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The difference between recognition and realization?
Realization: when sold and coverted to cash (or claims to cash) Recognition: when recorded in the financial statements.
What items might be in the financial statements but not actually on the balance sheet income statement statement of retained earnings or statement of cash flows?
Since the notes to the financial statements form part of the financial statements and are a component of financial statements, certain disclosures found in the notes may not be found in the balance sheet, income statement, statement of retained earnings or statement of cash flows.
Does The cash basis of accounting commonly results in financial statements that are not comparable from period to period?
Cash is the main transaction in an accounting , it will affect from period to period in financial statement
Which accounting principle requires that transaction should be recorded in the period they occurred?
There is no one accounting principle that requires that a transaction be recorded in the period it occurs (commonly referred to as accrual basis accounting). There is a conceptual statement that the Financial Accounting Standard Board has issued with regard to the use of accrual accounting. The Financial Accounting Standards Board has issued STATEMENT OF FINANCIAL ACCOUNTING CONCEPTS NO. 6: ELEMENTS OF FINANCIAL STATEMENTS which states in paragraph 134: Items that qualify under the definitions of elements of financial statements and that meet criteria for recognition and measurement are accounted for and included in financial statements by the use of accrual accounting procedures. The basis of accounting, whether cash basis or accrual, should be disclosed in the notes to the financial statements so that the financial statement reader is aware which method of accounting is in use. Generally accepted accounting principles (GAAP) does require the accrual basis of accounting; nevertheless, businesses can present their financial statements on a cash basis as long as proper disclosures are made. The financial statement opinion rendered by the external audit firm would also disclose that the cash basis of accounting is being used.
What is the most common and important financial statements?
Following are the most common and important financial statements: 1 - Income statement 2 - Balance sheet 3 - Cash flow statement
The difference between recognition and realization?
Realization: when sold and coverted to cash (or claims to cash) Recognition: when recorded in the financial statements.
Where is Cash flow per share reported?
Cash flow per Share is sometimes reported in the financial press. It is not to be reported on the financial statements.
What are the financial statements in business?
Income StatementBalance SheetStatement of Cash FlowStatement of Change in EquityNotes to Financial Statement
What items might be in the financial statements but not actually on the balance sheet income statement statement of retained earnings or statement of cash flows?
Since the notes to the financial statements form part of the financial statements and are a component of financial statements, certain disclosures found in the notes may not be found in the balance sheet, income statement, statement of retained earnings or statement of cash flows.
How an accountant knows when to record revenues in the financial statements?
The accounting standards say that revenues are recorded when they are "realized or realizable." What this means, is that as soon as you have performed the work that gives you the right to that cash, you record the revenue for it (even if you have not yet collected cash).
Does The cash basis of accounting commonly results in financial statements that are not comparable from period to period?
Cash is the main transaction in an accounting , it will affect from period to period in financial statement
Importance of cash flow statements?
Cash flow satement is an important financial statement as it tells about the cash inflows and outflows from different business activities and this information is not available in any other financial statement.
Is a cash flow statement part of a financial statement?
Yes cash flow statement is part of financial statements and mandatory to provide along with income statement and balance sheet.
Which accounting principle requires that transaction should be recorded in the period they occurred?
There is no one accounting principle that requires that a transaction be recorded in the period it occurs (commonly referred to as accrual basis accounting). There is a conceptual statement that the Financial Accounting Standard Board has issued with regard to the use of accrual accounting. The Financial Accounting Standards Board has issued STATEMENT OF FINANCIAL ACCOUNTING CONCEPTS NO. 6: ELEMENTS OF FINANCIAL STATEMENTS which states in paragraph 134: Items that qualify under the definitions of elements of financial statements and that meet criteria for recognition and measurement are accounted for and included in financial statements by the use of accrual accounting procedures. The basis of accounting, whether cash basis or accrual, should be disclosed in the notes to the financial statements so that the financial statement reader is aware which method of accounting is in use. Generally accepted accounting principles (GAAP) does require the accrual basis of accounting; nevertheless, businesses can present their financial statements on a cash basis as long as proper disclosures are made. The financial statement opinion rendered by the external audit firm would also disclose that the cash basis of accounting is being used.
What is full set accounting?
Full set accounting refers to a set of financial statements. The statements are made up of financial position, comprehensive income, changes in equality, and cash flow.
What is the most common and important financial statements?
Following are the most common and important financial statements: 1 - Income statement 2 - Balance sheet 3 - Cash flow statement
ARE Cash discounts AN asset or liability?
Cash discounts are a liability.
