The cash flow statement (or statement of cash flows) is one of the main financial statements. The cash flow statement explains how a company's cash and cash equivalents have changed during a specified period of time.
The cash flow statement is organized into three sections:
1. Cash provided and used in operating activities,
2. Cash provided and used in investing activities,
3. Cash provided and used in financing activities.
Under the indirect method of preparing and presenting the cash flow statement, the operating activities section begins with the net income during the period of the statement. Since the company's net income was calculated and reported under the accrual basis of accounting, the amount of net income needs to be adjusted to a cash amount. The first adjustment is to add back the amount of depreciation, depletion, and amortization expenses, since these expenses had reduced net income but did not reduce the company's cash. Next, any gains or losses on the sale of long-term assets used in the business are listed, since the entire amount received from the sale is reported as investing activities. Lastly, the changes in the current assets (other than cash) and the changes in current liabilities are listed. For example, if inventory has increased, the amount of the increase in inventory is subtracted because additional cash would have been used to increase the amount of inventory. The amount by which a current liability decreased is also subtracted, since it is assumed that cash was used to decrease the current liability. All of the items reported in the operating activities section are combined into a final number: the net amount of cash provided by operating activities.
The second section of the cash flow statement reports the investing activities. The changes in the long-term asset account balances are reported in this section. For example, if a company's long-term investment in another company has increased during the period, the amount of the increase is reported as a negative amount in the investing activities section—an indication that cash was used. The same is true for the purchase of property, plant and equipment for use in the business—an increase in the equipment account indicates that cash was used to purchase equipment. If a long-term investment or plant asset is sold, the entire proceeds from the sale are reported as a positive amount in the investing activities section. This indicates that cash was provided or increased from the sale. (Any gain or loss on the sale is an adjustment to the net income reported in the operating activities section of the statement.)
The third section of the cash flow statement contains the company's financing activities. This section lists the changes in long-term liabilities and stockholders' equity. For example, if Bonds Payable has increased by $1,000,000, it is assumed that cash of $1,000,000 was provided. The $1,000,000 will appear as a positive amount in the financing activities section of the statement. If Bonds Payable decreased, then the amount of the decrease will be reported as a negative amount—indicating that cash was used to retire the bonds. The amount of dividends declared and paid will also appear as a negative amount, since cash was used. If the company sells some of its shares of stock, the amount received will be reported as a positive amount since it provided cash. If the company purchases some of its shares of stock, the amount will appear as a negative amount in the financing activities section because cash was used.
In addition to the three main sections of the cash flow statement, it is also necessary to disclose significant noncash transactions (e.g. exchanging stock for land) and other items required by generally accepted accounting principles.
Sample Cash Flow Statement Questions
1) The conversion of bonds into common stock is an example of _____________________ information that is reported outside of the three major sections of the statement of cash flows.
2) Companies using the indirect method must also disclose the amount paid for ___________ and income taxes.
3) Cash __________ (plural) from financing activities occur when a corporation issues equity securities, bonds, and long-term notes.
4) The purchase of _____________ stock will be reported as a decrease in the cash provided by financing activities.
5) The ________ (gain, loss) on the sale of an asset used in a company's business will be a deduction to the cash provided by operating activities under the indirect method.
6) The _________________ (similar to repurchase or retirement) of bonds payable will decrease the cash provided by financing activities.
7) The 2006 statement of cash flows of ABC Corp. explains the change in the cash and ________ equivalents from December 31, 2005 through December 31, 2006.
8) The entire____________ from the sale of an asset used in the business will be reported as an increase in the cash provided by investing activities.
9) An increase in Accounts __________ would be an increase in the cash provided by operating activities under the indirect method.
10) Cash _________ (opposite of inflows) from investing activities occur when a corporation purchases equipment to be used in the business and when it makes a long-term investment in another corporation.
