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...?The business community has more accumulated wealth that the governments of the over 200 countries in the world combined. There are thousands of publicly traded companies been traded on Wall Street and international markets such as the London Stock Exchange every day. Due to the importance of these capital markets there is a need for professionals dedicated to financial reporting. Publicly traded companies have to prepare financial statements every accounting period. The normal accounting period is one year, but most companies also release quarterly financial statements. The four major financial statements are the income statement, balance sheet,...
3 Pages(750 words)Essay
.../Annual_Report_English_2010.pdf Apple Inc and Philips follow the Generally Accepted Accounting Principles convention (GAAP) under their respective countries. Apple Inc prepares its financial statements on a basis that is consistent with the US GAAP whereas Philips prepares its financial statements on a basis consistent with the ‘Dutch GAAP’ (Nikolai, Bazley and Jones, 2009). The two companies measure their financial performance on the basis of the historical cost unless they have indicated to have used another costing method. APPLE INC. 2010 2009 Revenue 65,225.0 42,905.0 Gross Profit 25,684.0 17,222.0 Operating Income 18,385.0 11,740.0 Net Income 14,013.0 8,235.0...
3 Pages(750 words)Case Study
...? ACCT CASE 3: Income ment October 14, Part I. Why is revenue recognition a significant issue? The revenue recognition is a significant issue. Noncompliance with the revenue recognition will create undue disadvantage to the fraudulent person or company. The violation of the revenue recognition principle constitutes misunderstanding among the different users of the financial statements. The violation will create distrust among the affected parties. When mistrust crops up, many of the financial statement users will divest their investments in the company or avoid dealing with the fraudulent company. The principle ensures that revenues are recorded in the accounting period that they are earned. To be earned, the products must be sold... ...
6 Pages(1500 words)Essay
...Scenario Ted has been trading for a number of years, buying and selling fruit and vegetables from a shop in Highgate. Ted is keen to expand the business by making and serving freshly squeezed juices and smoothies. This would mean rearranging the shop to include a counter, equipment, sinks and seating and taking on extra staff.
The Income Statement for the fruit and vegetable business for the year ended 5 April 2009 is shown below:
'
'
Sales of fruit and vegetables
85 000
Less cost of goods sold
(35 000)
Gross profit
50 000
Rental income received (Note 1)
7 800
Bank interest (Note 2)
1 600
Profit on sale of equipment (Note 3)
100
9500
59 500
Less expenses:
Wages and...
4 Pages(1000 words)Case Study
...Expense: The expense incurred by a company in manufacturing a product is a product expense. These include direct materials, direct labour and factory overheads. These expenses become the part of the total cost of the product being produced.
Period Expense: The expense incurred by a company during a financial period is a period expense. These expenses are shown in the Income statement in the period in which these are incurred. Examples of such costs are administrative costs, distribution costs, selling costs, rent of head office etc.
MATCHING CONCEPT:
The matching principle states that the costs incurred for earning revenue should be reported in the same accounting period in which the revenue has been...
4 Pages(1000 words)Coursework
...Income ment Cost of goods sold Finished goods inventory, beginning $ 120,000.00 Add: cost of goods manufactured $ 200,000.00Cost of goods available for sale
$ 320,000.00
Less: finished goods inventory, ending
$ 60,000.00
Cost of goods sold
$ 260,000.00
Sales
$ 680,000.00
Less: cost of goods sold
$ 260,000.00
Gross profit
$ 420,000.00
Administrative expenses
$ 70,000.00
Selling expenses
$ 40,000.00
Earnings before tax
$ 310,000.00
Tax expenses
$ 93,000.00
Net income
$ 217,000.00
Income statement of the organization presents the profitability of the organization and it explains the revenues that the company has generated... and the...
1 Pages(250 words)Essay
...1. An income ment is also known as a profit and loss ment and it is usually drawn over a certain accounting period (Investopedia, . This statement usually outlines a summary of how a business incurs its expenses as well as generating its revenue through detailing both operating and non operating activities. Essentially, the main idea behind any business is to generate profits and an income statement is very useful in as far as determining the profitability of the business is concerned. Thus, an income statement reveals the status of business at a particular period.
Since the main purpose of business is to generate profits from its operations, the income statement is very important since it helps to show if the organization... is in a...
4 Pages(1000 words)Essay
...Income ment - Ford Motor Company Income ment - Ford Motor Company In order to measure a company’s performance financially, analysts use the income statement. It includes details about the revenues generated by the business as well as the list of all expenses incurred during a specified time.
Purpose of an Income StatementIncome statements are usually released at the end of the year. They help in analyzing how much successful the company has been in achieving its goals and objectives. The profit and loss is calculated for each operating and non-operating activity of the company. This helps in estimating...
2 Pages(500 words)Assignment
..., 2012).
The concepts that various companies have used for the income measurements are the all-inclusive approach and the concept of current operating performance. The approach called all-inclusive approach works in such a way that all items that are incomes move in the income statement before there is a closure to retained earnings. The all-inclusive approach includes all items that are recognized during the period in the income. This is regardless of whether they are considered to be results of operations of the period (Porter & Norton, 2012).
However, there are exceptions that were made to the concept. The exceptions required that certain changes in...
4 Pages(1000 words)Assignment
...Income ment And Balance Sheet Both the income ment as well as the balance sheet provides answers to two questions together. These financial statement provides insight regarding how well did an organization perform in a particular period or accounting cycle and the assets as well as the liabilities that a particular company owes or has ownership off. Both the financial statement has various elements in common that are exhibited through different headings. The answer to the question that how well a company has performed during a particular accounting cycle is exhibited under the heading of an organization’s net income within the income...
1 Pages(250 words)Article
