Chapter 7: Introduction to Single Entity Accounts

Question 1

What is the purpose of financial statements?

Answer 1

To provide information bout the financial position, performance and cash flows that is useful in making economic decisions. Enables shareholders, banks, suppliers to make decisions.

Question 2

What does IAS 1 define a complete set of financial statements as?

Answer 2

Statement of financial position at the end of the period
Statement of profit or loss and other comprehensive income for the period
Statement of changes in equity for the period
Statement of cash flows for the period
Notes, comprising a summary of significant accounting policies and other explanatory notes
Comparative information prescribed by the standard

Question 3

What are the concepts and considerations affecting financial statements?

Answer 3

Fair presentation
Going concern
Accruals basis
Consistency
Materiality and aggregation
Off-setting
Comparative information