CHAPTER 3

Question 1

are structured representation of financial position and Financial Statemence of an entity

Answer 1

Financial statements

Question 2

What are the objective of financial statements give 3

Answer 2

Provide information (financial position,financial performance and cash flows)

Question 3

The financial statements that are prepared to provide useful information to a wide ray of users

Answer 3

General-purpose financial statements

Question 4

The financial statements that are prepared to provide useful information to a wide ray of users

Answer 4

General-purpose financial statements

Question 5

In layman’s language financial statements are

Answer 5

end products

Question 6

What does IFRS means?

Answer 6

Fair presentation, and compliance with International Financial Reporting Standard.

Question 7

what does ias mean

Answer 7

International Accounting Standards

Question 8

What are the remaining 5 conditions in going concern and Accrual Basis of accounting?

Answer 8

Materiality and aggregation,off setting, frequency of reporting and comparative information, consistency of presentation, identification of the financial statements.

Question 9

An entity shall present such material, class of similar items.

Answer 9

Materiality And Aggregation

Question 10

An entity shall not offset assets and liabilities, income and expenses unless required and permitted by an IFRS.

Answer 10

Offsetting

Question 11

An entity shall present with equal prominence each financial statement in a complete set of financial statements, including comparative information in respect of the previous period for all amounts record reported in the current pre its financial statement at least annually.

Answer 11

Frequency of Reporting and Comparative Information

Question 12

An entity shall retain the presentation and classification of items in the financial statements in successive periods, unless an alternative would be more appropriate or an IFRS requires a change in presentation.

Answer 12

Consistency of Presentation

Question 13

An entity shall clearly identify the financial statements, and distinguish them from other information in the same published document.

Answer 13

Identification of the Financial Statements

Question 14

What are the six basic financial statements as per revised IAS? Number 1

Answer 14

No.1, Balance Sheet. No. 2, Income Statement. No. 3, a statement of changes in equity for the period. No. 4, a statement of cash flows for the period. No. 5, notes pricing, a summary of significant accounting policies and other explanatory information. No. 6, a statement of financial position.

Question 15

Is a financial statement that shows the financial position of an enterprise as of a particular date.

Answer 15

Statement of Financial Position

Question 16

Is the stability of the enterprise to meet currently maturing obligations.

Answer 16

Liquidity

Question 17

Is the availability of cash over the longer term, to meet maturing obligations.

Answer 17

Solvency

Question 18

Is the availability of cash over the longer term, to meet maturing obligations.

Answer 18

Solvency

Question 19

Like, is the source of financing for assets of the enterprise, and indicates how much is borrowed capital and how much is equity capital.

Answer 19

Financial Structure

Question 20

Is the financial flexibility of the enterprise to use the available cash for unexpected requirements and investment opportunities.

Answer 20

Capacity for Adaptation

Question 21

The statement of Financial Position, previously known as Balance Sheet, shows the.

Answer 21

Assets, Liabilities,Owner’s Equity

Question 22

Assets,Liabilities and Owner’s Equity are called?

Answer 22

Accounting Values

Question 23

In layman’s language, these are the things of value or rights that are owned and used by the business in the conduct of its operation, such as cash, land, building inventories, furniture and fixtures, machinaries and equipment, prepaid expenses.

Answer 23

Assets

Question 24

Assets includes accounts collectible by the business, which we term as.

Answer 24

Receivable

Question 25

In layman's language, these are debts or financial obligations of the business that are payable in cash or in some kind of assets such as accounts payable, notes payable, salaries payable, mortgage payable.

Answer 25

Liabilities

Question 26

In layman's language, this refers to money or value of property put by the proprietor into the business to start with, which refers to initial investment.

Answer 26

Owner’s Equity

Question 27

Owner’s equity is expressed in the equation as

Answer 27

A-L=OE

Question 28

Which is previously known as “income statement”, it's a financial statement that shows the “results of operations”of the business for a given period of time.

Answer 28

Statement of Comprehensive Income

Question 29

Statement of Comprehensive income consists of 3 sections

Answer 29

Revenue or Income, Expenses,and Profit or Loss

Question 30

Denote money or proceeds from services rendered by a servicing company or income from use by other entities of the resources of the enterprise, such as rent income, royalties.

Answer 30

Revenues or Income

Question 31

Denote the benefit received by the business from its use, which had help in carrying out its operation like salaries expense, rent expense, repairs and maintenance, taxes and license.

Answer 31

Expenses

Question 32

The excess of revenues over expense

Answer 32

Profit

Question 33

Excess expenses over revenue

Answer 33

Loss

Question 34

Is a financial statement that summarizes the changes in equity for a given period of time.

Answer 34

Statement of Changes in Owner’s Equity

Question 35

Is a financial statement that provides information about the causes of change in an entity's cash balance, from the beginning to the end of a given period of time.

Answer 35

Statement of Cash Flows

Question 36

What are the 3 Major Activities of statement of cash flows?

Answer 36

Operating Activities, Investing Activities, Financing Activities

Question 37

Activities that are cash inflows and outflows, generated from normal operations or day to day transactions of the business.

Answer 37

Operating Activities

Question 38

Activities that these are cash inflows and outflows generated from following some transaction such as cash received from sale of property and equipment, cash paid to purchase of asset other than inventory.

Answer 38

Investing Activities

Question 39

Activities that these are cash inflows and outflows generated from following some transaction such as cash received from sale of property and equipment, cash paid to purchase of asset other than inventory.

Answer 39

Investing Activities

Question 40

These are cash inflows and outflows generated from following transactions, cash received from cash investment by owner, cash received from loan obtained from bank, cash paid to payment of loan from bank and other lender, cash paid to payment of owners withdrawal.

Answer 40

Financing Activities

Question 41

These are cash inflows and outflows generated from following transactions, cash received from cash investment by owner, cash received from loan obtained from bank, cash paid to payment of loan from bank and other lender, cash paid to payment of owners withdrawal.

Answer 41

Financing Activities