ACCCOB2_1_Intro to FA_Part 2

Financial statements are the principal means through which financial information is communicated to those outside an enterprise.

• T

• F

Liabilities are financial resources of a business entity.

• T

• F

Owner's equity refers to the owner's share in a business.

• T

• F

Revenue, expenses and drawings are necessary in the computation of the net income.

• T

• F

Expenses of a company includes assets taken and used by the owner for personal purposes.

• T

• F

Profit is the difference between

• assets and liabilities.

• the incoming cash and outgoing cash.

• the assets purchased with cash contributed by the owner and the cash spent to operate the business.

• the assets received for goods and services and the amounts used to provide the goods and services.

The information provided by financial reporting pertains to

• an economy as a whole and to members of society as consumers, rather than to individual enterprises or industries.

• individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers.

• individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers.

• business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers.

Assets are

• always greater than liabilities.

• either cash or accounts receivables.

• financed by the owner and/or creditors.

• the same as expenses because they are acquired with cash.

The financial statements most frequently provided include all of the following, EXCEPT

• Statement of profit or loss.

• Statement of cash flows.

• Statement of account.

• Statement of financial position.

Which of the following financial statements reports information as of a specific date?

• Statement of profit or loss.

• Statement of cash flows.

• Statement of financial position.

• Statement of owner's equity.