Financial Reporting

[Stan Ejims]

Please I need more clarifications in the following :
1. Is there any differences between gain and profit in accounting ?
2. Why is cash regarded as an asset?

 

[smallbushelp]

Yes. In accounting, profit is the financial benefit derived from operating a business. In other words, the money that you have left over after you subtract all of your expenses. Gain is most often associated with the sale of assets. You would have a gain if you sold a piece of equipment for more than its book value.

Cash is an asset because it is something that has value to the holder of it. It is an economic resource. Whereas a liability, such as a loan for example, represents an obligation to use up an economic resource, like cash.

 

[Stan Ejims]

Yes. In accounting, profit is the financial benefit derived from operating a business. In other words, the money that you have left over after you subtract all of your expenses. Gain is most often associated with the sale of assets. You would have a gain if you sold a piece of equipment for more than its book value.

Cash is an asset because it is something that has value to the holder of it. It is an economic resource. Whereas a liability, such as a loan for example, represents an obligation to use up an economic resource, like cash.

 

[Stan Ejims]

Thanks so much @Smallbushelp,your help on d first question is really resourceful but I need further clarification on the second one
I came across a study that describes cash as an asset because of "it's command over other resources".Please can you explain in that context
Thanks

 

[smallbushelp]

Not really. I'm just a humble accountant. But perhaps what that means is that "cash is king" (a saying here in the U.S.). In other words, cash (an economic resource) can be used to acquire most all other resources (like manpower and equipment) but those items cannot necessarily be used to acquire the same or different resources.

 

[Stan Ejims]

Wow
Believe me sir ,I don't mean to flatter you but your answer is so on track.Thanks so much for sharing your humble opinion with me .Am grateful

 

[Alexandra.Dumitriu]

Hello,
Can anyone help me with an example of a trial balance for HMRC ?

 

[Alexandra.Dumitriu]

I have a balance sheet and a profit and loss account and a week ago i completed the CT 600 software from a site of HMRC but i understand that it is mandatory to complete also a trial balance...and here i have dificulties(

 

[smallbushelp]

Here in the U.S., a trial balance is an accounting report that lists the ending balances in each of an organization's general ledger accounts; debit balances in one column and credit balances in another. The total of the debit column should be the same as the total of the credit column. You can see an example of a trial balance here:
http://www.myaccountingcourse.com/accounting-cycle/adjusted-trial-balance