FSA Intro 1

Providing information about the performance and financial position of companies so that users can make economic decisions best describes the role of_____________

• Auditing

• Accounting

• Financial reporting

• Financial statement analysis

A company’s current financial position would best be evaluated using the_______________________

• Balance sheet

• Income statement

• Cash flow

• Change in equity

Which of the following best describes the role of financial statement analysis?

• To provide information on a company's financial performance and position

• To use a company's financial report to evaluate its past present and potential performance

• To determine whether the company should close its operations

• None of these

A financial statement that shows what a business owns and owes at a particular point in time is_________

• A cash flow statement

• The bank statement for the business

• A balance sheet

• A statement of retained earnings

Which of the following statements about the primary purpose of financial reporting is the most correct?

• Provides information that can help with decision-making.

• The individual needs of users can be satisfied by tailoring of financial reports

• Enables accountability since managers would have to account for resources used

• A statement of retained earnings identified a range of existing and potential users dependant on financial statements to make decisions

The statement of cash flows clarifies cash flow according to

• Operating and non-operating flows

• Inflow and outflow

• Investing and non-operating flows

• operating, investing, and financing activities

Cash flow statement is based upon___________

• Accrual basis of accounting

• Cash basis of accounting

• Accounting equation

• Matching concept

When assets are subtracted from liabilities, it will be equal to

• Capital

• Net Income

• Working capital

• Goodwill

Which of the following is not a component of the statement of changes in equity?

• Other comprehensive income

• Treasury stock

• Retained earnings

• All the above

The Management Discussion and Analysis (MD&A) portion of the financial disclosure is required to discuss all of the following EXCEPT:

• Capital resources and liquidity.

• Expected effects of marketplace events.

• Results of operations.

• Financial position as on the last day