25 Questions
Which of the following correctly describes the accounting form of the statement of financial position?
Total assets are presented on the left, and liabilities and capital are presented on the right.
What does the statement of comprehensive income provide information about?
The financial performance of the company by computing the net income or net loss.
How can the statement of comprehensive income be presented?
Using two separate statements for profit and losses, and other comprehensive income.
How does the statement of comprehensive income of a service company differ from that of a merchandising company?
The source of income for a service company is different from that of a merchandising company.
Which of the following correctly describes the purpose of the statement of financial position?
To distinguish current from non-current assets and liabilities
Which form of presentation lists the total assets, liabilities, and capital vertically in the statement of financial position?
Report form
What is the main difference between the statement of comprehensive income of a service company and a merchandising company?
The computation of net sales and cost of goods sold
Which of the following correctly describes the purpose of the statement of financial position?
To distinguish current from non-current assets and liabilities
What is the main difference between the statement of comprehensive income of a service company and a merchandising company?
The computation of net sales and cost of goods sold
Which form of business organization is Juan's Janitorial Services most likely to be?
Sole proprietorship
What is the main purpose of the statement of changes in equity?
To show the movement of equity or capital account
What is the net loss for Juan's Janitorial Services for the year ended December 31, 2016?
$45,000
Which form of business organization does Juan's Janitorial Services belong to?
Sole proprietorship
What is the equity section called for a partnership?
Partner's Equity
What does the statement of Changes in Equity show?
Details of changes in capital
Which form of business organization does Juan's Janitorial Services most likely belong to?
Sole proprietorship
What is the net loss for Juan's Janitorial Services for the year ended December 31, 2016?
P 45,000
Which of the following activities is categorized as an operating activity in the cash flow statement?
Paying utilities
Which of the following activities is categorized as an investing activity in the cash flow statement?
Receiving cash from sale of goods
Which of the following activities is categorized as a financing activity in the cash flow statement?
Withdrawing investment
Which of the following activities is categorized as an operating activity in the cash flow statement?
Paid utilities
What is the net cash flow generated by/used in operating activities?
-20,000
Which of the following activities is categorized as an operating activity in the cash flow statement?
Paid utilities
Which of the following activities is categorized as an operating activity in the cash flow statement?
Paid utilities
What is the net cash flow generated by/used in operating activities?
100,000
Study Notes
Statement of Financial Position
- The accounting form of the statement of financial position is a vertical presentation, listing total assets, liabilities, and capital.
- The purpose of the statement of financial position is to provide a snapshot of a company's financial situation at a specific point in time.
Statement of Comprehensive Income
- The statement of comprehensive income provides information about a company's revenues, expenses, and net income.
- The statement of comprehensive income can be presented in a single-step or multi-step format.
- The main difference between the statement of comprehensive income of a service company and a merchandising company is the presence of cost of goods sold in the merchandising company's statement.
Business Organization
- Juan's Janitorial Services is most likely a partnership or sole proprietorship.
- The equity section for a partnership is called the "partners' capital" or "partners' equity" account.
Statement of Changes in Equity
- The statement of changes in equity shows the changes in a company's equity over a period of time, including dividends, share issuances, and changes in retained earnings.
Cash Flow Statement
- Operating activities include cash flows related to net income, such as cash received from customers and cash paid to suppliers.
- Investing activities include cash flows related to the purchase and sale of assets, such as property and equipment.
- Financing activities include cash flows related to debt and equity, such as loans and share issuances.
- The net cash flow generated by/used in operating activities is the total cash inflows minus the total cash outflows from operating activities.
Test your knowledge on temporary accounts and their role in the Statement of Financial Position (SFP) and Statement of Comprehensive Income (SCI). This quiz will cover the transfer of balances from temporary accounts to the capital account and the resulting impact on the beginning balances.
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