How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask USTaxAdvising Your Own Question

USTaxAdvising
USTaxAdvising, Accountant
Category: Finance
Satisfied Customers: 1080
Experience:  Professional with finance related questions.
Type Your Finance Question Here...
USTaxAdvising is online now
A new question is answered every 9 seconds

In preparing the four primary financial statements, in what

Resolved Question:

In preparing the four primary financial statements, in what order must the statement be prepared? Explain why, then explain how the income statement and the balance sheet interact.

What are the steps in completing the accounting cycle? How do the different steps affect the financial statements? What is the effect on the financial statements of missing a step when completing the accounting cycle?


Please explain Fiscal year vs. calendar year
Submitted: 2 years ago.
Category: Finance
Expert:  USTaxAdvising replied 2 years ago.

USTaxAdvising :

1. Balance Sheet

USTaxAdvising :

2. Income Statement or statement of operations

USTaxAdvising :

Statement of retained earnings or partners capital

USTaxAdvising :

4. Cash flow statement

USTaxAdvising :

then explain how the income statement and the balance sheet interact. - the net income from the income statement is reported as a credit on the balance sheet (if profitable) in the shareholders equity section of the balance sheet, generally as "netted" balance with retained earnings or partners capital.

USTaxAdvising :

What are the steps in completing the accounting cycle? - Steps to the accounting cycle are 1. record transactions as journal entries. 2. post to the ledgers 3. prepare the trial balance 4. prepare adjusting entries 5. prepare the adjusted trial balance 6. prepare the financial statements 7. make the closing entries 8. prepare the after-close trial balance.

USTaxAdvising :

How do the different steps affect the financial statements? - every step up to #5 is used to prepare the financial statements and provides the underlying data/transactions/numbers for the financial statements.

Customer:

Why are the financial statements prepared in that order (1-4)?

USTaxAdvising :

Oh sorry - I read what order they are presented.

USTaxAdvising :

my mistake - the order prepared is

USTaxAdvising :

1. income statement

USTaxAdvising :

2 Owners eqiuty

USTaxAdvising :

3. balance sheet

USTaxAdvising :

4 cash flows

USTaxAdvising :

sorry my mistake.

USTaxAdvising :

Something happened to our prior chat and I can no longer see my prior posts.

Customer:

I was asking why the financial are prepared in that order. I appreciate your response.

USTaxAdvising :

They are prepared in that order because the net income/loss number is XXXXX for the statement of owners equity.

USTaxAdvising :

The balance sheet needs the owers equity statement to be right and uses these figures

USTaxAdvising :

the cash flow is done last because everything else must be right prior to preparing this statement. It uses figures from both income statement and balance sheet.

USTaxAdvising :

Does that make sense?

Customer:

What about explaining fiscal year vs calendar year?

USTaxAdvising :

A fiscal year is everything that is not a calendar year. A calendar year starts on Jan 1 and ends Dec 31.

USTaxAdvising :

Some business prefer a different year end as it more appropriate for thier line of business.

USTaxAdvising :

Such as a Turkey farmer. He may want his year end to be Nov 30th so that he closes his year end after his busiest time of year, and it also matches up his expenses for the year to the period in which the revenues where earned.

USTaxAdvising :

Let's assume in the example above he starts raising meat birds Dec 1st. it takes him up to Sept to grow the bird for resale, then it is sold in Oct. This accounting period properly reflects the revenues and expenses to the cycle in which they were earned.

USTaxAdvising :

Does that help?

Customer:

Yes, that helps a lot. Thanks, XXXXX XXXXX accept this answer.

USTaxAdvising :

Glad I could help. Let me know if you ever have additional questions. You can also ask me directly here - http://www.justanswer.com/finance/expert-ustaxadvising/

USTaxAdvising, Accountant
Category: Finance
Satisfied Customers: 1080
Experience: Professional with finance related questions.
USTaxAdvising and 3 other Finance Specialists are ready to help you
Customer: replied 2 years ago.

I just realized you missed answering a part of my original question which was:

 

What is the effect on the financial statements of missing a step when completing the accounting cycle?

Expert:  USTaxAdvising replied 2 years ago.

What is the effect on the financial statements of missing a step when completing the accounting cycle? - if one misses a step in the accounting cycle such as making adjusting entries the financial statements (FS) could be materially misstated. Such adjustments may be for depreciation and if the company made a substantial fixed asset acquisition in the period a significant expense may not have been reported and this income would be overstated.

Customer: replied 2 years ago.

Are availalbe to complete a worksheet?

 

Customer: replied 2 years ago.

Are you availalbe to complete a worksheet today (03/17/12)?

 

Expert:  USTaxAdvising replied 2 years ago.
Sorry but I don't.
Customer: replied 2 years ago.
Can you complete an assignment by Saturday?
Expert:  USTaxAdvising replied 2 years ago.

Is there a way I could have a look at the assignment?

Customer: replied 2 years ago.

How can I attach the worksheet?

Expert:  USTaxAdvising replied 2 years ago.
I have no idea sorry.
Customer: replied 2 years ago.
Relist: Answer quality.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1890
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    1755
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    838
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    397
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    324
    NASD Licensed Rep, 1997-2001, Business Attorney