Financial statements : แบบฝึกหัด

What is the main purpose of an Income Statement (also known as a Statement of Profit or Loss and Other Comprehensive Income)?

In the Statement of Financial Position of a partnership, which of the following items represents a current liability?

Which of the following items would be correctly classified as a current asset on a company's Statement of Financial Position?

Which of the following represents the two primary financial statements that summarise a business's economic activities and financial health?

Name two main financial statements typically prepared by a business at the end of an accounting period.

Distinguish between a capital expenditure and a revenue expenditure, providing one example for each type that would typically appear in a business's financial statements.

Explain how the accounting concept of prudence (conservatism) impacts the recognition of assets and liabilities in the Statement of Financial Position and the reporting of profit in the Income Statement.

Green Mart Co. is a small retail business.

(a) Explain the primary purpose of preparing an Income Statement (Statement of Profit or Loss and Other Comprehensive Income) for Green Mart Co. at the end of its financial year.

(b) Identify one typical revenue account and one typical expense account that Green Mart Co. would report in its Income Statement, and briefly explain why each is classified as such.

Mr. Lee operates a sole proprietorship business, Lee's Tech Solutions, selling electronic gadgets. His accounting year ends on 30 June. The following Trial Balance was extracted from his books as at 30 June 2023:

Lee's Tech Solutions
Trial Balance as at 30 June 2023

Additional Information as at 30 June 2023:
1. Inventory at 30 June 2023 was valued at $$50,000$$.
2. General expenses of $$3,000$$ were prepaid.
3. Salaries expense of $$5,000$$ was accrued.
4. Depreciation is to be provided as follows:
a. Delivery Van: $$15\%$$ per annum on cost.
b. Equipment: $$20\%$$ per annum using the reducing balance method.
5. A provision for doubtful debts is to be created at $$4\%$$ of trade receivables.

Required:
Prepare for Lee's Tech Solutions for the year ended 30 June 2023:
(a) An Income Statement.
(b) A Statement of Financial Position.