Financial Statements Paper 1


A primary objective of external financial reporting is


Notes to financial statements are beneficial in meeting the disclosure requirements of financial reporting. The notes should not be used to


The management of ABC Corporation is analyzing the financial statements of XYZ Corporation because ABC is strongly considering purchasing a block of XYZ ordinary shares that would give ABC significant influence over XYZ. Which financial statement should ABC primarily use to assess the amounts, timing, and certainty of future cash flows of XYZ Company?


An entity that sprays chemicals in residences to eliminate or prevent infestation of insects requires that customers prepay for 3 months’ service at the beginning of each new quarter. Select the term that appropriately describes this situation from the viewpoint of the entity.


Which of the following is true regarding the comparison of managerial and financial accounting?


The financial statements included in the annual report to the shareholders are least useful to which one of the following?


The primary purpose of the statement of financial position is to reflect


Prepaid expenses are valued on the statement of financial position at the


Dixon Company has the following items recorded on its financial records:
Available-for-sale securities .............$200,000
Prepaid expenses............................$400,000
Treasury stock................................$100,000
The total amount of the above items to be shown as assets on Dixon’s statement of financial position is


The accounting equation (assets – liabilities = equity) reflects the


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