INTRODUCTION TO FINANCIAL ACCOUNTING

Shareholders receive annual accounts, prepared in accordance with legal and professional requirements

• TRUE

• FALSE

The accounts of limited liability companies are sometimes filed with the Registrar of Companies

• TRUE

• FALSE

Employees always receive the company's accounts and an employee report

• TRUE

• FALSE

Banks frequently require more information than is supplied in the published accounts when considering applications for loans and overdraft facilities

• Yes, banks may require cash flow and profit forecasts and budgets prepared to show management's estimates of future activity in the business.

• NO, banks may require cash flow and profit forecasts and budgets prepared to show management's estimates of future activity in the business.

Which of the following is most useful for managers?

• Financial statements for the last financial year

• Tax records for the past five years

• Budgets for the coming financial year

• Bank statements for the past year

Which of the following is an asset according to the definition in the Conceptual framework?

• Bank overdraft

• Factory buildings

• Payables

• Amounts owed to tax authorities

The financial statements of a limited liability company will consist solely of the statement of financial position and statement of profit or loss. Is this statement true or false?

• TRUE

• FALSE

A business entity is owned and run by Alpha, Beta and Gamma. What type of business is this an example of?

• Sole trader

• Partnership

• Limited liability company

• None of the above

Which of the following is an example of a liability?

• Inventory

• Receivables

• Plant and machinery

• Loan

What are the two main financial statements drawn up by accountants?

• The statement of profit or loss and the statement of debt position

• The statement of profit or loss and the statement of financial position

• The statement of profit and the statement of financial position