A The context and purpose of financial reporting

Which statement shows an entity's assets, liabilities and equity at a particular date?

• 1 The statement of changes in equity
• 2 The statement of financial position
• 3 The statement of profit or loss
• 4 The statement of cash flows

Which body sets IFRS Accounting Standards?

• 1 The IFRS Advisory Council
• 2 The International Sustainability Standards Board
• 3 The IFRS Interpretations Committee
• 4 The International Accounting Standards Board

Which statement about a limited liability company is correct?

• 1 It is a separate legal entity from its owners
• 2 Its owners are always personally liable for all of its debts
• 3 It cannot own assets in its own name
• 4 Its owners must also manage it

Which of these is the main interest of a lender in the financial statements?

• 1 How many employees the entity plans to hire
• 2 Whether the entity will keep the lender as a customer
• 3 Whether directors are using a particular accounting package
• 4 Whether the entity can pay interest and repay the loan

Which of these is the best definition of a liability?

• 1 The residual interest in the assets after deducting liabilities
• 2 A present obligation to transfer an economic resource as a result of past events
• 3 A cost that the entity expects to incur in a future period
• 4 Any resource expected to bring economic benefits

Who is responsible for preparing a company's financial statements?

• 1 The company's customers
• 2 The external auditor
• 3 The directors
• 4 The tax authority