FA Chapter 4 Quiz

The statement of changes in equity following the statement of financial position

The statement of comprehensive income first and the statement of changes in equity last.

. If presented in two-statement format, the Income Statement immediately followed by the statement of comprehensive income

The statement of financial position more prominently than the other statements.

For the purpose of classifying assets and liabilities into current and non-current components, the entity’s operating cycle can be more than 12 months

. Intangible assets must be presented separately in the statement of financial position.

Assets and liabilities can be offset if they arise from the same transaction or event.

Assets and liabilities must be presented in the order of decreasing liquidity.

Company M’s management is unable to extend its long-term loan, and, given its losses in recent years, it is unlikely that it will be able to raise funds through other means to pay for the loan

Company K’s management intends to liquidate the entity

Company L’s management is being forced to cease the entity’s operations due to a major change in government policies.

. None of the three companies is likely to be a going concern

Must not reclassify the comparative amounts unless absolutely necessary.

Must reclassify comparative amounts, unless it is impractical to do so.

Has an unrestricted choice whether to reclassify the comparative amount or not.

. Must preserve consistency in reporting, and no new reclassification should be allowed.

The name of the reporting entity

The presentation currency and level of rounding used.

The country in which the entity operates.

The date of the end of the reporting period or the period covered by the financial statements.

. Must be presented separately if they are material.

May be aggregated if accompanied by a note to the account explaining the breakdown

Must always be presented separately in financial statements

Must be aggregated until they are material.

The nature of the omission or misstatement

The size of the omission or misstatement

. Both the nature and size of the omission or misstatement.

The higher of 10% of total assets and 10% of total revenue.

Only the immediate past financial period.

Only for material items on the financial statements

The previous comparable period for all amounts reported in the financial statements

The previous comparable period for all amounts reported in the financial statements, as well as any narrative and descriptive information

Other comprehensive income was lower than net profit.

There was a new share issuance

Total comprehensive income was higher than net profit.

. Prior-period errors resulted from overstatement of the previous year’s profits.

Explaining why a certain accounting standard was not followed.

Providing disclosures of items not shown on the face of financial statements.

Providing additional breakdown of line items on the face of financial statements.

Explaining the accounting policies used.