERFORMANCE BUDGETING? The objectives of Budgeting are 1. To encourage selfstudy in all aspects of a Company's operations. 2. To get all members of management to “put their heads” to the basic question of how the business should be run, to make them of a coordinated team operating in unison towards clearly defined objectives. 3. To promote the planning process and provide a sense of direction to every member of the organization. 4. To force a definition and crystallization of Company policies and aims. 5. To increase the effectiveness with which people and capital are employed. 6. To disclose areas of potential improvement in the Company’s operations. 7. To stimulate study of relationship of the Company to its external economic environment for improving the effectiveness of its direction...
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...merit, its sponsorship by the U.S. Small Business Administration does not necessarily constitute an endorsement of the views and opinions of the authors or the products and services of the companies with which they are affiliated. All of SBA's programs and services are extended to the public on a nondiscriminatory basis. ______________________________________________________________________________ TABLE OF CONTENTS INTRODUCTION 1 COVER SHEET 1 STATEMENT OF PURPOSE (MISSION STATEMENT) THE BUSINESS Legal Structure 2 Description of the Business 2 Products or Services 3 Location 3 Management 3 Personnel 3 Methods of Record Keeping 3 Insurance 4 Security 4 Summary 5 MARKETING Target Market 5 Competition 5 2 Methods of Distribution 5 Advertising 7 Pricing 7 Product Design 7 Timing of Market Entry Location 8 Industry Trends 8 7 FINANCIAL DOCUMENTS Summary of Financial Needs 8 Sources and Uses of Funds Statement Cash Flow Statement (Budget) 9 Three-year Income Projection 10 Break-even Analysis Graph 15 Actual Performance Statements 16 Balance Sheet 16 Summary 21 SUPPORTING DOCUMENTS Personal Resumes 22 Personal Financial Statement 22 Credit Reports 22 Copies of Leases 22 Letters of Reference 22 Contracts 22 Legal Documents 23 Miscellaneous Documents 23 9 PUTTING YOUR BUSINESS PLAN TOGETHER KEEPING YOUR BUSINESS PLAN CURRENT Making...
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...process of preparing financial statements for a business. The three key financial statements are the income statement, balance sheet, and statement of cash flows, and they serve two broad purposes: to report on the current financial position of the company, and to show how well the company performs over a period of time. Investors, creditors, and other interested parties rely on such information to find out whether a business is making or losing money, and they depend on financial accountants to help ensure that these statements are materially correct and understandable. Accounting Details in Different Kinds of Financial Statements The three key financial statements are the income statement, balance sheet, and statement of cash flows. All three record the same daily accounting transactions occurring in a business, but each presents the facts slightly differently. • Income statement: The income statement shows a company’s results of operations. Using this statement, you can see if a business has income or loss during the financial period. All the company’s revenue, expenses, gains, and losses appear on this financial statement. • Balance sheet: The balance sheet shows the health of a business from the day it started operations to the specific date of the balance sheet report.Therefore, it reflects the business’s financial position. The balance sheets lists the company’s assets (resources such as cash and inventory), liabilities (claims against the assets), and equity (the difference...
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...assigned to an inventory account on the balance sheet. When the goods are sold, the costs are released from inventory as expenses (typically called cost of goods sold) and matched against sales revenue. Since product costs are initially assigned to inventories, they are also known as inventoriable costs. Product costs are not necessarily treated as expenses in the period in which they are incurred. Rather, as explained above, they are treated as expenses in the period in which the related products are sold. This means that a product cost such as direct materials or direct labor might be incurred during one period but not recorded as an expense until a following period when the completed product is sold. Period Cost Period costs are all the costs that are not product costs. For example, sales commissions and the rental costs of administrative offices are period costs. Period costs are not included as part of the cost of either purchased or manufactured goods; instead, period costs are expensed on the income statement in the period in which they are incurred using the usual rules of accrual accounting. Keep in mind that the period in which a cost is incurred is not necessarily the period in which cash changes hands. For example, as discussed earlier, the costs of liability insurance are spread across the periods that benefit from the insurance—regardless of the period in which the insurance premium is paid. Variable Cost and Fixed Costs All...
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...alternatives? • money is anything that is universally acceptable as a medium of exchange • further, money generally has the characteristics of being divisible and a store of value • examples: currency, EFTPOS, digital money. 3. Having recently inherited some money from a rich uncle, you are considering investing the funds in financial assets. You are aware that financial assets exhibit four main attributes. List and discuss these attributes. In your answer give examples to explain your points. Four attributes are: • return or yield • risk • liquidity • time-pattern of the cash flows Examples: 1. Term deposit with a bank: • generally pays a fixed interest rate until maturity • guaranteed by the bank—low risk (low return) • funds usually are not available until maturity (less liquidity) • interest paid periodically; principal repaid at maturity 2. Shares in a corporation: • generally pay a dividend twice a year—amount determined by board • no performance guarantees—higher risk (expect higher return) • usually easy to sell shares at current price through the stock exchange • dividends received half-yearly, if declared 4. The major financial institutions within the international markets fall into five classifications. Identify and briefly explain each of these classifications. Give an example of different...
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...should be rendered. Figure 7-1 shows you an example of a CSS rule, which as you can see is made up of two parts: ❑ The selector, which indicates which element or elements the declaration applies to (if it applies to more than one element, you can have a comma-separated list of several elements) ❑ The declaration, which sets out how the elements should be styled The declaration is also split into two parts, separated by a colon: ❑ A property, which is the property of the selected element(s) that you want to affect, in this case the font-family property. ❑ A value, which is a specification for this property; in this case it is the Arial typeface. A style sheet is a grouping of formatting instructions that can control the appearance of many HTML pages at once. If style sheets accomplished this and nothing else, they’d save millions of dollars worth of Webmasters’ time and become an integral part of most Web publishing projects. But they aim to do this and much more as well. The HTML style sheet standard enables you to set a great number of formatting characteristics that were never possible before with any amount of effort. These include exacting typeface controls, letter and line spacing, margins and page borders, and expanded support for non-European languages and characters. They also enable sizes and other measurements to be specified in familiar units such as inches, millimetres, points, and picas. You can also use style sheets to precisely position graphics and text...
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