Management Financial Statement Assertions

Question 1

What is the definition for the Existence/Occurrence management financial statement assertion?

Answer 1

Whether account balances exist at a given date. Whether transactions occurred during an accounting period and, whether recorded items relate to the entity.

Question 2

What is the definition of the completeness management financial statement assertions

Answer 2

Whether all transactions, events and accounts are included that should be included and all disclosures are included.

Question 3

Define the Cut-off management assertion

Answer 3

Whether all transactions and events have been recorded into the correct accounting period.

Question 4

Define the Rights and obligations assertion

Answer 4

Whether assets are the rights of the entity and whether its liabilities are its obligations at the year end.

Question 5

Define the accuracy, valuation and allocation

Answer 5

Whether assets and liabilities are included in the financial statements at the appropriate amounts and that valuation adjustments have been included.

Question 6

Define the classification assertion

Answer 6

Items are recorded in their correct amounts.

Question 7

Define the presentation assertion

Answer 7

Whether the components are properly described and disclosures are relevant and understandable in accordance with accounting standards.