How to adjustment your brain for books?
What is a relatively complex chapter in the ninth-tenth book of accounting? "Eighty-seven percent of the respondents answered" financial statements ". The rest of the 20 have said "there is no word really difficult" and some say "the whole bite sounds like poison", Apu.
Today we will target those people whose financial statements have become a complex chapter. So what I understood when talking to them was that Zabeda, Khatiyan, Raywamil, etc. have been straightforward to practice, but there are many interesting things in financial statements that are difficult to remember. And the most difficult to understand is in the adjustments.
Adjustment! How would it be if someone found it so funny! The thought came in how to present the adjustments a bit straightforward.
The final calculation refers to the purchase and sale of profits and the balance sheet and the surplus. It is also called the financial statement.
Financial statements have to be prepared differently for each type of organization. That is, the financial statements of one-way businesses and joint-capital businesses have to be prepared in different terms. Today, we will know about some of the most common adjustments in the financial statements prepared by a single business that will be used to solve almost every issue.
According to International Accounting Standard-01, there are five steps to prepare the final calculation. The steps are
1. Statement of Comprehensive Income
2. Proprietary Entity Statement (Statement of Changes in Equity)
3.Statement of Financial Position
4. Statement of Cash Flows
5. Required notes and important accounting principles used in the statement of financial statements (including a summary of significant accounting policies and other explanatory information)
This time, let's get an idea of the final accounting preparation steps.
1.Detailed income statement:
Net profit is calculated by detailed income statement. It records profitable income and profitable expenses. In the case of the service provider, net profit is only deducted from the total cost of service income. On the other hand, we know that product sales are the main source of income for the company selling the product. In this case, the net profit method is that the gross profit will be obtained by excluding the cost of the goods sold from the sale money. The operating profit will be deducted from the gross profit. Then the net profit will be deducted if you deduct the expenditure from the profit received by adding other income to the management profit.
2. Ownership Statement:
Additional capital should be added to the starting surplus. Then adjust the net profit / loss received from the financial statements. If the net profit is to be added and the loss should be excluded. Any lifting from it should be avoided. The latest general reserves can be found by quoting the ownership title.
3.Financial Condition Statement:
The financial statement is therefore prepared on the last day of accounting period to know the financial condition of the business. The details of the financial system are known as fixed assets, current assets, fixed liabilities, current liabilities and the amount of capital of the owner. By combining asset transactions together and then adding liabilities together, it can be seen that the quotes from the two sides are equal.
Total adjustment of final calculation:
The final calculations were prepared from the Revamil's calculations. Occasionally some non-Revival information is included in the financial statement. And this process is called coordination. Today we will look at all the adjustments in the final calculation that will make it easier for you to prepare final calculations like water!