Fundamentals of Financial Statement Analysis - Session 2
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Questions and Answers

What is comprehensive income defined as?

  • The change in equity of a company from non-owner sources (correct)
  • The net income of a company during a period
  • The total revenues and expenses of a company during a period
  • The investments by owners and distributions to owners

    • What is included in total comprehensive income?

  • Net income only
  • Both net income and OCI (correct)
  • Other Comprehensive Income (OCI) only
  • Changes in equity from investments by owners

    • Which financial statement item is Other Comprehensive Income (OCI)?

  • Cash Flow Statement item
  • Income Statement item
  • Equity item (correct)
  • Balance Sheet item

    • What does the Financial Statement Analysis Framework include?

    <p>Balance Sheet, Income Statement, Cash Flow Statement, and MD&amp;A</p> Signup and view all the answers

    Which financial document includes discussions on the company's performance, financial condition, and future prospects?

    <p>Management’s Discussion and Analysis (MD&amp;A)</p> Signup and view all the answers

    What is excluded from comprehensive income calculations?

    <p>Investments by owners</p> Signup and view all the answers

    Which financial statement provides a detailed summary of all the cash inflows and outflows during a period?

    <p>Cash Flow Statement</p> Signup and view all the answers

    Under which category are cash flows related to the company's day-to-day activities, such as cash inflows from cash sales and cash payments for inventory?

    <p>Operating activities</p> Signup and view all the answers

    Which item is included in the components of shareholders' equity?

    <p>Changes in the funded status of postretirement plans</p> Signup and view all the answers

    Which type of income statement provides accrual-based information?

    <p>Income Statement</p> Signup and view all the answers

    What does the Cash Flow Statement help assess?

    <p>Future cash flows</p> Signup and view all the answers

    Which category includes cash flows related to purchasing and selling investments?

    <p>Investing activities</p> Signup and view all the answers

    What is an essential measure of profitability according to the provided text?

    <p>Net income</p> Signup and view all the answers

    What is ultimately responsible for repaying loans, replacing equipment, and paying dividends according to the text?

    <p>Cash flow</p> Signup and view all the answers

    Where do unrealized gains or losses on investment securities categorised as 'available-for-sale' fall under?

    <p>Investing activities</p> Signup and view all the answers

    What does the Statement of Changes in Equity report?

    <p>Changes in each shareholder’s equity account and total equity for the period</p> Signup and view all the answers

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