Which statement is true?
Chairman’s letters are part of a financial statement
Corporate annual reports are part of a financial statement.
Management discussions and analysis are part of notes to the accounts.
Financial statements are part of corporate annual reports.
Corporate annual reports typically appear in this order:
Corporate information, other statements and disclosures, analysis and commentaries, and financial statements
Financial statements, analysis and commentaries, other statements and disclosures, and corporate information
Corporate information, analysis and commentaries, other statements and disclosures, and financial statements
. Financial statements, other statement and disclosures, analysis and commentaries, and corporate information
The first item in the analysis and commentaries section of an annual report is typically:
Management analysis and discussions
Chairman’s message/letter to shareholders
Auditor’s report on the company’s financial position and performance
Segment performance
Who is responsible for the preparation of financial statements?
Auditor
. Management
Chief Financial Officer (CFO) and the accounting staf
Chairman of the Board
Materiality means:
The amount in question had the potential to result in a different decision had it been known to financial statement users.
The amount in question is greater than 10% of total assets
The amount in question is greater than 10% of revenue
The amount in question would have resulted in a different decision had it been known to financial statement users.
IAS 1 does not require the following item to be displayed on the statement of financial position:
Provisions
Cash and cash equivalents
Accumulated depreciation
. Intangible assets
Which of the following is correct?
A statement of financial position contains information about how components of equity change during a period
An entity is not allowed to aggregate its revenue into one single line on the Income Statement
Entities must present their statement of comprehensive income, followed by the statement of financial position, statement of changes in equity, and, lastly, statement of cash flows.
Other comprehensive income items may turn a “loss” on the Income Statement into a “profit” on the statement of comprehensive income.
An entity has the following balances: Cash $15,000, Inventory $10,000, Receivables $22,000, PPE $50,000, and Intangible assets $40,000. Its total current assets are:
$25,000
. $37,000
. $47,000
. $97,000
All of the following may explain changes in equity from one period to another, except for:
. Additional share issuance during the period
Payment of dividend during the period
Increase in the entity’s share price during the year
Total comprehensive income
Which of the following statements best describes notes to the financial statements?
They are part of a complete set of financial statements
They are used to explain how the company has performed during the financial year.
. They provide a breakdown of all the numbers that appear on financial statements.
The more important numbers are shown on the financial statements and the less important ones are shown in the notes to the financial statements.
