Question

The 4 Financial Statements are prepared by senior accountants in an organization. Fully describe one situation where front line managers will be required to provide input into the formulation of the Income Statement.

Answer 1

4 Financial Statement are - Balance Sheet,Income Statement,Cash Flow Statements and Statement of Shareholders Equity.

Inputs in Formulation of the Income Statement which Front Line Managers will be required to provide to Senior Accountant are as Follows

1- Sales

2-Cost of good Sold

3-Opearting Expense( Selling Expense,Admin Expense, Marketing Expense and E.t.c)

4-Non Operating Items which will include Non Operating Expense and Non Operating Income(Rent Revenue,Interest Expense.Gain/Loss on sale of Investment/Asset)

5-Tax Expense

These all Items can be find in Adjusted Trail Balance which Front Line Managers has to Provide.