BA 99.1

These are accounting information users who are interested in information about profitability and stability of an entity in order to assess the ability of the entity to provide remuneration, retirement benefits and employment opportunities.

• employees

• Customers

• suppliers

• trade creditors

Which of the following is not a financial statement?

• cash flow statement

• income statement

• trial balance

• statement of financial position

It is an application of elements of financial statements where cost is expense outright because of the uncertainty of future economic benefits.

• immediate recognition

• matching principle

• cause and effect association

• systematic and rational allocation

What form of Business Organization owned by one individual only?

• partnership

• sole proprietorship

• cooperative

• corporation

Financial information exhibits the characteristics of consistency when

• Gains and losses are not included on the income statement.

• Expenses are reported as charges against revenue in the period in which they are paid.

• Accounting procedures are adopted which give a consistent rate of net income.

• Accounting entities give accountable events the same accounting treatment from period to period.

These are the resources controlled by the entity as a result of past events and which future economic benefits are expected to flow to the entity.

• liabilities

• assets

• expenses

• income

Which of the following terms best describes information in financial statements that is neutral?

• unbiased

• understandable

• relevant

• reliable

Which of the following best describes "financial position"?

• The income, expenses and profit or loss of an entity.

• The assets, liabilities and equity of an entity.

• The financial assets less liabilities of an entity.

• The monetary assets less monetary liabilities.

These are the present obligations arising from past events the settlement of which is expected to result in an outflow of resources embodying economic benefits

• liabilities

• assets

• income

• expenses

Under realization concept, income has been earned when

• the payment has been received for the service rendered

• the service has been rendered and payment has been received

• The service has been rendered in full

• there is advance payment from a customer