Day: January 25, 2022

If there is sufficient information relating to cash payments and receipts, then a simple cashbook for both cash in hand and cash at bank can be prepared in confirmation of deposits and payments made from the bank statement. The information Read More …

There are 3 important ratios to be looked at: Gross profit margin Mark up Stock turnover If a firm has a uniform Gross Profit for all the items sold then any information available on sales or purchases can be used Read More …

Where the available records are so deficient (i.e. it is impossible to compile a reasonable complete cash summary, the only method of estimating the profits or loss for the period, is to prepare statement of affairs showing the net worth Read More …

INTRODUCTION An incomplete record situation is whereby, the accounting system falls short of the double entry. This may be due to: Lack of records at all; or Insufficient records that will facilitate the preparation of final accounts. Reasons for incomplete Read More …

Cash flow statements have many uses other than the legal need for some companies to prepare them. A few cases where a business might find them useful is answering such questions as below Small businessman may want to know why Read More …

Cash flow statement summaries the cashbook, by reconciling the opening and closing balance of the cash and cash equivalents. Cash equivalents refer to liquid assets which can easily be transferred into cash and include; Cash Demanded deposits in banks Short Read More …

Users of financial statements, require understanding how the business generated cash and how the cash was used. Unlike the income statement where profit reported is influenced by accounting policies and estimates, cash flow indicate the performance of the business enterprise Read More …

INTRODUCTIONS A business enterprise normally prepares the following two financial statements Profit or loss or income statement which helps to find out the profit or loss made as result of operations of the company over a specified period. Balance sheet Read More …

Because these organizations are not trading, the types of accounts to prepare are different from the ones of trading organizations. Note that 1. Instead of a cashbook, the clubs will maintain a receipts and payments which has similar entries to Read More …

INTRODUCTION These are some form of organizations that are set up to promote or to cater for the welfare of the members involved and not to make a profit. These include clubs, (e.g. football clubs, sports clubs), welfare associations and Read More …