Financial statements

“ When a debtor files an application, it shall submit the statements on financial status, a checklist of debts, a checklist of the credit right, the relevant financial statements, a reserve plan for employee arrangement as well as the payment documents of wages and social insurance premiums. ”

“ None of the original members have left the company, save by death, and, it being a close corporation, they keep their financial statements, their books, their profits, and affairs to themselves; and the outer world, compelled to guess at things, puts a fabulous estimate upon the sum annually divided among the stockholders. ”

“ How far this process of condensation should be carried depends largely upon the use to which the balance sheet is to be put. A statement of financial condition to be issued to the public—stockholders and outsiders—can well omit data which would be required for internal use. Care must always be taken in condensed statements to avoid consolidation of detail in such a way as to render the statement misleading. ”

“ In our judgment, the Exchange, should, however, adopt methods to compel the filing of frequent statements of the financial condition of the companies whose securities are listed, including balance sheets, income and expense accounts, etc., and should notify the public that these are open to examination under proper rules and regulations. ”

“ The annual account is closed on the evening of the 31st of March, and there can be no reopening of the budget of a past year such as may occur under other financial systems. The second effect of the system is to introduce a certain artificiality into the financial statements. ”

“ Local circumstances alter the conditions materially in every place, and hitherto there has been a lack of uniformity in presenting financial statements which makes any attempt to produce a model budget to be suspect. ”

“ The auditor shall in his report state—
(a) whether the financial statements show fairly the financial transactions and the state of affairs of the Commission; (b) whether proper accounting and other records have been kept,including records of all assets of the Commission whether purchased, donated or otherwise; (c) whether the receipts, expenditure and investment of moneys and the acquisition and disposal of assets by the Commission during the financial year were in accordance with the provisions of this Act; and (d) such other matters arising from the audit as he considers necessary. ”

“ Arrangements which are to last even for half a century, to say nothing of permanent arrangements, cannot be based upon calculations resting upon data so fleeting and uncertain as the statements of revenue and expenditure of corporations which are going through such financial processes as these. ”

“ Board and at least once every quarter, of reports and recommendations regarding the
financial statements and records, the budgetary and accounting procedures, the risk
management and other controls within the CBI, the efficiency and cost effectiveness
at which the CBI operates, and any other matter within its competence and area of
responsibilities on which a report may be requested by the Board; and
e. any other assignment that may be given to the internal audit department by the
Board, provided that such assignments do not disrupt its principal task set forth
herein. ”

“ An enterprise shall, within 15 days after the end of each month or quarter, submit provisional enterprise income tax returns and make provisional tax payments to the tax authority.
The enterprise shall submit an annual enterprise income tax return to the tax authority and settle the amount of tax payable or refundable within 5 months after the end of each year. When an enterprise submits an enterprise income tax return, it shall enclose financial statements and other relevant information in accordance with the relevant regulations. ”

“ Kinds of Records.—A business must have assets and usually must incur liabilities; a plant must be used, stock-in-trade must be bought, and sold, and usually sufficient capital must be provided for the extension of credit to customers. Capital for the payment of the operating expenses of the business, the maintenance of the plant, the payment of salaries and wages of employees, and so forth must at all times be provided. While it is true that the balance sheet shows the financial condition of the business, it gives little information as to the volume of business operations. ”

“ The Estimate for Doubtful Accounts.—At the close of a fiscal period, when an accurate statement of the financial condition of the business is to be drawn up, all assets must be very carefully valued. The bookkeeping procedure necessary to show the correct value of fixed assets subject to depreciation has been explained. The outstanding claims against customers also require evaluation. Every business man knows from past experience that he will be unable to collect all of his outstanding accounts. ”

“ There is some difference of opinion as to whether the figure of net operating profit should be arrived at before considering any of the items of financial management, i.e., as to whether such items as interest income and expense, cash discount items, bad debts, etc., which are more or less common to every business, should be included before determining net operating profit or should be set up separately after its determination. ”

“ The treasurer’s financial statement for the year, 1896, is too full of trivial details to be satisfactory, but the tables which are published in the same number of the Gazette enable one to form a very clear idea of the financial state of the country. ”

“ Effort has been made to keep to a minimum the purely mechanical work of computation. While emphasis should be placed always on the principles involved, the need for accuracy should not be lost sight of; in its practice in business, accountancy requires accurate and, where possible, proven results.
Of the budget of stationery provided for this work, the loose-leaf supplies—statement, journal, and ledger paper—are for the first half-year’s work. The three-column paper is to be used for balance sheet and profit and loss statements, unless other directions are given for particular assignments. ”

“ If, however, the holding company is at the same time both an operating and a financing corporation, all the complexities encountered in the balance sheet of a manufacturing company will be found on that of the holding company. However, the financial statement of an operating holding company is not any more intelligible because of its complexity than that of a purely financing corporation. ”

