how many children can be given birth by a woman

A woman can give birth to maximum 35 babies in the her life.

Which player hit the maximum sixes in the test cricket

Test cricket is not knows for big hitting even then Adam Gil Christ has hit 100 sixes in this type of cricket.

One Click One Dollar

One click one Dollar

Yes you can earn up to one dollar per click by blogging. Blogging is writing articles on different issues. There are millions of people earning money from the blogging. The all you need to write on interesting articles and unique content and your earning starts in few weeks.

Step 1 Open G-mail account

Open a G-mail account. G-mail account is free of cost and can be open by visiting the G-mail official site. G-mail is email server of Google.

Step 2 Open Blogger Account

Go to blogger dot com and open an account. This is also free of cost service run by the Google. There is also other free blogging sites service but the most famous and user friendly are Blogger and word press.

Step 3 Write Articles

Write Interesting blogs (an interesting article on any issue). Your blog must be comply with the rules and regulation and you content must be original (you cannot copy the content)

Step 4 Get Code from Ad Sense

Get a code from ad sense or other advertiser. Ad sense is also Google service and you need to apply for the Ad sense code. Your blogger account must be rich enough to get approved from ad sense. The other publisher like info links has soft policy and you can easily get approved.

Step 5 Place your Code

Place that code in your blogger account.  You need to place the code with the help of Gadget option in which is available in layout of your blog. Blogger will guide you how to integrate your code in the blogger account.

Step 6 Promote your Blog

Different add will automatically appear on your articles. Advertisement is normally consistent with the content of your blogs.

Step 7 Get Paid

If some visitor of your blog click on those adds you can earn up to one dollar. The payment is made to you by the publisher ( Ad sense or info links) . The payment is made to you after you reach certain threshold limit (minimum payable amount). Threshold are different for differ publisher but the maximum is $ 100 for any publisher.

What are types of income?

What are types of income?

The income can be broadly classified into two types i.e. Revenue and Gains.

1. Revenue: income which arises from the normal business activities is knows as revenue. Revenue is expected when the business is in operation. Different example of revenue is sales, fee income, interest income etc.

2. Gain: Gain is an income which does not come from the regular business operation and therefore may or may not arise during the period. Famous example of gain is gain on sale of fixed assets, gain due to the fluctuation of exchange rate.

What are expenses?

What are expenses?

In normal business account amount incurred o carry out business operations is expenses. Examples are salary, rent etc.In technical term expenses is decrease the equity of the organization and such decrease may be due to outflow of resources, depreciation of resource or increase in liability.

Example of outflow of resource as expense

A salary of $ 200 is paid

This is expenses because it involve the outflow of cash (asst) the will decrease the equity by $ 200

Example of Depreciation as expenses

A building is depreciated @ 10 and cost of building is 100,000

This is an expense because the asset is depleting and equity will b reduced

Journal Entry for recognition of expenditure

		Dr.	Cr.
	Depreciation	10,000
	Fixed Asset		10,000

Statement of Financial Position (Balance Sheet)

	Equity	Assets
Opening	100,000	100,000
Depreciation/loss	(10,000)	(10,000)
closing

What is income?

What is income?

Income is the benefit to the organization that would ultimately result in increase of equity. The benefit may be in the form of asset increase of decrease of liabilities. Income does not include the contribution of equity holder.

What is equity?

What is equity?

Equity is the residual interest of the equity holder in the asset of the organization after deducting all liabilities. The residual interest may be known as net assets. The equity may be classified into different segments i.e. reserves, retained earnings and paid up capital for decision making need of user. 

How equity is calculated

Equity is calculated by deducting all liabilities (i.e. long term and short term) from the total assets.

Example of equity

Paid up capital	1,000,000
Retained Earning	500,000
Share premium account	400,000
Equity	1,900,000

Types of Obligations

Types of Obligations

There are mainly two types of liabilities.

Legal enforceable liability: when organization enters into agreement, then it constitutes a present obligation for the organization and it is treated as liability.

Constructive obligation: This type of obligation arises from business practice or policies of the organization.

How liabilities can be settled

1. Payment: liability can be settled by payment of cash

2. Transfer of asset: Liability can be settled by transfer of an asset

3. Service provision: Liability can be settled with replacing another liability

4. Conversion: liability can be converted into account.

what is liablity

What is liability?

Liability is a present obligation that is resulted from the past event which settlement require outflow of resources.

What is Present Obligation?

Present obligation is obligation that entity is currently liable to pay. For example Mr. A purchase of USD $ 200 in past is current liability of the entity and therefore it is present obligation.

