Financial statements of limited companies

Question 1

Shareholders liability

Answer 1

shareholders have limited liability, but will be liable for any money unpaid on their shares

Question 2

Main types of shares

Answer 2

Ordinary shares is the main type of share that is issued by companies

Question 3

Loan capital

Answer 3

the form of loans and debentures is a further scource of finance

Question 4

Financial statements of a company include

Answer 4

A statement of changes in equity which follows the income statement

Question 5

Statement of financial position of a limited company

Answer 5

Includes an equity section which states the ownership of the company by its shareholders:

Ordinary shares issued
capital reserves and revenue reserves

Question 6

Capital reserves

Answer 6

Are created as a result of a non-trading profit and cannot be used to fund dividend payments