Accounting
Question 1:
a) List out the financial statements that reporting enterprises present in their annual
reports. What information can be derived from these statements?
b) What are the objectives of financial statements?
c) Who are the users of financial information? What decisions do these users make and
what information do they need?
d) What are the principle qualitative characteristics of financial information? Explain
these characteristics. Are there other qualitative characteristics? If there are, list and
explain them.
e) List and define the elements of financial statements.
Answers for given questions:
Question 1 (a)
List out the financial statements that reporting enterprises present in their annual reports. What information can be derived from these statements?
Financial statements (or financial reports) are formal records of a business' financial activities. These statements provide an overview of a business' profitability and financial condition in both short and long term. The reports contain financial information about an organization. Financial statements also provide information of value to company officials as well as to various outsiders, such as investors and lenders of funds. Financial statements include notes, which are considered an integral part of the statements. The notes contain required disclosures of additional data, assumptions and methodologies employed, and other information deemed useful to users. The financial statements of publicly owned companies also include an auditor's report, indicating that the statements have been audited by independent auditors. The auditor's opinion is related to fair presentation in conformity with GAAP.
There are four basic financial statements:
1. Balance Sheet
It is referred to as statement of financial condition, reports on a...
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