3.5.1 - INTERPRETATION of FINANICAL STATEMENTS (HAVENT LEARNT IN CLass)

Question 1

What are 2 TYPES of FINANCIAL STATEMENTS

Answer 1

• STATEMENTS of COMPREHENSIVE INCOME (Profit and Loss) for the Year and shows Other Items of Comprehensive Income
• STATEMENT of FINANCIAL POSITION (balance sheet) which Shows the ASSETS, LIABILITIES and CAPITAL of BUSINESS

Question 2

Explain the STAKEHOLDER INTEREST of STATEMENT of COMPREHENSIVE INCOME - SHAREHOLDERS

Answer 2

• INTERESTED in the PROFIT MADE by the BUSINESS particular NET PROFIT (profit of year after tax)
• RISING PROFITS also SHOW INDICATION of IMPROVING PERFORMANCE

Question 3

Explain the STAKEHOLDER INTEREST of STATEMENT of COMPREHENSIVE INCOME - MANAGERS and DIRECTORS

Answer 3

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Question 4

Explain the STAKEHOLDER INTEREST of STATEMENT of COMPREHENSIVE INCOME - EMPLOYEES

Answer 4

If EMPLOYEES are SEEKING a WAGE INCREASE it may be HELPFUL to have ACESS to INFORMATION in STATEMENT of COMPREHENSIVE INCOME to PRESENT a CLIAM

Question 5

Explain the STAKEHOLDER INTEREST of STATEMENT of COMPREHENSIVE INCOME - SUPPLIERS

Answer 5

.

Question 6

STATEMENT of FINANCIAL POSITION

Answer 6

provides SUMMARY of Business’ ASSETS, LIABILITIES and CAPITAL

Question 7

STAKHOLDER INTEREST

Answer 7

MAKE FLASHCARD ON STAKEHOLDER INTEREST - SHAREHOLDERS, MANAGERS AND SUPPLIERS