18 Questions
What are the two main categories of liabilities?
Current and non-current
What is the main purpose of the Statement of Profit or Loss?
To show the revenues and expenses of the company
How are assets classified in the Statement of Financial Position?
Into current and non-current assets
What is the primary goal of financial statement analysis?
To evaluate the financial performance and position of the company
What is owner's equity comprised of?
Capital employed by the owner
Which financial statement presents the financial position of the company at a particular point in time?
Statement of Financial Position
What is the primary goal of financial statements according to the IASB Framework?
To provide information about the financial position, performance and changes in financial position of an enterprise
What type of statement highlights the relative strength or position of a business at a point in time?
Statement of Financial Position
What is the term for assets that are expected to be converted into cash or used up within a year or within the company's normal operating cycle?
Current assets
Which of the following statements is true about the income statement?
It shows the company's revenues and expenses over a period of time
What are the three main components of a company's balance sheet?
Assets, liabilities, and owner's equity
What is the term for the review of a company's books, financial statements, and look for any errors and discrepancies?
Auditing
What is the main difference between non-current liabilities and current liabilities?
Non-current liabilities can be settled more than a year, while current liabilities need to be settled within a year
What is the primary purpose of the revenue account in the income statement?
To record economic benefits received by the business
What type of asset is a patent?
Intangible asset
What is the owner's equity in a business?
The wealth of the business owned by the owners
What is the main difference between current assets and non-current assets?
Current assets have a useful life of less than one year, while non-current assets have a useful life of more than one year
What are the three elements of financial statements?
Revenue, Expenses, and Profit
Test your knowledge of financial statements, including the elements of assets, liabilities, and equity, as well as the users of financial statements, such as internal and external users. Review the concepts of financial reporting and analysis.
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