BUSINESS ADMINISTRATION
PRINCIPLES AND PRACTICE OF MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Detailed explanation-1: -The taxes payable, wages payable, and other deductions (that the employer has collected from the employee) appear on the balance sheet as current liabilities. Current liabilities that relate to payroll are shown with actual numbers on the balance sheet.
Detailed explanation-2: -The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company’s financial strength and provide a quick picture of a company’s financial health and underlying value.
Detailed explanation-3: -Payroll affects every aspect of the accounting equation. In the most straightforward sense, money spent on payroll is money that offsets revenue and leads to lower net profit, fewer assets and increased liabilities.
Detailed explanation-4: -An income statement reports a business’s revenues, expenses, and overall profit or loss for a specific time period. It’s one of the 3 major financial statements that small businesses prepare to report on their financial performance, along with the balance sheet and the cash flow statement.