Entity A started its operations on January 1, 20x1. On this date, Entity A's equity consisted of P2M share capital, which were issued also on this date. Entity A's functional currency is the Philippine peso (P). However, it wishes to present its 20x1 financial statements into Chinese yuan (¥). The following information was gathered on December 31, 20x1, after a year of operations. Total assets P10M Total liabilities PSM Share capital Retained earnings Total liabilities and equity 2M 3M P10M Income P7M Expenses Profit (4M) P3M Relevant exchange rates: January 1, 20x1 (historical rate for the share capital) P5:X1 Average rate December 31, 20x1 (closing rate) PS:¥1 P10:¥1

Q: What is the profitability index? When is it used?

A: Capital investment analysis: Capital investment analysis is the process by which management plans,…

Q: What formula is used to determine net profit

A: Net profit is the actual income earned by an organization after paying all the expenses. It is…

Q: Briefly explain the difference between gross profit, net profit and EBIT.

A: Gross Profit is computed by deducting Cost of goods sold from Sales. Gross profit is the profit a…

Q: When are credits increases? When are credits decreases?

A:

Q: e and net revenue increase but net profit margin decrease and net revenue increase, net profit…

A: The Net Profit Margin (also known as "Profit Margin" or "Net Profit Margin Ratio") is a financial…

Q: Why profit shows as liability and loss shows as asset?

A: The assets and expenses have the debit normal balance. The liabilities and revenue have credit…

Q: What is the meaning of economic value added (EVA)? What does it measure? Why is it important?

A: Economic value added ("EVA") measures a company's financial performance based on the excess wealth…

Q: What are the unofficial earning measures of revenue?

A: Unofficial earning measures of revenue are often called as non-GAAP (Generally Accepted Accounting…

Q: What is the lnventory·turnover ratio?

A: Inventory turnover ratio: Inventory turnover ratio indicates how many times a corporation has sold…

Q: What is the difference between direct and indirect expenses?

A: Expenses: Expenses are costs incurred for the operations of a business. The costs incurred for…

Q: What is passive income? Explain and give examples.

A: Passive Income  An income from a source which is somewhat diverse than  a contractor or an employer…

Q: What is profit contribution

A: The profit is calculated as difference between total revenue earned and total expenses incurred.

Q: what is meant by Profit and Cashflow and how they are different?

A: Each and every business organization deals in either goods or offering services to their customers…

Q: what are the differences between profit and cash?

A: Profit and cash are two quite related but two different things.

Q: What is purchase returns?

A:

Q: In accounting terms, what is the difference between profit and loss

A: Accounting is based on the principle of double-entry. It may be described as how a company records…

Q: Why is profit shown on liabilities side?

A: This is because of separate entity principle of accounting which says that the owner and business…

Q: allocation of income or loss to have economic effect

A: Income or loss is the net result of operational activities of a business conducted during a…

Q: How does EVA differ from accounting profit?

A: Introduction: Economic value added is the sum of net earnings over capital costs. EVA corresponds to…

Q: What are the different terms used to refer to the rate of return?

A: Rate of return is an expected profit on an investment by a investor. It is a rate at which investor…

Q: What is the definition net cost of purchases?

A:

Q: How does accounting rate of return (ARR) differ from the internal rate ofreturn (IRR)?

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: What is the difference between a contribution approach income statement and a traditionalapproach…

A: Contribution Approach Income Statement: Under this approach, contribution amount is the main focus…

Q: What is the transaction's profit

A: This question deals with the transaction's profit?

Q: What are the definition criteria of an income and an expense?

A: Ans. Income is money what an individual or business receives in exchange for producing goods or…

Q: What is Capitalized-Equivalent Cost?

A: Cost is the price of something that buyer pays to the seller to purchase that thing.

Q: What makes up gross income?

A: Gross income is direct income of a business generated from direct revenues of the company. It is an…

Q: How do gross profits, operating income, and net income differ

A: In finance when making or analyzing an income statement we look into different types of income or…

Q: What impact does an increase in expenses have on net income

A: In accounting we say that: Net income = Total revenue - total expenses