Purpose of financial statements:

Cards (53)

  • What is the main purpose of financial statements?
    Summarize financial activities
  • What does the Balance Sheet track?
    Assets, liabilities, equity
  • The Balance Sheet provides a snapshot of a business's assets, liabilities, and equity
  • What key information is provided by the Income Statement?
    Revenue, expenses, profit/loss
  • What is the purpose of the Balance Sheet when compared to the Income Statement?
    Snapshot of financial position
  • The Balance Sheet provides a snapshot of financial position at a specific point in time.

    True
  • What type of time period does the Balance Sheet represent?
    Specific point in time
  • What are the three key components of the Balance Sheet?
    Assets, Liabilities, Equity
  • What does the Cash Flow Statement track over a period?
    Cash movement
  • What are the two main types of stakeholders?
    Internal and External
  • Match the financial statement with its definition:
    Balance Sheet ↔️ Shows assets, liabilities, equity at a point in time
    Income Statement ↔️ Shows revenue, expenses, profit/loss over a period
  • What are the three key financial statements in order?
    Income Statement, Balance Sheet, Cash Flow Statement
  • What does the Balance Sheet provide a snapshot of?
    Financial position
  • Match the financial statement with its focus:
    Income Statement ↔️ Profitability
    Balance Sheet ↔️ Financial Position
    Cash Flow Statement ↔️ Liquidity and Solvency
  • The Income Statement provides a snapshot of financial position at a specific point in time.
    False
  • The Balance Sheet covers a specific period of time, such as a quarter or a year.
    False
  • What does the Income Statement measure?
    Profitability
  • What are the two main financial statements according to the study material?
    Balance sheet, income statement
  • Which stakeholders use financial statements for decision-making?
    Internal and external
  • The Cash Flow Statement tracks the movement of cash in and out of the business over a period of time.
    True
  • What does the Income Statement measure over a period of time?
    Profitability
  • Match the financial statement with its purpose:
    Income Statement ↔️ Measures financial performance over a period
    Balance Sheet ↔️ Provides a snapshot of financial position
  • Revenue is the money earned from selling goods and services.
    True
  • The Balance Sheet covers a specific period, such as a year or quarter.
    False
  • Stakeholders are individuals or groups with an interest in a business.

    True
  • Which stakeholders use financial statements to assess creditworthiness?
    External stakeholders
  • The Income Statement indicates financial performance over a period.
    True
  • The Income Statement measures profitability over a period
  • The Income Statement shows revenue and expenses
  • What does the Balance Sheet indicate about a business's financial position?
    What it owns and owes
  • What does the Cash Flow Statement provide insights into?
    Liquidity and solvency
  • Internal stakeholders use financial statements to make operational and strategic
  • The Cash Flow Statement supports decisions related to working capital management
  • The key financial statements are the Income Statement, Balance Sheet, and Cash Flow Statement
  • The Cash Flow Statement monitors the movement of cash in and out of the business.
    True
  • The Income Statement shows a business's revenue, expenses, and profit/loss over a period of time.

    True
  • The Balance Sheet provides a snapshot of a business's financial position at a specific point in time
  • The three key financial statements are Income Statement, Balance Sheet, and Cash Flow Statement
  • The Cash Flow Statement shows the movement of cash in and out of a business
  • The Income Statement measures a business's profitability over a period of time