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Commerce part2. This one also stands tall among top finance and accounting interview questions asked in technical rounds by hiring managers. What are the three main Financial Statements? Again, follow the i.
Income Statement — It presents a summarized view of revenue, income, profit, and loss of a particular accounting period. Cash Flow Statement — It shows the movement of cash and cash equivalents for a business during an accounting period.
Capital is shown on the liability side of a balance sheet. What are Fictitious Assets? They are written off in multiple future accounting periods. Examples — Preliminary expenses, promotional expenses of a business, discount allowed on the issue of shares, the loss incurred on issue of debentures, etc. Fictitious assets are shown in the balance sheet on the asset side. When a business decides to give goods in charity it also needs to account for those goods in the appropriate financial statement s , in this case, downloads are reduced with the exact cost of goods donated.
Journal entry What is the Journal Entry for Free Samples? When a business wants to advertise a new product or a new line of product it may decide to distribute free samples to the customer.
The reduction in value of a tangible fixed asset due to normal usage, wear and tear, new technology or unfavourable market conditions is called Depreciation.