What is Past Event?

A past event is an event which has already occurred.  A future event does not give rise to a Liability. For example an organization planning to take a long in next month does not come under the definition of liability.

What is outflow of resource?

Liability settlement must require outflow of resources. For example a customer has a warranty claim but organization believes that organization will win the case and therefore there is no liability arises because there is not expected outflow of resources.

What are assets?

What are assets?

Asset is a economic resource that is under the control of entity and resulted from an past event and it generates economic benefit for the organization.

Characteristic of Asset

1. Control: The resource must be under the control of organization. Control mean that entity has control over the benefit of the assets. For example machinery is purchased but shall be used by seller for two months is not as asset of the organization.

2.  Past event: Asset must result from the past event. It means that future resource control cannot be treated as asset. For example an entity planning to purchase an asset in next month’s cannot be treated as assets presently.

3. Generate Economic benefit: An asset must be able to generate economic benefit for the organization. For example machinery purchased by the entity but later on found that those assets cannot be sold within country and there is no return provision is available. Purchase stock will not be treated as asset because future economic benefit will not flow from the assets.

4. Legal title not required: Asset definition does not require legal title and a resource can be treated as asset even without legal title, assets under finance lease is the most common example in this regard.

5. Physical form not required: An asset does not require physical existence and there are number of assets that does have physical existence known as intangible assets. The most common example of intangible asset is Goodwill.

How many ways asset can produce benefit for organization?

1.       Production: Asset can be utilized in the production process of goods i.e. stock

2.       Exchange : Asset can be exchanged with other assets

3.       Settle Liability : Asset can be used to settle a liability

How Comparability is achieved

How Comparability is achieved

Financial statement information must be comparable with the previous period and financial statement of other entities of at least same industries. Application of International accounting standard ensures the comparability of the different financial statements.

Comparability can be achieved through consistent presentation and entity does not change its presentation unless and until required by international accounting standards or management is of the view that a change in presentation will achieve more appropriate and relevant representation.

Why Comparison is important

The comparison is important for the following reasons.

1.  Performance Evaluation: Comparison facilitates the performance evaluation over the period of time. It has special significance where the ownership and management are two different functions i.e. listed companies.

2. Determine a Trend: Comparison is also required to establish a trend which is very effective decision making tool for the future investments.

What is prudence concept?

What is prudence concept?

The prudence concept is very much relevant in the situation when management needs to take a decision in the situation of uncertainty. Uncertainty require an estimates and management must follow the following rules when making such estimates

1.      Assets are not overstated

2.      Income are not overstated

3.      Liabilities are not understated

4.      Expenses are not understated

Head	Decision/Care
Assets and income	Not overstated
Liabilities and Expenses	Not understated

What is Relevant information

What is relevant information

Relevance is the information which is fundamental to decision making.

How relevance is determined

Relevance is one of the important qualitative aspects of financial statements that require that information relevant to economic decision should be disclosed in the financial statements. Materiality is a very important factor of determining the relevance of information.

What is materiality?

Information is said to be material if its non disclosure can influence the decision making of the user. Information may be material for one user and may not be material for other because different user has to make different decisions.

How we determine the materiality

Materiality is determined by two factor i.e. size and nature. It is important to note that amount can be material due to its size, nature or both.

Does financial statement disclose all relevant information?

It is technically not possible to disclose and describe all relevant information in the financial statement. However, financial statement must disclose all information that can influence the decision making of the user i.e. material information.

How understandability is achieved in Financial Statements

How understandability is achieved in Financial Statements

Financial statement should allow the easy understanding of the information presented in financial statement and there should be no difficult faced by the user for understanding the financial statement. The understandability can be achieved through the following.

1. Easy Language: financial statement must use the easy language in the financial statement. Easy language is a relative terms but management should keep in mind that a person with reasonable knowledge of accounting and economic should be able to understand the financial statement.

2. Disclosures & Explanation: financial statement must provide relevant disclosure and explanation for complex nature of information. These disclosure may be financial and non financial (descriptive).

3. Narration of Policies: a comprehensive narration of different accounting policies is a very important factor for understanding the financial statements; therefore management should describe the applicable policies in details.

4. Application of International accounting Standard: application of international accounting standards in the preparation of financial statements is also a very effective tool to improve understanding level of financial statements.

How a lay man can understand the financial statement

For understanding of financial statement user must have a reasonable knowledge of economic, business and accounting. This knowledge can be obtained by having a relevant degree, reading the business page, reading the technical articles of business magazine, sharing the ideas with an expert, attending short courses and examining the different financial statement in details.

