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Balance Sheet Questions
What is a balance sheet?
The financial statement of a company that lists its assets and liabilities is called a balance sheet. The shareholder’s equity at any given point in time is also listed on it. Balance sheets often cause some confusion, read below where Experts have answered these questions.
Is the net income that is reported on the balance sheet the same as the net income that is reported on an income statement of a company?
The net income that is reported on the balance sheet of a company should be the same as the net income reported on the income statement as it is normally derived from the income statement itself.
What can one do if the net income on the balance sheet is different from that of the income statement?
If the net income on the balance sheet is different from that of the income statement, the individual may have to check if the trial balance levels and ending balances are all correct. He/she may also have to check if the ending ledger balances are correctly reported on the profit and loss accounts and make sure that no entries are omitted.
Where should one report service revenue on the balance sheet?
The service revenue is not reported on the balance sheet. It is normally reported on the income statement under the revenues section. However, if the revenue is received before the service is performed, then it may be reported on the balance sheet as a current liability. In such a situation, the revenue may have to be earned within a year of reporting it. Such revenue may be called deferred service revenue.
Is it required for all the liabilities and assets to match on a balance sheet?
It is required for all the assets of a firm to match all its liabilities on a balance sheet. If there are any profits in the firm, then they will be reported under the retained earnings section of the sheet.
Can a balance sheet be used to calculate the rate of return on an investment?
A balance sheet may not be very helpful if an individual wants to calculate the
rate of return
on an investment. This is because the balance sheet will only list the company’s assets and liabilities. If an individual wants to calculate the rate of return, he/she may use the income statement.
What is the difference between an unclassified and classified balance sheet?
All of an individual’s assets, liabilities and equity are grouped together on an unclassified balance sheet. All the assets will be grouped under the asset grouping, the liabilities under the liabilities grouping and the equity accounts under the equity grouping. A classified balance sheet is where the assets and liabilities will be further broken into current and noncurrent groups. The equity will be divided into capital, additional paid in capital and retained earnings.
Can an individual report accounts like accounts payable and payroll liabilities to balance out everything that is mentioned on a monthly balance sheet?
An individual may report accounts like accounts payable and payroll liabilities to balance out everything that is mentioned on a monthly balance sheet.
What is the difference between a balance sheet and a profit and loss statement?
A balance sheet reports the company’s assets, liabilities and equity at any given point of time whereas the profit and loss statement will report the profit made by the company. This will include any revenue and expenses of the company over a period of time.
A balance sheet is very important to report a company’s financial assets and liabilities. It is also crucial for tax purposes. Hence you should be able to understand how a balance sheet is created and what needs to be reported in it. You can ask an Expert if you have any doubts about the creation of a balance sheet or any of its other aspects.
Recent Balance Sheet Questions
I purchased and LLC on June 1. the LLC had one member who
I purchased and LLC on June 1. the LLC had one member who owned 100%. I purchased all 100% from him at that time. Will the LLC file two returns this year?
PROBLEM 1. Describe the major differences between managerial
1. Describe the major differences between managerial accounting and financial accounting.
2. You have been working as a staff accountant at Sanborn Industries for three months. Mr. Jones, the accounting manager as well as your boss, has informed you that he has decided to change vendors for the company’s office supplies. He notifies you that your company will now be utilizing the store owned by his best friend. Mr. Jones is hopeful that this will bring in a significant profit for his friend’s business possibly preventing the closing of his store. You receive the first invoice from that store and realize that the prices are nearly double the amount that the company was paying when using a large retail chain.
What should you do about the situation?
3. Product costs consist of
a. period costs.
b. indirect materials, indirect labor, and administrative costs.
c. direct materials, direct labor, and selling costs.
d. direct materials, direct labor, and overhead.
4. Which of the following would not be included in overhead?
a. marketing costs
b. property taxes on the factory
c. factory utility costs
d. deprecation on factory machinery
5. Which of the following is an example of a period cost?
a. research and development
b. selling and marketing
c. general accounting
d. all of these
6. The cost of the partially completed goods at the end of the period would be
a. ending work in process inventory.
b. cost of goods sold.
c. beginning finished goods inventory.
d. beginning work in process inventory.
7. Product costs are expensed
a. when the product is finished.
b. when the product unit cost is calculated.
c. when the product is sold.
d. all of these are correct.
8. Cost of goods sold
a. represents all costs associated with research, development, and general administration of the organization.
b. is found on the Balance Sheet.
c. is the cost of the partially completed goods that are still on the factory floor at the end of the period.
d. is the total product cost for the units sold during a period.
9. Gross margin equals
a. cost of goods sold selling and administrative expenses.
b. direct materials + direct labor + manufacturing overhead.
c. sales revenue cost of goods sold.
d. cost of goods manufactured + selling and administrative expenses.
10. The average unit cost at a monthly volume of 9,000 units is $3, and the average unit cost at a monthly volume of 22,500 units is $2.10.
A. Develop a cost formula for total monthly costs.
B. What are the total monthly costs if 15,000 units are produced?
11. Ruskin Company had utilities cost of $95,000 at an output level of 30,000 units. The utilities cost was a mixed cost and the fixed portion was $50,000. What would the estimate of total utilities cost be at an output level of 40,000 units?
12. At the break-even point,
a. total revenue equals variable cost.
b. total fixed cost equals variable cost.
c. total contribution margin equals total fixed cost.
d. total sales equals total fixed cost.
e. total margin of safety equals variable cost.
13. If the contribution margin per unit decreases, the break-even point in units
a. will increase.
b. will decrease.
c. will remain the same.
d. cannot be determined from the information given.
14. The following information was extracted from the accounting records of MVP Corporation:
Selling price per unit $60
Variable cost per unit $20
Total fixed costs $480,000
A. What is MVP's break-even point in units?
B. How many units must be sold to earn operating income of $80,000?
C. What is MVP's break-even point in units if the selling price increases by 20% and the variable costs decrease by 20%?
I am doing a final return for a partnership. Does the balance
I am doing a final return for a partnership. Does the balance sheet need to be zero for assets and liability? everything has either been sold or given away. There was a loan balance and the partners equally distributed the balance each paying off the loan. Do the partners get a loss on personal income tax for this? There is also depreciation which has 6000 left for depreciation, and there is goodwill which has 17,000 left for depreciation these are both listed on the balance sheet .
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