Basic of the statements + CPA

Question 1

Name all of the statements and what they imply

Answer 1

1) Balance sheet

Assets = Liabilities + equity

2) Cash flow statement

All of the inflow and outflow of the cash balance

3) Statement of changes in equity

Shows hot equity evolved over the period
- Retained earnings
- Share capital

4) Income statement or statement of profit and loss

Contains three main elements
- Revenues
- Expenses
- Net income: Revenue-Expense

Question 2

What is a CPA’s involvement in financial statements

Answer 2

1) Can audit a company’s financial statement and provide an opinion on them

2) The involvement of a CPA is helpful in the preparation of a company’s projected financial statements

3) Helps understand financial information and participates in the decision-making process

4) Gives advice to managers in the decision making

5) organize and present the financial statements of the company