Tuesday, June 17, 2008
Monday, June 16, 2008
Info Beasiswa
Banyak cara untuk mendapatkan beasiswa alias sekolah tetapi tidak usah membayar..atau bisa sekolah tetapi meminimalkan uang untuk bayar biaya pendidikan.. Ingat biaya pendidikan makin lama makin mahal, jika anda mau menabung..yernyata tidak mampu menyelesaikan persoalan biaya pendidikan,, Coba aja nabung..dijamin uang kita tidak akan bertambah..sudah dippotomng biaya administrasi oleh bank...belum lagi terkena inflasi.Tetapi pemerintah malah melakukan gerakan menabung AYO menabung di bank..padahal kalo kita investasikan,,..wooo begiitu banyak hasilnya...apakha masih layak kita mengajarkan menabung..apaha sudah bukan jamannya lagi untuk melakukan investasi...kalo kita tertarik untuk investasi salah satunya dengan cara mencarai beasiswa dimana??? banyak beasiswa yang ditawarkan, silahkan buka mau sekolah gratis...tetapi kita juga harus investasi melalui pendidikan..bagaimana mau dapat beasiswa kalo tidak cerdas atau pinter?? apa ada lembaga yang mau memberikan beasiswa untuk anak yang tidak piter atau cerdas??
Break-even Point & Cost Estimation
Knowing how costs change as volume or activities change is helpful when making some business decisions. For example, if most of a product's costs are fixed, then a company's total costs will increase only slightly when more units are produced and sold. Understanding this cost behavior might lead to special promotions that will increase profits and sales.
Costs and expenses that do not increase with reasonable increases in volume are known as fixed costs. Examples of fixed costs are the salaries of managers, property tax and depreciation.
Costs and expenses that increase in total as volume increases are variable costs and expenses. A product's direct material, direct labor, and some overhead costs are variable costs. Two examples of variable overhead costs might be the electricity to power the equipment in the manufacturing process and factory supplies.
Some costs are mixed costs-partly fixed and partly variable. An example might be the maintenance costs. You can determine how much of a mixed cost is fixed and how much is variable by using several techniques. One technique is to plot the costs on a graph where the y-axis is the total cost and the x-axis is the amount of volume or activity. If the plotted points form a straight line, you can extend the line through the y-axis. The point where the line intersects the y-axis is the fixed cost. Another technique is the high-low method. With this method, you compare the total cost at the highest level of activity to the total cost at the lowest level of activity. The variable cost rate is the difference in total cost divided by the difference in the volume of activity. A more sophisticated technique for separating the fixed and variable costs in a mixed cost is regression analysis. This technique computes the best fitting line through the plotted points by utilizing the least-squares method.
Breakeven analysis utilizes the concept known as contribution margin. Contribution margin is sales dollars minus variable costs and variable expenses. If a product sells for $10 and its variable costs and variable expenses are $6, the contribution margin is $4 per unit. The formula for the breakeven point in units of product is the total fixed costs divided by the contribution margin per unit. For example, if the total fixed costs are $40,000 and the contribution margin per unit is $4, the breakeven point is 10,000 units ($40,000 divided by $4).
Sample Break-even Point & Cost Estimation Questions
1) When using one of the techniques for analyzing a mixed cost, it is important to prepare a scatter- ______ of all of the observations to be certain that the data does not contain an outlier.
2) The coefficient of _______________, represented by r2, indicates the percentage change in the dependent variable (e.g. total cost in the shipping department) that is explained by the change in the independent variable (e.g. the number of parcels shipped).
3) The breakeven point in sales dollars can be found by dividing the fixed costs and expenses by the contribution margin _______ or percentage.
4) Make or buy decisions usually rely on cost behavior in the ________-run.
5) A high degree of correlation does not guarantee that there is a _________-and-effect relationship between the independent and dependent variables.
6) A company has one product with a selling price of $20 and variable costs and expenses of $8 per unit. The fixed costs and expenses are $32,000 and the company has a target profit of $28,000. To reach the target profit, the company must sell ________ thousand units of the product.
7) A product sells for $20 and it has variable costs and expenses of $8 per unit. The contribution margin ratio for this product is ________ percent.
8) A product sells for $30 and has variable costs and expenses of $18 per unit. The fixed costs and expenses are $20,000. The breakeven point in sales dollars is _________ thousand dollars.
