Accounting Analysis
Accounting analysis refers to the accounting information provided by accounting, the application of certain analytical methods, the business process and its business results of quantitative and qualitative analysis. The result of accounting analysis is the main basis for accounting forecasting and accounting examination.
Note on Accounting policy (From the Emirates Airline Annual report):-
-Inventory Valuation: Inventory Valuation gives the company's inventory item a monetary value. The enterprise’s largest current assets is inventory, so it must be properly measured to ensure accurate financial statements.As the inventory items has been sold and restocks and the cost of the inventory items are changing ongoing , the
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Its value is it cost, need to be included in the cost of the product. Depreciation of fixed assets refers to the system of apportionment of accrued depreciation in accordance with the method of determining the useful life of fixed assets. Life is the estimated life of a fixed asset, or the quantity of the product or service provided by the fixed asset. Depreciation is only cost analysis, depreciation is not the valuation of assets, which itself is neither a source of funds, nor is the use of funds, therefore, depreciation of fixed assets does not bear the renewal of fixed assets. However, due to the depreciation method will affect the enterprise's income tax, which will also have some impact on cash flow. Depreciation of fixed assets is not all fixed assets are depreciated, depreciable fixed assets should have the conditions: the useful life is limited and can be reasonably estimated, that is fixed assets in the use of the process will be gradually lost until the use of value.According to the report from Emirates Airline,the land is not depreciated. And other items of property, plant and equipment is depreciated under straight-line
In order for Jim Turin & Sons, Inc to have used this method of accounting it would have had to match the cost of the merchandise with the revenue earned from the sale. Using the matching of revenue and cost the company would have had to have kept an actual inventory and maintained records of the costs associated with said inventory. Since the costs are not immediately deducted under the accrual method they are deferred to the year when the merchandise is
In Inventories are sold, and they are purchased on a continuous basis. Due to the varying market conditions, the prices of the inventories may change and as a result, valuation of inventory is imperative. There are various methods that organizations use in valuing stocks. The most common methods are:
Depreciation helps match the expense of using long lived assets with the revenues the assets helped to produce> what means is that Delta ns Singapore pole Air line depreciates one of its airplanes, it is trying to match the cost of air flight to the revenue that air craft helped to produce. Because air crafts can be an item used for more than one income statement period, Delta and Singapore Airlines don't recognize the air crafts entire cost as an expense immediately. Instead, the companies record them as assets on the balance sheet. Then, in each year of the assets useful life, the companies should recognize a portion of the Item's costs as an expense.
...ow valuation has been correctly calculated to show the projected future cash inflow will greater than the present value of the company asset.
Accounting is basically a service activity. Its purpose is to provide quantitative information that principally used by the managers, investors, tax authorities, and other decision makers to make the financial decisions within companies, organizations, and public agencies. Accounting is also widely known as the “language of business.” An accountant measures, communicates, and interprets financial activities. They prepare financial statements or reports for individuals, businesses, government agencies, or other non-profit organizations. They use the accounting systems to categorize the expenses and income to the typical groups. They also keep tract of the money received or paid out to see if the transactions are accurate and complete. Accountants are familiar with the computer operation. They use the computer...
ABC LTD COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2012 NOTE 2012 Revenue 2 828,500 Cost of sales 3 (460,000) Gross profit 368,500 Other income 4 2,500 Operating expenses 5 361000 Profit before income tax 10000 Income tax expense (30%) 3,000 Profit for the year 7000 Other comprehensive income change in revaulation surplus 38500 Other comprehensive income for the year, net of tax 38500 Total comprehensive income for the year 45500 ABC LTD STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2012 NOTES 2012 ASSETS Current assets Cash and cash equivalents 6 100500 Trade and other receivables 7 45,200 Inventories 8 87700 Other current assets 9 7000
Depreciation allocates the assets cost or depreciable amount over the estimated useful life of the asset to the entity. It is not a process of asset valuation. The cost of the asset less the accumulated depreciation is not intended to give the current market value of the asset as the asset purchased is not intended for re-sale but use in the business.
It is probable that the benefits that arise in the future is associated with the item that will flow to the firm and the cost of the component can be measured accurately and precisely. Otherwise the costs are considered to routine maintenance and are recognised in the income statement as and when they are incurred. The existing assets whether being replaced or upgraded should be reviewed regularly to make sure that they are either written off or their useful lives are revised or maintained at current values depending on the information. For example: cost of in-flight entertainment, cabin refurbishment,
2-1 D. Given: Current Ratio = 2.2:1; Current Asset = $33,000, Non-current Asset = $55,000; Liabilities = $15,000
Accounting is the pillar of every company to measure its growth, loss, revenue , capital, its really specify the real terms in foam of figures and sometimes in tables, in accounting there are certain rules are obtained to make more accuracy while playing with figures.
Two key disciplines in accounting are financial accounting and auditing. Financial accounting involves processes by which financial information about a business is recorded, classified, summarized, interpreted, and communicated (Wikipedia, 2005). Auditing is a related to financial accounting, but it is a separate discipline. "Auditing is the process...
The revenue/cost period-: Revenue and the cost period in accounting that the company get income from normal business activities. It’s referred to normal business income that the company got by selling their product and service.
Accounting in business, follows a particular process either in small scale business or large scale businesses with step by step process. Here is the straight forward procedure of accounting to know the organization current situation.
Financial Accounting Financial accounting or ‘book-keeping’ is the process of recording financial transactions from the day-to-day operation of a business. The sale of goods to a customer and the subsequent settlement of the debt are two examples of financial transactions. Sales Accounting When credit sales are made to customers, a record needs to be kept of amounts owing and paid. Payment is normally requested with an invoice.
Accounting is so important in our modern society. It serves a variety range of place in our society. It serves a variety range of place in our soceity, from school to hospital, from business firm to government agencies. It's also the main force in regulation of taxation and industrial activity. It serves a great aspects on the development of mass-production systems, any way, it's a very important term in our modern soceity.