Scanning Financial Statements

The video tutorial guides viewers through the process of analyzing financial statements to identify discrepancies. The instructor tells the story of Mr. Alex, who suspects errors in his 2015 financial statements after a new accountant took over. The tutorial involves comparing 2014 and 2015 statements, checking liabilities, assets, and the profit and loss account for errors. The instructor highlights discrepancies, such as incorrect totals and missing entries, and suggests corrections. The video concludes with a list of concerns and a to-do list for Mr. Alex to verify certain figures.

What was the main reason Mr. Alex felt uncomfortable with the new accountant?

• The accountant was too friendly.

• The accountant was too slow.

• The accountant prepared the accounts too quickly.

• The accountant was too expensive.

What discrepancy was found in the 2015 balance sheet?

• The balance sheet was missing.

• Both sides showed the same incorrect total.

• Assets were overstated.

• Liabilities were understated.

What was the issue with the interest on the long-term loan?

• Interest was not charged.

• Interest was charged at a higher rate.

• Interest was charged at a lower rate.

• Interest was charged twice.

What was the problem with the cash balance in the statements?

• It was overstated.

• It was shown as a liability.

• It was missing from the statements.

• It was shown as a credit balance.

What was suggested to verify the high debtor figures?

• Ignore them.

• Get confirmation from debtors.

• Reduce the figures.

• Increase the figures.

What was the issue with the opening stock in the profit and loss account?

• It was recorded as zero.

• It was recorded incorrectly.

• It was not recorded.

• It was recorded twice.

What percentage of sales was the gross profit supposed to be?

• 35%

• 30%

• 25%

• 20%

What was the concern regarding the advertisement expenses?

• They were too low.

• They were not recorded.

• They were unusually high.

• They were missing.

What was the issue with the salary in the balance sheet?

• It was recorded twice.

• It was not recorded.

• It was understated.

• It was overstated.

What was the final recommendation for Mr. Alex regarding the accountant?

• Ignore the discrepancies.

• Hire a new accountant.

• Do nothing.

• Verify the concerns and take action.