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Are cash assets or liabilities included in the financial statements of a company?
Cash assets are included in the financial statements of a company, while liabilities are also included.
Why companies consolidate their subsidiaries for financial reporting purposes?
Subsidiary companies are also part of group of companies so parent company is required to show the financial statements of group as a whole so that's why consolidated financial statements are prepared
What Objective of financial statements?
The objective of financial statements is to provide relevant and reliable information about a company’s financial performance and position to various stakeholders, including investors, creditors, and regulators. They aim to help users make informed economic decisions by presenting a clear picture of the company’s profitability, liquidity, and overall financial health. Financial statements also enhance transparency and accountability by adhering to established accounting standards.
What is a unconsolidated balance sheet?
When there is parent subsidiary relationship exists and in that case if separate financial statements are prepared by both parent and subsidiary company those statements are called unconsolidated statements.
What are financial reports that summarize the financial condition and operations of a business?
Financial statements are financial reports which summarize the financial condition and operations of a business. Included in a financial statement are a balance sheet, income statement, and also a cash flow statement.
Why is it important to adopt a consistent basis for the preparation of financial statement?
Comparability. It is important to allow users of financial statements to compare statements in order to identify trends within an industry or entity and to assist the relative performance of a company across time and across a specific industry. See IFRS: Frame work for the Preparation and Presentation of Financial Statements (A39- 42) Further as the basis by which the entity prepares its financial statements needs to be disclosed ( And changes in policy elaborated upon) it also inhibits adopting favourable accounting policies on a whim in order mislead users of financial statements
Is giving a false statement as a witness a criminal offense?
Yes you can be charged with obstruction of justice. If the false statements are given in court or under oath, you could also be charged with perjury.
What are the roles played by directors in terms of the published statements of a company?
Directors are responsible for overseeing the preparation and approval of a company's published financial statements to ensure they accurately reflect the company's financial position. They also play a key role in ensuring the statements comply with relevant accounting standards and regulations. Additionally, directors are responsible for reviewing the statements for accuracy and providing assurances to shareholders and other stakeholders regarding the company's financial performance.
What do auditors do?
An auditor specialises in examining and verifying a set of financial statements by reference to evidence (physical, oral, documentary, etc). When he/she are satisfied that the financial statements are true and fair, the auditor will issue a clean auditors' report; on the other hand, if the financial statements or the company are detected to show problems (e.g. show signs of fraudulent activity), the auditor's report will also make this clear.
Of what importance is an accountant to the entrepreneur?
An accountant not only provides the financial data and statements for the business but also interprets the information for the entrepreneur.
How are common-size financial statements produced?
The total used by the analyst in vertical analysis on the income statement is net sales revenue, while on the balance sheet it is total assets. This approach, also known as component percentages, produces common-size financial statements.
What are the two major financial statement?
They are the Income Statement also known as Profit and Loss and the other one is the Statement of Financial Position also known as Balance Sheet.
