Understanding Financial Statements and Stakeholders

What does a profit and loss account (statement of comprehensive income) show?

• The financial position of an enterprise at a point in time

• The profit or loss of an enterprise over time

• The cash flow of an enterprise

• The equity of an enterprise

Which of the following is NOT a component of the profit and loss account?

• Revenue

• Fixed assets

• Gross profit

• Expenses

What is the formula for calculating gross profit?

• Revenue - Cost of Sales

• Revenue - Expenses

• Net Profit - Expenses

• Cost of Sales + Expenses

Which statement shows the financial performance of an enterprise at a point in time?

• Profit and loss account

• Balance sheet

• Cash flow statement

• Statement of changes in equity

What are current assets?

• Assets that are expected to be used or converted into cash within one year

• Assets that are expected to be used or converted into cash after one year

• Assets that are intangible

• Assets that are depreciated over time

Which of the following is considered a non-current liability?

• Accounts payable

• Bank loan due in 5 years

• Inventory

• Cash at bank

What is working capital?

• Fixed assets minus current liabilities

• Current assets minus current liabilities

• Total assets minus total liabilities

• Equity minus liabilities

Who among the following is NOT typically considered a stakeholder in an enterprise?

• Owner(s)

• Competitors

• Employees

• Lenders

What does equity represent in a balance sheet?

• The total liabilities of an enterprise

• The owner's claim after all liabilities have been settled

• The total assets of an enterprise

• The cash flow of an enterprise

Which of the following would be classified as a current liability?

• Mortgage payable

• Accounts payable

• Equipment

• Retained earnings