Statement of Financial Position Format

question 25

Essay

Statement of financial position format
The following statement of financial position has been submitted to you by an inexperienced bookkeeper. List your suggestions for improvements in the format of the statement of financial position. Consider both terminology deficiencies as well as classification inaccuracies.

Note 1. The reserve for contingencies has been created by charges to earned surplus and has been established to provide a cushion for future uncertainties.

Note 2. The inventory account includes only items physically present at the main plant and warehouse. Items located at the company's branch sales office, amounting to $30,000, are excluded since the company has consistently followed this procedure for many years.

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Definitions:

Extraorganizational

Activities, processes, or relationships that exist or occur outside of an organization's own boundaries.

HR

Stands for Human Resources, a department within organizations focused on managing employee-related processes like hiring, training, and benefits administration.

CIM

Computer Integrated Manufacturing, an approach to manufacturing that integrates computer systems with physical manufacturing processes for efficiency and productivity improvements.

PLM

Product Lifecycle Management, a strategic approach to managing the series of changes a product goes through, from its design and development to its ultimate retirement.