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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.
Who prepares financial statements of a company?
Financial statements of a company are typically prepared by the accounting department, which may include accountants and financial analysts. They gather and analyze financial data to ensure accuracy and compliance with accounting standards. External auditors may also review these statements to provide an independent verification before they are published or filed with regulatory authorities. Ultimately, the company's management is responsible for the integrity of the financial statements.
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
How is capital reserve made?
A capital reserve is created by transferring a portion of a company's profits or retained earnings into a separate account designated for specific future purposes, such as expansion or debt repayment. This transfer is typically done through a board resolution and is often reflected in the company's financial statements. Capital reserves can also arise from the revaluation of assets or gains from the sale of fixed assets. Unlike revenue reserves, capital reserves are not intended for distribution as dividends.
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.
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.
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
Identify one type of software that you may use to display the financial statements?
One type of software commonly used to display financial statements is accounting software, such as QuickBooks. This software allows businesses to generate key financial documents, including income statements, balance sheets, and cash flow statements, in a user-friendly format. It also offers features for tracking expenses, managing invoices, and generating reports, making it easier to analyze financial performance.
Who signs audited statements?
Audited financial statements are typically signed by the company's management, including the CEO and CFO, to affirm their accuracy and compliance with accounting standards. Additionally, the independent auditor who performed the audit also signs the statements, providing their opinion on the financial statements' fairness and adherence to generally accepted accounting principles (GAAP). This dual-signature process enhances the credibility and reliability of the financial information presented.
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.
