Unit 3: Financial Statements

Question 1

Statement of Financial Position / Balance Sheet

Answer 1

A position statement that reports the financial condition (financial standing; financial strength) of an entity at the end of the period and presents an organized list of assets, liabilities, and equity

Question 2

Current Assets

Answer 2

Resources that a business owns and expects to use or sell within a year.

Question 3

Statement of Cash Flows

Answer 3

A change statement disclosing the events that caused cash to change for the period

Question 4

Non-current assets

Answer 4

Long-term investments that are not easily converted to cash or are not expected to become cash within an accounting year.

Are expected to be used during more than one period

Ex: properties, land, buildings, equipment

Question 5

Current Liabilities

Answer 5

Debts a company must pay within a normal operating cycle, usually less than 12 months

Question 6

Non-current liabilities

Answer 6

Debts or other financial obligations that can be paid after a year.

Question 7

Statement of Changes in Owner’s Equity

Answer 7

A change statement that discloses the events that caused the owner’s equity to change for the period

Question 8

Statement of Profit & Loss

Answer 8

A change statement that summarizes the profit-generating transactions that changes the owner’s equity for the period and reports an entity’s financial performance, that is, its net profit or net loss, for the period