Yr1 AcF 100 - Prep financial statements and internal control

What is the main purpose of accounting?

• Decision-making

• Communication

• Record-keeping

• Analysis

What are the main financial statements in accounting?

• Statement of Assets, Statement of Liabilities, Statement of Expenses

• Income Statement, Cash Flow Statement, Statement of Equity

• Balance Sheet, Income Statement, Statement of Cash Flows

• Statement of Profit or Loss, Statement of Financial Position, Statement of Cash Flows

What is the main objective of general purpose financial reporting according to the International Accounting Standards Board?

• To provide information about the social impact of the reporting entity

• To provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors

• To provide information about the environmental impact of the reporting entity

• To provide detailed information about the internal operations of the reporting entity

What is the equation for Equity Capital?

• Equity Capital = Assets - Liabilities

• Equity Capital = Liabilities - Assets

• Equity Capital = Assets + Liabilities

• Equity Capital = Liabilities + Assets

Which financial statement is also known as the Balance Sheet?

• Statement of Profit or Loss

• Statement of Financial Position

• Statement of Cash Flows

• Income Statement

What is the main limitation of financial statements?

• They do not involve any costs and revenues

• They involve a substantial degree of classification, aggregation and allocation

• They capture non-financial aspects of the business

• They provide forward-looking information

What is the main focus of financial accounting?

• Decision-making

• Communication

• Analysis

• Record-keeping

What is the formula for calculating Net Income?

• Net Income = Total Revenue - Total Expenses

• Net Income = Total Expenses - Total Revenue

• Net Income = Total Revenue + Total Expenses

• Net Income = Total Expenses + Total Revenue

What is the main purpose of the Statement of Cash Flows?

• To provide information about the company's cash receipts and cash payments during an accounting period

• To provide information about the company's profit or loss during an accounting period

• To provide information about the company's financial position at the end of an accounting period

• To provide information about the company's equity at the end of an accounting period

What is the main difference between financial accounting and management accounting?

• Financial accounting is for internal use, while management accounting is for external use

• Financial accounting is for external use, while management accounting is for internal use

• Financial accounting focuses on the past, while management accounting focuses on the future

• Financial accounting focuses on the future, while management accounting focuses on the past