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Homework 1 - Introduction To Financial Statements

This document contains instructions for Homework 1, which has two parts. The first part asks students to discuss the complete set of financial statements, including the statement of financial position, statement of comprehensive income, statement of changes in equity, and statement of cash flows. They must compare and contrast the contents of these statements and include proper citations. The second part provides scenarios for analysis. Students must indicate whether each scenario pertains to fundamental or enhancing qualitative characteristics of financial reporting and identify the specific characteristic. The scenarios relate to comparing sales between competitors, reflecting a theft in the financial statements, comparing employee salaries between years, using current sales to project future sales, and using financial statements to make business decisions.

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Hazel Joy Demagante
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698 views

Homework 1 - Introduction To Financial Statements

This document contains instructions for Homework 1, which has two parts. The first part asks students to discuss the complete set of financial statements, including the statement of financial position, statement of comprehensive income, statement of changes in equity, and statement of cash flows. They must compare and contrast the contents of these statements and include proper citations. The second part provides scenarios for analysis. Students must indicate whether each scenario pertains to fundamental or enhancing qualitative characteristics of financial reporting and identify the specific characteristic. The scenarios relate to comparing sales between competitors, reflecting a theft in the financial statements, comparing employee salaries between years, using current sales to project future sales, and using financial statements to make business decisions.

Uploaded by

Hazel Joy Demagante
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Homework 1: Introduction to Financial Statement

Homework 1-1. (15 pts.)


Discuss the complete set of financial statements. Compare and contrast the contents of these financial statements.
Do not forget to include proper citation. No citation, no points.

Statement of
Statement of Statement of Statement of Cash
Differences Comprehensive
Financial Position Changes in Equity Flows
Income

Homework 1-2. (10 pts.)


You are given several scenarios for your analysis. In the second column, indicate whether the scenario pertains to
Fundamental or Enhancing Qualitative Characteristics. In the third column, indicate the specific characteristic.

Example:

The financial statements of Mr. Dela


Cruz’s car repair shop include
Faithful Representation -
explanatory notes about its Fundamental
Completeness
operations, aside from the numerical
figures.

Scenario Qualitative Characteristic Specific Characteristic


Mr. Dela Cruz compares his car
repair shop’s current year sales to
the current year sales to the current
year sales of his competitor, Mr. Del
Mundo
The financial statements of Mr. Dela
Cruz’s car repair shop reflect a theft
that happened during the year. Had
this event not reflected, Mr. Dela
Cruz would have not invested
additional cash to the business.
Mr. Dela Cruz’s repair shop
employed more employees in the
current year than with last year. To
verify and confirm this, Mr. Dela Cruz
compared the related salaries
expenses.
Mr. Dela Cruz noted that car
ownership for the area of his repair
shop is expected to increase by 8%
to 10%. Mr. Dela Cruz used the
current year sales in projecting
expected sales next year.
The financial statement of Mr. Dela
Cruz’s repair shop has been available
to him when he needed to make
decision in investing more cash to
the business.

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