9) Total fixed costs and expenses divided by the contribution margin per unit gives you the breakeven point in ________.
10) The number of independent variables in multiple regression is ______ or more.
Costs and expenses that do not increase with reasonable increases in volume are known as fixed costs. Examples of fixed costs are the salaries of managers, property tax and depreciation.
Costs and expenses that increase in total as volume increases are variable costs and expenses. A product's direct material, direct labor, and some overhead costs are variable costs. Two examples of variable overhead costs might be the electricity to power the equipment in the manufacturing process and factory supplies.
Some costs are mixed costs-partly fixed and partly variable. An example might be the maintenance costs. You can determine how much of a mixed cost is fixed and how much is variable by using several techniques. One technique is to plot the costs on a graph where the y-axis is the total cost and the x-axis is the amount of volume or activity. If the plotted points form a straight line, you can extend the line through the y-axis. The point where the line intersects the y-axis is the fixed cost. Another technique is the high-low method. With this method, you compare the total cost at the highest level of activity to the total cost at the lowest level of activity. The variable cost rate is the difference in total cost divided by the difference in the volume of activity. A more sophisticated technique for separating the fixed and variable costs in a mixed cost is regression analysis. This technique computes the best fitting line through the plotted points by utilizing the least-squares method.
Breakeven analysis utilizes the concept known as contribution margin. Contribution margin is sales dollars minus variable costs and variable expenses. If a product sells for $10 and its variable costs and variable expenses are $6, the contribution margin is $4 per unit. The formula for the breakeven point in units of product is the total fixed costs divided by the contribution margin per unit. For example, if the total fixed costs are $40,000 and the contribution margin per unit is $4, the breakeven point is 10,000 units ($40,000 divided by $4).
Sample Break-even Point & Cost Estimation Questions
1) When using one of the techniques for analyzing a mixed cost, it is important to prepare a scatter- ______ of all of the observations to be certain that the data does not contain an outlier.
2) The coefficient of _______________, represented by r2, indicates the percentage change in the dependent variable (e.g. total cost in the shipping department) that is explained by the change in the independent variable (e.g. the number of parcels shipped).
3) The breakeven point in sales dollars can be found by dividing the fixed costs and expenses by the contribution margin _______ or percentage.
4) Make or buy decisions usually rely on cost behavior in the ________-run.
5) A high degree of correlation does not guarantee that there is a _________-and-effect relationship between the independent and dependent variables.
6) A company has one product with a selling price of $20 and variable costs and expenses of $8 per unit. The fixed costs and expenses are $32,000 and the company has a target profit of $28,000. To reach the target profit, the company must sell ________ thousand units of the product.
7) A product sells for $20 and it has variable costs and expenses of $8 per unit. The contribution margin ratio for this product is ________ percent.
8) A product sells for $30 and has variable costs and expenses of $18 per unit. The fixed costs and expenses are $20,000. The breakeven point in sales dollars is _________ thousand dollars.
9) Total fixed costs and expenses divided by the contribution margin per unit gives you the breakeven point in ________.
10) The number of independent variables in multiple regression is ______ or more.
Sunday, June 15, 2008
Bookkeeping
In years past, bookkeeping entailed writing/recording debit and credit entries into a journal. Debits were entered on the left and credits on the right. After journalizing the transactions, the amounts were posted to the proper accounts in the general ledger. Because this tedious and time consuming process usually resulted in errors, the bookkeeper prepared a trial balance. A trial balance showed that the debit balances in the accounts added to the same total as the credit balances. After the bookkeeping errors were corrected, the accountant prepared adjusting entries followed by the financial statements.
Today, computer software has eliminated much of the manual journalizing and posting. The bookkeeping is still taking place, but it is being done within the accounting software. For example, each time a check is prepared the Cash account is credited and the software prompts the person at the computer to enter the account to be debited. When a sales invoice is prepared using the accounting software, Accounts Receivable is automatically debited and the Sales account is credited. In addition, the individual customer's record is updated as well as inventory and the cost of the goods sold.
Since the software demands that the debits and credits are equal in amount, and since the computer doesn't miscalculate balances, most of the clerical errors are eliminated.
