Chapter 4

Question 1

Annual report typically includes

Answer 1

Corporate Information
Analysis and Commentaries
Other statements and disclosures
Financial Statements

Question 2

Account Format VS Report Format

Answer 2

Account T (assets one side, liab + eq other)
Report Format (linear, assets, liab, eq)

Question 3

Comprehensive Income

Answer 3

(Plus) Revenues and Gains
(Less) Expenses and Losses
= Net Income/loss
- other comprehensive income
= Total Comprehensive income

Question 4

Expenses by nature VS Expenses by function

Answer 4

ex. Deprecation as a whole
or
Cost of administration

Question 5

3 Accounting Policy changes

Answer 5

1. changes in new accounting standards (IFRS)
2. changes in accounting estimates (ex. useful life of asset)
3. Changes in accounting policies (asset x, asset y)

Question 6

balance sheet does NOT have to include

Answer 6

Accumulated Depreciation

Question 7

Unqualified Opinion
vs
Qualified Opinion
vs
Adverse Opinion

Answer 7

All is good
Most is good
Big issue

Question 8

Cash Realization Ratio

Answer 8

How much cash did the company generate out of its profits?

CFO/Net Profit