Chapter 17, Problem 1QS

To determine

Introduction:

General Purpose Financial Statements:

• Financial statements are financial records of the entities transactions for a given reporting period and indicate the financial health of an entity. They comprise of:

1. Income Statements and Notes to Income Statement,

2. Statement of Retained Earnings

3. Statement of Shareholders’ Equity.

4. Balance Sheets and,

5. Cash flow statements.

• Income Statements and Notes to Income Statement record the results of the company’s operations during a particular reporting period and provide information about the sources of funds and expenses of an entity.

• Statement of Retained Earnings is an indicator of the change in the retained earnings i.e. the net earnings after all the expenses have been incurred and the balance of the incomes over expenses carried over to the next reporting period.

• Statement of Shareholders’ Equity is a statement detailing the breakup of the shareholders equity capital held in the reporting entity detailing the movement and changes in the same for a reporting period.

• Balance Sheet is a list of the closing balance of assets and liabilities of an entity as on a particular date and it is used for analysis of the financial health of the entity.

• Cash flow statements are a record of the cash inflows and cash outflows of an entity during a reporting period. It analyses the cash flows pertaining to operating activities, investing activities and financing activities.

To Determine:

Items that form part of financial reporting but are not included in General Purpose Financial Statements.