Budgeting
- Submitted by: butterflyfling
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- Date Submitted: 01/29/2013 01:16 AM
- Pages: 4
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Assessment 1
Question 1
1. External user, as they are the lenders of money and have a financial interest of the enterprise in able to make decisions about the reporting of the company. They have to analyse the accounting information of the company to check if they are able to repay the amount borrowed before approving the loans. They have to ensure on whether or not the company meets the regulations that apply.
2. Balance sheet would be the best financial information for the banker as it composed the value of the company comprising of assets, liabilities and equity. Assets reflect things of value that a company owns and has in its possession prior to the business. Liabilities are things of value that a company owes to others which are due to be repaid in a year or more depending on the credit terms given. And equity are retained earnings and contributions of the owner and shareholders to the business. With all these taken into account, a banker can analyse the financial stability of a company.
Question 1 Part 2.
Monte Hall Gaming has already purchased the land in cash, therefore he already owned the land. In accounting practice, owning a land is part of your asset and it have future economic value that can be measured and expressed in dollars. It is classify as tangible asset with an anticipated useful life of more than a year. Liabilities is only recorded when a company is liable for a debt and they are responsible for paying the debt. Thus, purchasing the land in cash does not reflect any owing amount in the financial statement.
Question 1 Part 3.
Wilson Mowing |
Trading, Profit & Loss Statement |
For the period ended 31st December 2011 |
| | | | | | | $ |
Service Revenue | | | | | | 31,900 |
Less: | Operating Expense | | | | | |
| Salary | | | | | | (4500) |
| Repairs | | | | | | (800) |
| Supplies | | | | | | (1600) |
| Gasoline | | | | | | (3800) |
| Net Income | | | | | |...
Question 1
1. External user, as they are the lenders of money and have a financial interest of the enterprise in able to make decisions about the reporting of the company. They have to analyse the accounting information of the company to check if they are able to repay the amount borrowed before approving the loans. They have to ensure on whether or not the company meets the regulations that apply.
2. Balance sheet would be the best financial information for the banker as it composed the value of the company comprising of assets, liabilities and equity. Assets reflect things of value that a company owns and has in its possession prior to the business. Liabilities are things of value that a company owes to others which are due to be repaid in a year or more depending on the credit terms given. And equity are retained earnings and contributions of the owner and shareholders to the business. With all these taken into account, a banker can analyse the financial stability of a company.
Question 1 Part 2.
Monte Hall Gaming has already purchased the land in cash, therefore he already owned the land. In accounting practice, owning a land is part of your asset and it have future economic value that can be measured and expressed in dollars. It is classify as tangible asset with an anticipated useful life of more than a year. Liabilities is only recorded when a company is liable for a debt and they are responsible for paying the debt. Thus, purchasing the land in cash does not reflect any owing amount in the financial statement.
Question 1 Part 3.
Wilson Mowing |
Trading, Profit & Loss Statement |
For the period ended 31st December 2011 |
| | | | | | | $ |
Service Revenue | | | | | | 31,900 |
Less: | Operating Expense | | | | | |
| Salary | | | | | | (4500) |
| Repairs | | | | | | (800) |
| Supplies | | | | | | (1600) |
| Gasoline | | | | | | (3800) |
| Net Income | | | | | |...