equity and stakeholders

Question 1

equity and stakeholders:
what does an enterprise receive when it sets up as a company?

Answer 1

receives money from Investors who buy shares

Question 2

equity and stakeholders:
where does the shares appear on the balance sheet as?

Answer 2

equity

Question 3

equity and stakeholders:
what does the equity figure tells shareholders of?

Answer 3

the total amount that their shares are worth.

Question 4

equity and stakeholders:
what does the shareholders receive as a reward for investing?

Answer 4

receive regular dividends from the company’s profits. This means they
have a stake in the enterprise doing well.

Question 5

equity and stakeholders:
what does an equity show of the shareholders?

Answer 5

how much the shareholders own of the enterprise

Question 6

equity and stakeholders:
what does an equity show what the enterprise has done with?

Answer 6

any retained profit

Question 7

equity and stakeholders:
what does an equity show owned by the enterprise?

Answer 7

the appreciation of any assets owned

Question 8

Other stakeholders and financial documents:
what could be classed as a liability?

Answer 8

owner’s equity

Question 9

Other stakeholders and financial documents:
why is the owners equity different from other liabilities?

Answer 9

as it does not need to be repald by a certain date and it is not a fixed amount.

Question 10

Other stakeholders and financial documents:
why is the owners’ equity usually left in the enterprise?

Answer 10

as long as necessary and can change in value.

Question 11

Other stakeholders and financial documents:
what is a residual claim on the enterprise?

Answer 11

after all other liabilities have been paid

Question 12

Other stakeholders and financial documents:
what is the owners’ equity if Assets = Liabilities + Owners’ equity?

Answer 12

Assets - Labilities

Question 13

Stakeholders and their interest in
financial information of an enterprise: lenders

why do lenders rely on financial information?

Answer 13

understand the health and risks of the enterprise

Question 14

Stakeholders and their interest in
financial information of an enterprise: lenders

what can the lenders access to?

Answer 14

llauidity cash flow and overall solvency

Question 15

Stakeholders and their interest in
financial information of an enterprise: government

what do they require financial information for?

Answer 15

company tax and VAT purposes

Question 16

Stakeholders and their interest in
financial information of an enterprise: government

what can government make decisions about?

Answer 16

the economy based on the financial performance of all enterprises and businesses

Question 17

Stakeholders and their interest in
financial information of an enterprise: customers

why are they interested in enterprise that they want to buy goods from?

Answer 17

to judge its financial ability as a supplier of goods for them to remain solvent long enough to provide the goods and
services necessary

Question 18

Stakeholders and their interest in
financial information of an enterprise: employees

what do employees get given information on? (3)

Answer 18

the financial health, number of sales and profitability

Question 19

Stakeholders and their interest in
financial information of an enterprise: employees

what can they determine? (3)

Answer 19

job security
possibility of future pay rises and bonuses
benefits and employment opportunities

Question 20

Stakeholders and their interest in
financial information of an enterprise: owners and managers

what does it give an indication of?

Answer 20

the financial health of the enterprise, including liquidity and profitability

Question 21

Stakeholders and their interest in
financial information of an enterprise: owners and managers

why do they have a guided strategy?

Answer 21

to meet goals

Question 22

Stakeholders and their interest in
financial information of an enterprise: owners and managers

wha does it allow managers to make big decisions about?

Answer 22

the future of the enterprise, for example whether to expand

Question 23

Stakeholders and their interest in
financial information of an enterprise:
suppliers

why are they interested in enterprises financial statements?

Answer 23

to assess risk and therefore whether they are credit worthy

Question 24

Stakeholders and their interest in
financial information of an enterprise:
suppliers

what do they want to ensure before they offer credit?

Answer 24

want to ensure the enterprise has a healthy financial situation and can repay debts on time