34 Questions
A complete set of financial statements includes all of the following components, except
Environmental reports and value added statements
What is the objective of financial statements?
To provide financial position, financial performance and changes in financial position useful to a wide range of users
The primary responsibility for the preparation of the financial statements is reposed in
Management of the entity
The major financial statements include all of the following, except
Statement of Retained Earnings
The major financial statements include all of the following except
Statement of Changes in Financial Position
When an entity changed the reporting period longer or shorter than one year, an entity shall disclose all of the following except:
The fact that similar entities in the geographical area in which the entity operates have done so
Which of the following is not a component of the financial statements?
Report of Board of Directors
What is NOT included in a complete set of financial statements?
Statement of retained earnings
What is the primary responsibility for the preparation of financial statements?
Accountants
Which of the following is INCLUDED in a complete set of financial statements?
A statement of changes in equity
Which of the following is INCLUDED within the financial statements?
A statement of retained earnings
An entity shall clearly identify each financial statement and display all of the following, EXCEPT
Names of major shareholders of the entity
Which statement is INCORRECT concerning fair presentation of financial statements?
An entity whose financial statements comply with PFRS shall not make an explicit and unreserved statement of such compliance in notes
Financial statements MUST be prepared at least
Annually
Which of the following cannot be considered fair presentation of financial statements?
To rectify inappropriate accounting policies either by the disclosure of the accounting policies used or by notes or by explanatory information
The effects of transaction and other events on economic resources and claims are depicted in the periods in which those effects occur even if the resulting cash receipts and payments occur in a different period
Accrual Accounting
Which statement indicates a going concern?
None of these would indicate going concern
An entity is permitted to depart from a particular standard if all of the following conditions are satisfied, EXCEPT
When the Conceptual Framework for Financial Statement Reporting prohibits such a departure
Technically, offsetting in financial statements is accomplished when:
Gain or loss from disposal of noncurrent asset is reported by deducting from the proceeds the carrying amount of the asset and the related disposal cost
The presentation and classification of items in the financial statements shall be retained from one accounting period to the next
Consistency of Presentation
A third statement of financial position as at the beginning of the earliest comparative period presented is required
Under all of these circumstances
The overall objective of the financial reporting is to provide information
That is useful for decision making
The primary focus of financial reporting has been on meeting the needs of which of the following groups?
Existing potential investors, lenders, and other creditors
The primary objective of financial reporting is to provide useful information to
Capital providers
Which group is NOT among the external users for whom financial statements are prepared?
All of these are external users of financial statements
Which of the following is an INTERNAL user of financial information?
Board of Directors
These users require information on risk and return provided by their investment
Investors
These users are interested in information about the profitability and stability of the entity in order to assess the ability of entity to provide remuneration, retirement benefits, and employment opportunities
Employees
These users are interested in information that enables them to assess whether their loans, the related interest thereon, and other amounts owing to them will be paid when due
Lenders and other creditors
Darwin Company provided the following information at year end: Cash 1,500,000 Accounts Receivable 3,200,000 Inventory, including inventory expected in the ordinary course of operations to be sold beyond 12 months amounting to 700,000 1,000,000 Financial asset held for trading 300,000 Equity investment at FVOCI 800,000 Investment in Associate 2,500,000 Equipment held for sale 2,000,000 Deferred tax asset 150,000
What amount should be reported as total current assets at year end?
8,000,000
When there is much variability, the operating cycle is measured at
Twelve months
The operating cycle of an entity
Is the time between the acquisition of materials entering into a process and their realization of cash
The entity shall classify an asset as current under all of the following conditions, except
The asset is cash or cash equivalent that is restricted to settle a liability for more than twelve months after the reporting period
An entity shall classify a liability as current when under all of the following conditions except
The entity has the right at the end of reporting period to defer settlement of the liability for at least twelve months after the reporting period
Learn the basics of how to read financial statements with this beginner's guide. Just like reading a nutrition label or a baseball box score, understanding financial statements is not difficult and doesn't require advanced knowledge. This brochure is designed to provide a basic understanding of financial statements.
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