At larger companies, there are now accounts receivable clerks, accounts payable clerks, payroll clerks, cost accounting clerks, and others to assist with the bookkeeping.
Sample Bookkeeping Questions
1) A loan payment will usually consist of two components: ______________ and interest.
2) If employees are paid biweekly, they will receive twenty-______ paychecks per year.
3) A listing of the accounts receivable according to the dates of the open invoices is an _________ of receivables.
4) The matching principle requires that the ___________ incurred to earn revenues be reported in the same period as the revenues.
5) The allocation of a plant asset's cost to expense over its useful life.
6) A journal is the book of original _________.
7) Asset and revenue accounts are contained in the general __________.
8) Debit is associated with this side of an account.
9) Revenue accounts will normally have this type of balance.
10) Gross profit is sales minus the cost of goods ______.
Today, computer software has eliminated much of the manual journalizing and posting. The bookkeeping is still taking place, but it is being done within the accounting software. For example, each time a check is prepared the Cash account is credited and the software prompts the person at the computer to enter the account to be debited. When a sales invoice is prepared using the accounting software, Accounts Receivable is automatically debited and the Sales account is credited. In addition, the individual customer's record is updated as well as inventory and the cost of the goods sold.
Since the software demands that the debits and credits are equal in amount, and since the computer doesn't miscalculate balances, most of the clerical errors are eliminated.
At larger companies, there are now accounts receivable clerks, accounts payable clerks, payroll clerks, cost accounting clerks, and others to assist with the bookkeeping.
Sample Bookkeeping Questions
1) A loan payment will usually consist of two components: ______________ and interest.
2) If employees are paid biweekly, they will receive twenty-______ paychecks per year.
3) A listing of the accounts receivable according to the dates of the open invoices is an _________ of receivables.
4) The matching principle requires that the ___________ incurred to earn revenues be reported in the same period as the revenues.
5) The allocation of a plant asset's cost to expense over its useful life.
6) A journal is the book of original _________.
7) Asset and revenue accounts are contained in the general __________.
8) Debit is associated with this side of an account.
9) Revenue accounts will normally have this type of balance.
10) Gross profit is sales minus the cost of goods ______.
LuluS !))%
ankhirnya teman-teman klas XII Sosial 2 SMA Kolese De Britto mampu lulus semua, setealh terjadi drama yang cukup menegangkan, dan pengumuman kelulusan dibacakan di aula SMA Kolese de Britto,berdasarkan jurusan. mulai dari jurusan bahasa..IPS..dan terakhir IPA Maka dapat diketahui bahwa semua peserta ujuan LULUS . dengan kata lain SMA Kolese De britto semuanya lulus seperti tahun sebelumnya (2007)
Saturday, June 14, 2008
Balance Sheet
The balance sheet is one of the main financial statements. It is also known as the statement of financial position. The balance sheet reports the amount of assets, liabilities, and stockholders' (or owner's) equity at a specific moment (or point in time).
The balance sheet usually reports assets by classifications such as current assets, investments, property, plant and equipment, and other assets. Liabilities are classified as current liabilities and long-term liabilities.
The items and amounts reported on the balance sheet reflect the cost principle, matching principle, conservatism, going concern, and other basic principles as well as the more detailed rules included in the pronouncements issued by the Financial Accounting Standards Board (FASB).
Typical assets listed on the balance sheet include cash, accounts receivable, inventory, supplies, prepaid insurance, land, buildings, equipment, and intangible assets such as goodwill.
Typical liabilities include notes payable, accounts payable, wages payable, interest payable, income taxes payable, and bonds payable.
Stockholders' equity is the difference between the amounts reported for assets and liabilities.
Sample Balance Sheet Questions
1) A company's own stock that has been repurchased but has not been retired is __________________ stock.
2) The basic _________________ equation is A = L + OE.
3) The accounting principle that prevents assets from being reported at their current value.
4) The balance sheet classification under which a company reports customer deposits and receipts for services that have not yet been performed.
5) Banks and others who have lent money or supplied goods and services on credit.
