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• 2 types of Financial Statements are ;

  1. General Purpose financial Statements
  2. Special Purpose Financial Statement
• A set of rules which helps to make functions and limitations of financial accounting and financial statement are known as ;

  Conceptual Framework.
• What does general purpose financial statements provide ?

  Financial performance, financial position and changes in financial position of an entity
• What is '' Going Concern Concept ''

  Underlying assumption in preparing financial statement.
• Fundamental qualitative characteristics of financial statements are ;

  • Relevance
  • Faithful representation
• what are the enhancing qualitative characteristics of Financial statements ?

  • Understandability
  • comparability
  • timeliness
  • verifiability
• What are the 3 sub characteristics that should be consisted if financial information is to be useful ?

  • Predictive value
  • Confirmatory value
  • Materiality
• To be a faithful Representation, what are the sub-characteristics that a financial statement should have;

  • completeness
  • Neutral
• What are the 5 elements of a financial Statements ?

  • Assets
  • Liabilities
  • Income
  • Expenses
  • Equity
• What are the 3 main characteristics of an Assets ;

  • Ability to generate economic benefits
  • Can be controlled by the entity
  • As a result of past transactions and events
• What are the 3 main characteristics of a Liability ?

  1. Outflow of future economic benefits
  2. There should be a present obligation
  3. As a result of past transactions and events
• • The amount you can expect to receive from selling an asset at the end of its useful life or after a certain period of use.

  Residual Value