Easy
Which of the following statements best describes the term “going concern”?
A. When the current liabilities of an entity continue in operation for assets
B. The ability of the entity to continue in operation for the foreseeable future
C. The potential to contribute to the flow of cash and cash equivalents to the entity
B. The ability of the entity to continue in operation for the foreseeable future
It is intended to provide information about the parent's assets, liabilities, equity, income, and expenses, rather than those of its subsidiaries.
A. Unconsolidated Financial Statement
B. Consolidated Financial Statement
C. Individual Financial Statement
D. Combined Financial Statement
A. Unconsolidated Financial Statement
Abc Company chose to prepare its financial statement from Oct 1, 2022 to Sep 20, 2023. What type of accounting period did they follow?
A. Calendar year
B. Natural Business Year
C. Fiscal Year
C. Fiscal Year
This financial statement shows how much money a company made and spent over a period of time by recognising its income and expenses
Income statement
A reporting entity is an entity that must or chooses to prepare financial statements. Which of the following is a reporting entity?
A. A single entity
B. A part of an entity
C. More than one entity
D. All of the above
D. All of the above
Which of the following is true?
I. A reporting entity may consist of more than one entity or may be made up of more than one entity.
II. Financial statements include information about transactions and other events that have occurred after the end of the reporting period if providing that information is necessary to meet the objective of the financial statement.
III. Sometimes one entity (parent) has control over another entity (subsidiary).
A. II
B. I, and II
C. I, II, and III
D. None
C. I, II, and III
A company's indefinite life is divided into time periods.
Reporting Period
Which of the following statements is not an objective of financial reporting?
a. Provide information that is useful in investment and credit decisions.
b. Provide information about enterprise resources, claims to those resources, and changes to them.
c. Provide information on the liquidation value of an enterprise.
d. Provide information that is useful in assessing prospects for future net cash inflows.
Provide information on the liquidation value of an enterprise.
Jollibee Foods Corporation, as the parent company, controls Chowking, Greenwich, and Mang Inasal as its subsidiaries. Including its subsidiaries, what financial statement must Jollibee provide?
A. Unconsolidated Financial Statement
B. Consolidated Financial Statement
C. Individual Financial Statement
D. Combined Financial Statement
B. Consolidated Financial Statement
It is the one that is required, or chooses, to prepare financial statements and is not necessarily a legal entity.
Reporting Entity
The financial statements of a reporting company that consists of two or more entities that are not entirely connected by a parent-subsidiary connection are referred to as
A. Unconsolidated Financial Statement
B. Consolidated Financial Statement
C. Individual Financial Statement
D. Combined Financial Statement
D. Combined Financial Statement
Which of the following statements are true about reporting entity?
I. The very foundation of the cost principle
II. Is useful to users of financial statements.
III. It is required or chooses to prepare Financial Statements
IV. is a business with an obligation to prepare external financial reports for the benefit of parties with an interest in its operations, such as suppliers and investors.
a. I and II
b. II and III
c. III and IV
d. I and IV
c. III and IV