Accountancy

Cost of goods available for sale – closing inventory = Cost of goods sold.

Income statement shows the profitability of a business. The income statement is the most important report for many analysts. It shows the company’s operating results for an entire year.

Under diminishing balance method, depreciation decreases every year. Since the book value reduces every year, hence the amount of depreciation also reduces every year. Under this method, the value of the asset never reduces to zero.

The allocation of owner’s private expenses to his/her business violates Separate business entity concept. The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses.

Liquid or Quick assets = Current assets – (Stock + Work in progress).

Assets – Liabilities = Capital is correct. The Accounting Equation states that the Assets are always equal to the sum of Capital & Liabilities.