6) A detailed listing of a company's accounts receivable sorted by the date of sale or the due date of the receivable is known as an ___________ of accounts receivable.
7) Money market accounts and a U.S. Treasury bill that matures in 45 days are examples of cash _______________________.
8) A balance sheet issued between the end-of-year balance sheets is referred to as an __________________ financial statement.
9) Balance sheet accounts are often referred to as real or ____________________ accounts.
10) The cost flow assumption that will result in older costs remaining on the balance sheet. (acronym)
The balance sheet usually reports assets by classifications such as current assets, investments, property, plant and equipment, and other assets. Liabilities are classified as current liabilities and long-term liabilities.
The items and amounts reported on the balance sheet reflect the cost principle, matching principle, conservatism, going concern, and other basic principles as well as the more detailed rules included in the pronouncements issued by the Financial Accounting Standards Board (FASB).
Typical assets listed on the balance sheet include cash, accounts receivable, inventory, supplies, prepaid insurance, land, buildings, equipment, and intangible assets such as goodwill.
Typical liabilities include notes payable, accounts payable, wages payable, interest payable, income taxes payable, and bonds payable.
Stockholders' equity is the difference between the amounts reported for assets and liabilities.
Sample Balance Sheet Questions
1) A company's own stock that has been repurchased but has not been retired is __________________ stock.
2) The basic _________________ equation is A = L + OE.
3) The accounting principle that prevents assets from being reported at their current value.
4) The balance sheet classification under which a company reports customer deposits and receipts for services that have not yet been performed.
5) Banks and others who have lent money or supplied goods and services on credit.
6) A detailed listing of a company's accounts receivable sorted by the date of sale or the due date of the receivable is known as an ___________ of accounts receivable.
7) Money market accounts and a U.S. Treasury bill that matures in 45 days are examples of cash _______________________.
8) A balance sheet issued between the end-of-year balance sheets is referred to as an __________________ financial statement.
9) Balance sheet accounts are often referred to as real or ____________________ accounts.
10) The cost flow assumption that will result in older costs remaining on the balance sheet. (acronym)
Friday, June 13, 2008
Adjusting Entries
Adjusting entries are made so that the financial statements reflect the accrual basis of accounting. (The accrual basis of accounting requires that revenues be reported on the income statement when they are earned, and expenses are reported on the income statement when they best match the revenues or expire. When the cash is received or paid is not relevant for reporting revenues and expenses.) Adjusting entries are often classified as accruals, deferrals, and other.
An accrual adjusting entry can involve revenues or expenses. A service company that has earned fees, but has not yet recorded the transaction, will accrue revenue. This is done by entering an accrual adjusting entry such as a debit to the asset Accounts Receivable and a credit to Service Revenues. An adjusting entry to accrue expense is needed when a company has received a service or goods from a vendor, but the expense and the liability are not yet recorded. Gas, electricity, water, telephone, wages, interest, and repairs are examples of expenses that will likely need an accrual adjusting entry. The accrual adjusting entry for these items will include a debit to an expense and a credit to a liability account.
A deferral type adjusting entry for revenues is necessary when a company has received money from a customer before it has been earned. The money received will be recorded in the Cash account at the time it is received, but the amount that has not yet been earned must be reported as a liability such as Unearned Fees, Unearned Revenues, or Customer Deposits. As the unearned amount is earned, an adjusting entry will debit the liability account and will credit a revenue account such as Service Revenues.
A deferral type adjusting entry for expenses is necessary if a payment overlaps accounting periods. For example, if a company prepays a six-month insurance premium and the company issues monthly financial statements, then a deferral adjusting entry will be necessary. The purpose of a deferral type adjusting entry for this situation is (1) to report Insurance Expense for the insurance cost that has expired during the accounting period, and (2) to report the amount of insurance cost that has not yet expired and will be reported on the balance sheet as the asset Prepaid Insurance.
Examples of other adjusting entries include depreciation and the allowance for doubtful accounts. The adjusting entry for depreciation is a debit to Depreciation Expense and a credit to Accumulated Depreciation. The adjusting entry for doubtful accounts will usually be a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts.
