Financial Statements Quiz

In a sole tradership, the financial statements prepared are typically:

• Statement of financial position (Balance sheet) and income statement

• Profit and Loss Account, Balance Sheet, and Cash Flow Statement

• Income Statement, Statement of Comprehensive Income, and Statement of Changes in Equity

• Statement of Cash Flows and Statement of Changes in Equity

In the financial statements of a sole trader, the owner’s capital is shown:

• On the liabilities side of the balance sheet

• In the profit and loss statement

• On the asset side of the balance sheet

• In the statement of cash flows

A partnership usually prepares which financial statement to show how profits are shared between partners?

• Statement of Changes in Equity

• Income Statement

• Profit and Loss Appropriation Account

• Cash Flow Statement

In a partnership, interest on capital is:

• An expense in the income statement

• Shown in the profit and loss appropriation account

• Added to partners’ drawings

• Not included in financial statements

In a limited company, the financial statements must comply with which set of standards?

Which accounting standards must be followed by a company listed on a stock exchange?

• International Financial Reporting Standards (IFRS)

• Generally Accepted Accounting Principles (GAAP)

• International Auditing Standards (IAS)

• Financial Conduct Authority (FCA) rules

In a limited company's financial statements, retained earnings are reported under:

• Non-current liabilities

• Shareholder's equity

• Revenue in the income statement

• Cash flow from investing activities

Dividends paid by a limited company are recorded in:

• The income statement as an expense

• The cash flow statement as an operating activity

• The statement of changes in equity

• The profit and loss appropriation account

In a limited liability partnership (LLP), partners’ capital accounts are shown in the financial statements under:

• Non-current liabilities

• Current liabilities

• Equity

• Revenue

In an LLP, which statement best describes the taxation of profits?

• Profits are taxed at the company level

• Partners are taxed individually on their share of profits

• Profits are exempt from taxation

• The LLP pays taxes on profits, and partners are taxed on dividends