“ A student of Indian Finance has two chief sources of information and guidance open to him. One is the Annual Budget Statement, and the other is the annual volume of Finance and Revenue Accounts. Though separately issued, the two are really companion volumes inasmuch as the Financial Statement forms, so to speak, an exhaustive explanatory memorandum of the annual financial transactions, the details of which are recorded in the volume of Finance and Revenue Accounts. ”

“ With the aid of personal and real accounts properly written up to date, it is possible at any time to prepare a statement of assets and liabilities showing the financial position of a business, and the following is an example of such a statement, which shows also how the profit made by the business may be thus ascertained, assuming that the financial position at the commencement of the current financial period, and the movements of capital into and out of the business during the period, are capable of being ascertained. ”

“ Previous legislative sanction for both expenditure and receipts in all their particular forms is absolutely necessary; so is thorough scrutiny of the actual application of the funds provided. Either by administrative survey or by judicial examination care is taken to see that there has been no improper diversion from the designed purposes. It is only when the varied systems of financial organization are studied in their general bearing, and with regard to what may be called their frame-work, that their essential resemblance is thoroughly realized. ”

“ The former mode involved an inquiry into the whole of the financial operations of the bank, its several liabilities, and its available resources; often a complicated and difficult undertaking, and, at best, of uncertain results. ”

“ The companies object that by the 'original cost' provisions of the order they are prevented 'from recording their actual investment in their accounts' with the result that the accounts do not fairly exhibit their financial situation to shareholders, investors, tax collectors and others. ”

“ In estimating the cost, the elements of price of materials, interest, expenses of manufacture and sale, and other necessary expenditures, if there by any, and bad debts, are to be taken into the account, and usually nothing else. The calculation is to be made as a manufacturer calculates the profits of his business. 'Profit' is the gain made upon any business or investment, when both the receipts and payments are taken into the account. ”

“ If a careful accounting is made of the profit or loss at the time of the sale of each piece of property and these profits and losses together with the dissolution expenses are summarized and distributed to the partners’ capital accounts, those accounts will of course show the claims of the various partners on the net assets of the business after all assets have been converted into cash and all liabilities paid. ”

“ In accounting it is often required to divide amounts in certain ratios, as when profits must be apportioned among partners, when insurance, taxes, and other expense charges must be distributed over departments, etc. ”

“ GETTING AT FINANCIAL STATUS While, with proper effort and organization, it is possible to ascertain in advance the financial worth of nearly every prospect in the manner already outlined, there are many instances in which this cannot be done through any of the ordinary channels. Some people conceal their occupation by writing under an assumed name on plain paper, so that an enquiry through a commercial agency will reveal nothing, except, perhaps, the statement “party unknown.” ”

“ Nearly every business with a well-developed accounting system can, at any time, without the formal periodic inventory or closing of its books usual at the end of a fiscal year, determine approximately the amount of its current earnings, the amount accrued since the beginning of its fiscal year, and the part thereof undistributed. ”

“ The matter is one first for a skilled master, who should make a full report upon the value of the property, the receipts and the expenses of operation, and the sums paid out on reconstruction and replacements, and in dividends in recent years. ”

“ It is stated by competent witnesses that a cash book, a journal, and a ledger are indispensable books of account for an efficient system of accounting, and that, in the smaller shops, even simpler entries showing merely the daily records of sales and record of purchases of merchandise would be sufficient. ”

“ To aid the assessor in fixing the value of such shares, the corporations shall furnish him a verified statement of all the matters provided in the preceding section, which shall also show, separately, the amount of capital stock, and the surplus and undivided earnings, and the assessor, from such statement and other information he can obtain, including any statement furnished to and information obtained by the auditor of state, which shall be furnished him on request, shall fix the value of such stock, taking into account the capital, surplus, and undivided earnings. ”

“ Before leaving the subject of net quick assets, it is well to note the importance of the figure showing the actual amount of current liabilities. If a company has outstanding large amounts of bills and notes payable, it occupies a vulnerable position. ”

“ With such information to point the way to economies in the future, instead of records that show us merely the amount of an expense already incurred, accounting takes its rightful place as one of the most important functions of a business enterprise. ”

“ It is therefore obvious, that, when you have ascertained the current cash value of the whole funded debt, and the current cash value of the entire number of shares, you have, by the action of those who above all others can best estimate it, ascertained the true value of the road, all its property, its capital stock, and its franchises ”

“ A corporation, joint-stock company or association, or insurance company, keeping accounts upon any basis other than that of actual receipts and disbursements, unless such other basis does not clearly reflect its income, may, subject to regulations made by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, make its return upon the basis upon which its accounts are kept, in which case the tax shall be computed upon its income as so returned. ”

“ By keeping the expense controlling account in the private ledger, the principal can keep private, not only the actual cost of an article, but the percentage of expense and the basis of the expense apportionment. If thought desirable, he can add further amounts for the purpose of establishing a selling price. ”

“ The Sales account is debited with the balances of the Returned, Sales and Sales Rebates and Allowances, thus showing a balance of net income from sales which is transferred to the credit of Profit and Loss. The Profit and Loss account then shows net income from sales on the credit side, and cost of goods sold on the debit side. ”