You might have noticed that each of the adjusting entries involved one balance sheet account and one income statement account.
Sample Adjusting Entries Questions
1) Customer deposits for future services will be listed under which financial statement category? (assets, liabilities, expenses, etc.)
2) The accounting principle that requires expenses to be reported on the income statement when they occur rather than when they are paid.
3) A prepaid expense is reported as which type of account? (asset, liability, expense, etc.)
4) Depreciation is the systematic ________________ of the cost of an asset (used in a business) to expense over the useful life of the asset. (It is not a valuation technique.)
5) The time _________ assumption is also known as the periodicity assumption. It means that an ongoing business can be divided into years, quarters, months, etc.
6) On December 1 a company purchased $700 of supplies—approximately a three-month supply. On December 1 the asset Supplies was debited for $700. On December 31 the company needs to prepare a prepayment-type ___________ entry.
7) Adjusting entries are used to convert accounting information from the cash basis of accounting to the ______________ basis of accounting.
8) The typical number of accounts involved in an adjusting entry.
9) An adjusting entry to recognize that part of a customer's prepayment has been earned will include a __________ to a liability account.
10) The accrued interest that the bank has earned but has not yet ______________ is reported as a debit balance in the account Interest Receivable.
An accrual adjusting entry can involve revenues or expenses. A service company that has earned fees, but has not yet recorded the transaction, will accrue revenue. This is done by entering an accrual adjusting entry such as a debit to the asset Accounts Receivable and a credit to Service Revenues. An adjusting entry to accrue expense is needed when a company has received a service or goods from a vendor, but the expense and the liability are not yet recorded. Gas, electricity, water, telephone, wages, interest, and repairs are examples of expenses that will likely need an accrual adjusting entry. The accrual adjusting entry for these items will include a debit to an expense and a credit to a liability account.
A deferral type adjusting entry for revenues is necessary when a company has received money from a customer before it has been earned. The money received will be recorded in the Cash account at the time it is received, but the amount that has not yet been earned must be reported as a liability such as Unearned Fees, Unearned Revenues, or Customer Deposits. As the unearned amount is earned, an adjusting entry will debit the liability account and will credit a revenue account such as Service Revenues.
A deferral type adjusting entry for expenses is necessary if a payment overlaps accounting periods. For example, if a company prepays a six-month insurance premium and the company issues monthly financial statements, then a deferral adjusting entry will be necessary. The purpose of a deferral type adjusting entry for this situation is (1) to report Insurance Expense for the insurance cost that has expired during the accounting period, and (2) to report the amount of insurance cost that has not yet expired and will be reported on the balance sheet as the asset Prepaid Insurance.
Examples of other adjusting entries include depreciation and the allowance for doubtful accounts. The adjusting entry for depreciation is a debit to Depreciation Expense and a credit to Accumulated Depreciation. The adjusting entry for doubtful accounts will usually be a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts.
You might have noticed that each of the adjusting entries involved one balance sheet account and one income statement account.
Sample Adjusting Entries Questions
1) Customer deposits for future services will be listed under which financial statement category? (assets, liabilities, expenses, etc.)
2) The accounting principle that requires expenses to be reported on the income statement when they occur rather than when they are paid.
3) A prepaid expense is reported as which type of account? (asset, liability, expense, etc.)
4) Depreciation is the systematic ________________ of the cost of an asset (used in a business) to expense over the useful life of the asset. (It is not a valuation technique.)
5) The time _________ assumption is also known as the periodicity assumption. It means that an ongoing business can be divided into years, quarters, months, etc.
6) On December 1 a company purchased $700 of supplies—approximately a three-month supply. On December 1 the asset Supplies was debited for $700. On December 31 the company needs to prepare a prepayment-type ___________ entry.
7) Adjusting entries are used to convert accounting information from the cash basis of accounting to the ______________ basis of accounting.
8) The typical number of accounts involved in an adjusting entry.
9) An adjusting entry to recognize that part of a customer's prepayment has been earned will include a __________ to a liability account.
10) The accrued interest that the bank has earned but has not yet ______________ is reported as a debit balance in the account Interest Receivable.
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