FinancialStatement Assertion

Question 1

Income and balance sheet assertion

Answer 1

Here are the simplified smart notes:

Financial Statement Assertions

Assertions about Transactions/Events and Related Disclosures:

1. Occurrence: Transactions occurred and relate to the entity.
2. Completeness: All transactions are recorded.
3. Accuracy: Transactions are recorded accurately.
4. Cut-off: Transactions are recorded in the correct period.
5. Classification: Transactions are recorded in the proper accounts.
6. Presentation: Transactions are aggregated/disaggregated and described clearly.

Assertions about Account Balances and Related Disclosures:

1. Existence: Assets, liabilities, and equity interests exist.
2. Rights and Obligations: Entity holds rights to assets and liabilities are those of the entity’s.
3. Completeness: All account balances are recorded.
4. Accuracy, Valuation, and Allocation: Account balances are accurate and valued correctly.
5. Classification: Account balances are aggregated/disaggregated and described clearly.
6. Presentation: Account balances are presented clearly and understandably.