Chapter One: Regulatory Frameworks

Question 1

What is the statement of financial position?

Answer 1

Provides information on the financial position of a business. (It’s assets and liabilities and capital/equity at a point in time).

Question 2

What is the statement of profit or loss and other comprehensive income?

Answer 2

Provides information on the performance of a business (the profit or loss which results from trading over a period of time). As well as other gains/losses not recognised in the P/L.

Question 3

What is the statement of changes in equity?

Answer 3

Provides information about how the equity of the company has changed over the period.

Question 4

What is the statement of cash flows?

Answer 4

Provides information on the financial adaptability of a business (the movement of cash into and out of the business over a period of time).

Question 5

What is the meaning of ‘Stewardship’?

Answer 5

Stewardship is the accountability of management for the resources of the business entrusted to them by the owners or the Government.

Question 6

What does the Companies Act 2006 contain guidance on?

Answer 6

Formats for the financial statements, fundamental account principles, valuation of items included in the financial statements.

Question 7

What are IFRS Standards?

Answer 7

Accounting standards issued by the IASB.