Financial statements

What is the purpose of preparing the Statement of Financial Performance?

• inform stakeholders the profitability of business

• inform stakeholders the income and expenses of business

• inform stakeholders the nature of business

• inform stakeholders the size of business

What is the purpose of the Statement of Financial Position?

• inform stakeholders the assets and liabilities of business

• provides information on how resources are obtained and used and the claim by the owner on the net assets of the business at a point in time.

• provides information on how resources are obtained and used in the business at a point in time.

• inform stakeholders the owner's equity of business

What is the equation to calculate Gross profit?

• Sales revenue + Income - Expenses

• (Sales revenue - Sales returns) - Cost of sales

• (Sales revenue + Cost of sales) - Sales returns

• (Sales revenue + Sales returns) - Cost of sales

What is the meaning of Gross profit?

• profit from providing services to customers

• profit from providing money to customers

• profit from providing goods to customers

• profit from providing loans to customers

What is the meaning of Profit for the year?

• is the overall final money earned from operating the business

• is the overall final income earned from operating the business

• is the overall final position earned from operating the business

• is the overall final profit earned from operating the business

What are the steps to calculate Profit for the year?

• Gross profit + Income - Capital

• Gross profit + Income + Expenses

• Gross profit + Income - Expenses

• Gross profit - Income - Expenses

Which of the following are items of Expenses?

• salaries, utilities, inventory, discount allowed

• salaries, utilities, insurance, discount allowed

• salaries, utilities, interest received, discount allowed

• salaries, utilities, loan, discount allowed

What is the difference between non-current assets and current assets?

• NCA provide benefits that are used within one financial period but CA provide benefits that last beyond one financial period

• NCA provide benefits that last beyond one financial period but CA provide benefits that are used within one financial period

• NCA are easily converted to cash but CA are not easily converted to cash easily

• NCA are not loans but CA are loans

What is the accounting equation used in the Statement of Financial Position?

• Total assets = Total Income + Equity

• Total assets = Total Loan + Equity

• Total assets = Total liabilities + Equity

• Total assets = Total Liabilities - Equity

Calculate the amount for current liabilities.

Fixtures $1 000 Loan $10 000 Trade payables $6 000

Discount received $400 Bank overdraft $700

• $11 000

• $16 000

• $16 700

• $6 700