Financial Statements

Question 1

Income Statement

Answer 1

• reports accrual based performance over a period of time ; it is dated as fiscal year end (Dec. 31)
• captures all revenues, expenses, gains, and losses that were incurred during the period
• certain items are excluded in I/S because they are included in comprehensive income

Question 2

Statement of Comprehensive Income

Answer 2

reports NON-owner changes to equity over a period of time which is dated as fiscal year (Dec. 31)

• unrealized gains and losses on investments in Available For Sale Securities
• certain pension adjustments
• foreign translation currency adjustments
• certain hedge accounting adjustments

Question 3

Balance Sheet

Answer 3

• economic resources and obligation as of the specific date
• assets are presented in order of liquidity
• liabilities are presented in order of maturity
• current/long-term designation
• various measurement attributes (eg. FV, NPV, historical cost)

Question 4

Statement of SE

Answer 4

• reports changes related to the owners equity over a period of time
• dates as fiscal year ended
• owners equity presented in order of permanence
• contributed capital is shown first because it will not be returned to shareholders
• RE is last because it is least permanent since dividends are paid from RE

Question 5

Statement of C/F

Answer 5

• reports changes of cash over a period of time
• dated as fiscal year ended Dec 31

OPERATING: cf related to I/S transactions
INVESTING: cf related to long-term assets and investments
FINANCING: cf related to liability and owner equity

Question 6

Footnotes and Opinion

Answer 6

• footnote disclosures and supplementary schedules

- auditors opinion (conformed with GAAP)