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Questions and Answers
What is the primary purpose of financial accounting?
Who is the primary recipient of financial accounting information?
What does managerial accounting primarily focus on?
Which document provides a detailed view of a company's property and rights?
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What role do financial statements play in management?
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What is the main focus of the IAS 1 standard?
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What is the significance of the notes to financial statements?
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In terms of accounting systems, which statement is true?
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What distinguishes current assets from non-current assets?
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Which of the following statements accurately describes liabilities?
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Which of the following best represents the company’s wealth?
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What does EBIT measure in a company?
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Which option correctly explains equity in a company?
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In the accounting equation, what does the letter 'E' represent?
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What is gross margin in the context of an income statement?
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Which liabilities arise as a result of business operations?
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What do operating costs refer to in the context of revenue?
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What does CFO stand for in the context of cash flow?
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Which of the following statements is true about CFI?
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How is net profit derived in financial statements?
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What role do financial costs play in determining profit before taxes?
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Study Notes
Financial and Management Accounting
- Two accounting systems exists within companies
- Financial accounting represents the financial and economic company position
- Management accounting processes information needed for managerial decisions and evaluations
- Financial Statements are the starting point for management performance assessments
Financial Statements Structure
- Income Statement represents the difference between revenues and costs
- Balance Sheet represents the set of conditions (assets and liabilities) that the company owns and uses
- Cash Flow Statement shows the cash flow generated by operational, investment and finance activities
Balance Sheet
- Represents the company's assets, liabilities and equity
- Assets are classified into current and non-current
- Liabilities are classified into current and non-current, and operating and financial
- Equity represents capital contribution by shareholders
Income Statement
- Reflects revenues, operating costs, and net profit
- Operating Profit (EBIT) is the income from typical business activity before interest and taxes
- Gross Margin is the difference between revenue and manufacturing costs excluding general overhead costs
Cash Flow Statement
- Represents the cash generated from operational, investing and financing activities
- CFO represents the cash flow from regular business operations
- CFI represents the cash flow from investment and divestment activities
- CFF represents the cash flow from financing activities such as new issues and dividend distribution
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Description
This quiz explores the foundational concepts of financial and management accounting. It covers the structure of financial statements, including income statements, balance sheets, and cash flow statements, as well as the classification of assets and liabilities. Perfect for those looking to understand how these aspects contribute to company performance evaluations.
