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IFRS and IAS Quiz

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Questions and Answers

Which one of the following statements is true about the balance sheet equation $A = L + E$?

Liabilities and equity must always be equal to assets (correct)

Assets must always be greater than liabilities and equity

Equity is the difference between assets and liabilities

Equity is equal to the sum of assets and liabilities

Which term is synonymous with 'Net Asset'?

Equity

Shareholder's Equity (correct)

Total Asset

Liabilities

What is the formula for calculating Shareholder's Equity?

E = A / L

E = A + L

E = A - L (correct)

E = A * L

According to the text, assets are resources controlled by the company as of which date?

<p>Balance sheet date</p> Signup and view all the answers

What is the fundamental balance sheet equation?

<p>E = A + L</p> Signup and view all the answers

Study Notes

Balance Sheet Equation

The balance sheet equation $A = L + E$ states that the total assets of a company are equal to the sum of its liabilities and equity.

Synonym for Net Asset

'Net Asset' is synonymous with 'Shareholder's Equity'.

Shareholder's Equity Formula

Shareholder's Equity is calculated as: Shareholder's Equity = Assets - Liabilities.

Assets Date

Assets are resources controlled by the company as of a specific date, usually a point in time at the end of an accounting period.

Fundamental Balance Sheet Equation

The fundamental balance sheet equation is Assets = Liabilities + Equity.

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Description

Test your knowledge on IFRS and IAS in advanced accounting. Assess your understanding of balance sheet concepts and the relationship between assets, liabilities, and equities.