Opens in a new windowOpens an external websiteOpens an external website in a new window
This website utilizes technologies such as cookies to enable essential site functionality, as well as for analytics, personalization, and targeted advertising purposes. To learn more, view the following link: Cookie Policy
The document discusses the classification of cash flows in a cash flow statement into three groups: operating activities, investing activities, and financing activities. Operating activities include cash flows from day-to-day business operations. Investing activities consist of cash flows related to purchasing and selling non-current assets. Financing activities capture cash flows that result from changes in a company's capital structure, such as through borrowing or lending. The document provides examples to illustrate how different cash flow items are classified within these three categories.
The manufacturing account shows a production cost of 9,300 consisting of direct material, direct labor, and overhead expenses. Trading account shows a cost of sales of 8,800, gross profit of 700, and sales of 9,500. The balance sheet lists assets of 6,000 including machinery and current assets, and capital of 6,000.
The document discusses the nature of auditing, including its objectives, principles, concepts, scope, and limitations. It defines auditing and distinguishes it from accounting and bookkeeping. Key topics covered include the independence and ethics of auditors, threats to their independence, and safeguards to address such threats.
Activity based costing & activity based managementPiyush Gaur
The document discusses activity based costing (ABC) and how it addresses limitations of traditional costing methods. It explains that ABC allocates overhead costs to products based on multiple cost drivers like direct labor hours, machine hours, and number of purchase orders rather than a single driver. This provides a more accurate reflection of how overhead resources are consumed. The document provides an example to illustrate how ABC can allocate overhead costs differently than traditional methods based on a single driver.
The cash flow statement summarizes the cash inflows and outflows for A Ltd. for the year ended March 31, 2012. It shows that cash from operating activities was Rs. 40,000, which was primarily from net profit adjusted for depreciation. Cash used in investing activities was Rs. Nil. Cash from financing activities was Rs. Nil as bank loan repayment was offset by dividend payment. Overall, cash and cash equivalents increased by Rs. 8,000 to Rs. 30,000.
This document provides an analysis of financial statements including the balance sheet, trial balance, and differences between them. It discusses how a balance sheet is organized according to order of permanence or liquidity with assets on one side and liabilities/capital on the other. The trial balance contains debit and credit balances of all accounts to test accuracy, while the balance sheet incorporates only asset and liability balances to ascertain financial position on a given date. It also outlines the differences between a profit and loss account, which shows revenues/expenses over time, and a balance sheet, which presents assets, liabilities and capital at a point in time.
Financial statement analysis involves interpreting a company's financial statements to assess its performance and financial position. It has several objectives, including evaluating profitability, operational efficiency, solvency, and reasons for changes in profits and financial position over time. Various parties are interested in financial statement analysis, such as owners, management, creditors, investors, and the government. Common tools used in analysis include trend analysis, common size analysis, and comparative statement analysis. However, financial statement analysis also has some limitations, as it relies on past data and is subject to changes in accounting methods, price levels, and different interpretations.