What is faithful representation?

What is faithful Representation?

The faith full representation means that management does present all relevant information in the financial statements, faithful representation is basically a further explanation of reliable information . The faith full representation require the following things

1. Presentation of all required information: all information which is required to be represented is presented in the financial statements. it means all information relevant for the economic decision making are presented.

2. Presentation of all Expected information: All information which is expected to be presented is included in the financial statements.

Is an absolute faithful representation possible?

No, absolute faithful representation is not possible because there are number of inherent limitation involves in the preparation of financial statements. For example management has to make many estimates during the preparation of financial statement and it is not possible to accurately calculate the estimates and uncertainty.

How many qualitative characteristic of financial statements

How many qualitative characteristic of financial statements

There are four main qualitative aspect of financial statement that makes financial statement more useful for the user of financial statements. Theses qualitative aspects are relevance, understand ability, reliability and comparability.

What is relevant information for financial statements?

Financial statement should provide relevant information for economic information.  Relevant information helps in evaluating the present performance and financial position, it also facilitate the user for predicating the future.

Materiality is important factor in determine the relevance, a material item is normally is relevant for decision making. Nature also plays an important role for determining the relevance of information.

What is Understandability in Financial Statement

Financial statement should be easily understandable by the user. It means that financial statement does not use such words and format which are difficult to understand. The international accounting standards have defined many disclosures requirement to improve user understanding.

What is reliable information?

Information that can be trusted i.e. free from error is known as reliable information. Financial statement provides bases for much economic decision therefore it very crucial that financial statement should be reliable. Reliability is such an important aspect that independent audit is conducted to ensure the information presented by the management is reliable.

What is comparable information?

User must be able to compare the financial statement with previous year financial statement to determine the performance. The financial statement must also be comparable with other entity. Financial statement must be prepared with consistency to ensure comparability.

Does financial statement provided all information for decision making

Does financial statement provided all information for decision making

No, financial statement does not provide all information which is necessary for the economic decision making ,however, financial statement provides some basic information for economic decision making.

Financial statements basically focus on the financial information and provide little information about non financial aspect of the organization, similarly financial statement report the transaction of past and does not describe the future of the organization. These information may be very much relevant for the economic decision making.

Financial statement mainly focuses on financial performance and financial position of the organization and its ability to generate the cash flows.

Can lay man understand financial statement?

It is normally assumed that some basic knowledge of business, economics and accounting is required to understand the financial statements. How much knowledge is required to understand the financial statement is a relative question.

Financial statement does not involve complex calculation or formula to understand and only a reasonable knowledge of the business and accounting maybe sufficient to understand the financial statements.

What kind of information is provided by Financial Statements?

What kind of information is provided by Financial Statements?

1. Historical Information: Financial statements presentation of historical data and does not deal with the future of the entity.

2. Financial Information: financial statement mainly provides the financial information and only limited non financial information is disclosed in the financial statements.

Can Historical information be used for Decision Making?

Yes historical information provides some bases for future decision. For example with the help of the historical information you can determine different trends and on the bases of that trend you can predict the values. This technique is known as forecasting.

Why Financial Statements are prepared

Why Financial Statements are prepared

The financial statement mainly prepared for providing the information related to financial position and financial performance of the organization. This information is helpful in making informed decision making by the user of financial statements. There are many users of financial statements and each user information requirement may differ from other.

Financial statement also provides useful information about the utilization of resources by the management and performance of management may also be explained with the financial results.

Who is the different user of Financial Statements?

The user of financial statement can be classified into investor, creditor, banker, supplier, tax department, Regulator, statistic department etc.

What information needs of investors?

Investors make investment for better return therefore investor is interested in the profitability of the organization. Investor is also want to play safe therefore investor is also interested in the stability of the organization.

What are information needs of employees?

Employees are interested in good remuneration and bonuses and therefore mainly interested in the profitability of the organization. Employee also wants job security and therefore may be interested in financial position.

What are information needs of lender?

Lender wants to safely receive its loan and therefore interested in the liquidity of the organization. Liquidity information may be seen in the cash flow statement the current asset ratio also provides useful information about the liquidity of the organization.

What are information needs of Government?

Government is interested in the profitability of the organization to collect tax .many organization need different information to compile the national Data.

Why General public information needs

General public is interested in financial statement to establish its role in the local community. Industry creates job opportunity for local community and also announces some welfare project for the betterment of local community.