Published Financial Statements Of Ltd Companies

Question 1

Financially directors are stewards of…

Answer 1

The financial information of the company

Question 2

The filing deadlines after the end of the accounting period are:
private limited companies ?
plc ?

Answer 2

Nine months for private limited company

Six months for plc

Question 3

Under IAS1 what is the objective of financial statements?

Answer 3

IAS1 states that “the objective of financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions”

Question 4

IAS1 states that a complete set of financial statements comprises of?

Answer 4

• Statement of financial position
• Statement of profit or loss and other comprehensive income
• Statement of changes in equity
• Statements of cash flows
• Accounting policies and explanatory notes
• Comparative information for the preceding period

Question 5

Under IAS1 which financial stements should be given most prominence ?

Answer 5

Under IAS1 all financial statements should be given equal prominence

Question 6

IAS1 requires that an entity whose financial statements comply with the standards should make an ? and ?statement of such compliance notes

Answer 6

Explicit And Unreserved

Question 7

What are the accounting concepts under IAS1?

Answer 7

Going concern 
Accrual basis of accounting 
materiality and aggregation 
offsetting 
frequency of reporting 
comparative information

Question 8

Which items must be detailed on the face of the statements?

Answer 8

Revenue 
Finance costs 
Share of the profit or loss of associates 
Tax expense 
Other comprehensive income for the year

Question 9

Should income and expense be disclosed separately ?

Answer 9

Income and expense are not to be presented as extraordinary items, either on the face of the income statement or in the notes. When items are material their nature and amount is to be disclosed separately.

Question 10

How are expenses analysed in the statement of profit or loss and other comprehensive income?

Answer 10

By nature
Or
By function

Question 11

What are interim dividends?

Answer 11

They are usually paid just over halfway through the financial year. They are based on profits during the first half of the year.

Question 12

What are final dividends?

Answer 12

Final dividends are paid early in the next financial year they are based on profits reported for the full year. Final dividends are proposed by the directors but have to be approved by shareholders at the annual general meeting AGM of the company

Question 13

Under IAS1 is it a requirement to separate assets and liabilities into current and non-current?

Answer 13

Yes IAS1 requires most companies to separate assets and liabilities into non-current asset current assets non-current liabilities and current liabilities

Question 14

What are current assets under IAS1

Answer 14

• Cash or cash equivalent
• those to be realised sold or used within the normal operating cycle
• assets held for trading and expected to be realised within 12 months

Question 15

What are current liabilities under IAS1?

Answer 15

• Expected to be settled within the normal operating cycle
• liability is held for trading and expected to be settled within 12 months
• where the company does not have an unconditional right to defer payment beyond 12 months

Question 16

AS1 requires a number of disclosures about share capital what are they?

Answer 16

• The number of shares authorised
• the number of shares issued and fully paid and issued but for not fully paid for
• the par value per share or that the shares have no par value

Question 17

What is in the directors report?

Answer 17

The directors report includes the reviews of the activities of the company over the past year and of likely development in the future

Question 18

What is statement of cash flows?

Answer 18

Statement of cash flows shows an overall view of money flowing in and out during an accounting period. It links profit with changes in assets and liabilities and the effect on the cash of the company.

Question 19

What is an unqualified opinion of the auditors?

Answer 19

And unqualified opinion is presented by the auditors if the financial statements have been prepared properly and if they give a true and fair view of the company’s affairs in accordance with laws and international reporting standards and if the information given in the directors report is consistent with the financial statements.

Question 20

What is a qualified opinion of the auditors?

Answer 20

A qualified opinion of the auditors is presented if the financial statements have not been dealt with correctly and that this is important enough to be brought to the attention of the registrar of companies and other users of the financial statements such as investors or suppliers

Question 21

What is a bonus issue?

Answer 21

It is the capitalisation of reserves either capital or revenue in the form of free shares issued to existing shareholders in proportion to their holdings no cash flows into the company.

Question 22

What is a rights issue?

Answer 22

It is the raising of cash by offering shares to existing shareholders in proportion to their holdings at a favourable price.