Financial Statements

This category covers all kinds of financial statements in the financial reporting. This includes income statement, balance sheet, statement of changes in equity and statement of cash flow as well as notes to financial statements.

Functional Currency

Most companies prepare their financial statements in their local currency. This currency is the same in which these companies transact. For example, a company that reports its financial statements in dollars may also conduct its operations in the same currency. For some companies, however, the same may not apply, as these currencies may differ. Some …

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Accounting for Collateral: With Example Under US GAAP – ASC860

What is Collateral? The term collateral represents an asset that one party offers as security in exchange for receiving a loan. The party offering collateral is the lender that owns the asset. The counterparty is the lender that accepts collateral. This collateral may come in as fixed assets, such as property, equipment, vehicles, etc. Some …

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How to Prepare a Statement of Retained Earnings?

Introduction Financial statements are documents produced by a business that show its different aspects. Businesses prepare financial statements after every accounting period for several reasons. For example, financial statements help the stakeholders of business make decisions regarding their relationship with it. Similarly, even the business itself can benefit from producing financial statements as it allows …

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How to Prepare a Statement of Stockholders’ Equity?

The statement of stockholders’ equity is also known by the following names; statement of shareholders’ equity, statement of equity, statement of changes in stockholders’ equity, statement of changes in shareholders’ equity, and statement of changes in equity. We usually use these key term interchangeably. Statement of stockholders’ equity is one of the five components of …

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What are liabilities in the statement of financial position?

[et_pb_section fb_built=”1″ _builder_version=”3.22″ custom_padding=”10px||13px|||”][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”9px||14px|||”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text _builder_version=”3.27.4″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”] Liability is one main element in the financial statements presented in the statement of financial position or balance sheet. Liabilities consist of current and non-current liabilities. Based on the conceptual framework, an essential characteristic of a liability is …

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Four fundamental assumptions in preparing financial statements

Introduction When we talk about financial statements, we normally refer to the four main types of the financial statements. Those are statement of financial position which we normally call Balance Sheet, Statement of comprehensive income or income statement, statement of changes in equity and finally statement of cash flow. Each statement serve for different purposes. …

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Types of Financial Statements

Introduction Basically, when we are talking about types of financial statements, we will firstly think about Income Statement, Balance Sheet, Statement of Changes in Equity as well as the Cash Flow Statements. Financial statements are basically arising from the the summary of business transactions as result of business activities during the course of day today …

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