Week 1

Question 1

Who is interested in Performance & Evaluations?

Answer 1

• Investors
• Employees
• Suppliers
• Customers
• Government
• General Public

Question 2

What is the required information for a Performance statement?

Answer 2

• Profitability, (Is the company making sufficient levels of profit?) - Statement of profit or loss
• Solvency, (ability to meet its commitments as they fall due) and risk (financial structure) - Statement of financial position (balance sheet)
• Is the company able to generate the cash that it
  needs? - Statement of cash flows

Question 3

What shows the performance of Profitability?

Answer 3

Statement of profit or loss

Question 4

What shows the performance of Solvency?

Answer 4

Statement of Financial position (balance sheet)

Question 5

What shows the performance of the company’s ability to generate cash

Answer 5

Statement of cash flows

Question 6

Statement of profit or loss equation

Answer 6

Revenue - Expenses

Question 7

Statement of Financial position equation

Answer 7

Assets = (Equity + Liabilities)

Question 8

What are the 3 determinants in the statement of cash flows equation?

Answer 8

• Cash flows from operating activities
• Cash flows from investing activities
• Cash flows from financing activities

Question 9

International Financial Reporting Standards (IFRS)

Answer 9

International Accounting Standards Board (IASB)
* Detailed rules
* Valuation, presentation and disclosure
* Narrow the areas of difference & variety of
accounting practice
* Consistency & comparability of financial reporting