1) To know the financial positon of a business as on today, you need ________________________. A)Balance Sheet drawn as on today b)Balance Sheet of latest financial year c)Balance Sheet of last two years d)ncome Statement and Cash Flow Statement as on today
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
1) To know the financial positon of a business as on today, you need ________________________.
3) Mercury Ltd. issues Rs. 10 shares at a premium of Rs. 90. Totally 1 million shares were issued and subscribed fully. Entire amount is collected. How this transaction will appear in the financial statements?
4)Venus Ltd has acquired machinery worth of Rs. 1000 million. The company provides 10% depreciation under straight-line-method of depreciation for preparing Income Statement. For computing tax, it provides 15% depreciation under Written-down-value (WDV) method. If tax rate is 30%, the
5) On April 1, 2015, Alpha Ltd. raised Rs. 100 million through zero-coupon bond with a maturity period of 3 years. The maturity
6) Big Basket has an opening inventory of Rs. 30 million. It shows closing inventory at the end of the year as Rs. 50 million. Which one of the following statements hold true?
7)Profit on sale of fixed assets arises when:
9) Rolta Engineering acquired a machine for Rs. 50 million 6 years back and depreciated Rs. 30 million during the last 6 years. Its current book value is Rs. 20 million. It sold the machine for Rs. 16 million. In preparing cash flow statement, Rolta will recognize:
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10) A firm has total costs of $18000 when 2000 units are produced and $26000 when 5200 units are produced. During March, 4000 units were produced and sold for $8 each. What is the total variable cost?
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