Recording and Reporting 2*

Question 1

what do financial statements comprise of? (5)

Answer 1

• SOFP
• SOCI
• SOCF
• SOCE (statement of change in equity)
• disclosures (detailed notes)

Question 2

define and explan an SOFP (2)

Answer 2

• statement of financial position
  – reports business’ situations on reporting date with respect to its financing anf investing activities

Question 3

define and explan an SOCI (3)

Answer 3

• statement of comprehensive income
  – shows business’ financial performance during the reporting period
  – it reports the effects of operating activities, focussing on revenue, expenses and profit

Question 4

define and explan an SOCF (3)

Answer 4

• statement of cash flows
  – shows financial performance
  – reports exclusively cash flows for reporting periods, catergorised according to financing, investing, and operating activities

Question 5

define and explan an SOCE (3)

Answer 5

• statement of changes in equity
  – reports movements in categories of equity reported on the statement of financial position
  – including the effects of the dividend decision

Question 6

define and explan disclosures (2)

Answer 6

• most informations included in financial statements is historic
• insights they provide into the business should enable users to take a view of its ability to create value in the future