Ex-Post Income Case Study

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Question No 3

a) Explain the concept of ex-ante income and ex-post income. b) Why is it necessary to take into account the closing stock in preparing a trading account?
c) What is the difference between a balance sheet of a nonprofit organization and a for-profit business?

Concept of ex-ante income and ex-post income

EX-ANTE

EX-ANTE is a word derived from Latin for ‘before the event’, this term refers to future events such as future transactions, future events, future transactions or prospects of a company. With the help of EX-ANTE analysis we get an idea of future moments in price and the future impact of a newly implemented policy. Any prediction that is made prior
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Value of risk is a probability study that approximated the maximum amount of loss an investment portfolio may incur on a day and this value of risk study utilises ex-post data. EX-POST INCOME

Just as ex-post means actual events, Ex- Post Income means the actual Income that has been derived from present activities. It is used for analyzing of present or actual income that has been generated and the returns that has been earned.

In other words Ex ante Income therefore means actual or real income. This means that the income we receive is not planned or based on assumptions, but is the actual income derived. It is therefore reliable and exact and tells us about our real income.
For Example:
1) An employee planning for upgradation in his curriculum vitae thinks of joining a course and after finishing the course analysis increase in this earning capacity, this will be this Ex-Post Income.
2) A company wants to know the sales of newly launched product in the market, so here the Ex-Post income will be only determined after launching the product and then analyzing the income.

Why is it necessary to take into account the closing stock in preparing a trading
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3) In the balance sheet of For the Profit Organization the title shown in its heading is BALANCE SHEET.
4) Financial statements include Trading Account, profit and loss account and balance sheet.
5) The difference between total assets and total liabilities in For Profit Organizations is termed as OWNERS EQUITY or stockholders' equity.
6) Balance of the profit and loss account is either Net Profit or Net Loss.

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NOT FOR PROFIT ORGANIZATION

1) The main motive to this organization is to provide services. 2) It is represented by the General Fund comprising of donations, subscriptions, surplus, etc.
3) In the balance sheet of Not For Profit Organization the title shown in its heading i.e., the name of its financial statements is the STATEMENT OF FINANCIAL POSITION.
4) Financial Statements include receipts and payments account, income and expenditure account and balance sheet.
5) The difference between total assets and total liabilities in Not For Profit Organizations is termed as NET ASSETS. The reason is that these organizations do not hold any owners.
6) Balance of the Income and Expenditure Account is either Surplus or

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