55 SURGENT 2110

Question 1

Under current generally accepted accounting principles, what statements are included to make up a complete set of financial statements for an annual period?

Answer 1

• balance sheet ( a statement of financial position) as of the last day of the year
• income statement (statement of profit or loss) for the year
• statement of cash flows
• statement of changes in stockholders’ equity (or retained earnings statement) for the year
• supplemental and note disclosures

Question 2

Does GAAP require a statement of changes in stockholders’ equity?

Answer 2

No.

Question 3

Does GAAP require that all material changes in equity be disclosed, either in a financial statement or in the notes to the financial statements?

Answer 3

Yes.

Question 4

Where do many enterprises choose to report their material changes in a financial statement?

Answer 4

in the statement of changes in stockholders’ equity

Question 5

Can you draw a diagram to show the relationship of various financial statements and disclosures?

Answer 5

Question 6

What does the balance sheet represent?

Answer 6

the position of the enterprise at a point in time (e.g. the end of the year).

Question 7

What do the other financial statements represent?

Answer 7

The other statements explain the financial impact of various activities occuring throughout the year.

Question 8

What are the supplemental and note disclosures designed for?

Answer 8

to expand and supplement the information included in all of the financial statements.

Question 9

2110.05

Answer 9

The balance sheet represents the position of the enterprise at a point in time (e.g., the end of the year). The other statements explain the financial impact of various activities occurring throughout the year. The supplemental and note disclosures are designed to expand and supplement the information included in all of the financial statements.