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CA Inter Framework for preparation and presentation of financial statements — practice questions

Explore 56 free Framework for preparation and presentation of financial statements questions in CA Inter Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Framework for preparation and presentation of financial statements questions and exercises with answers

Showing questions 1–30 of 56.

Which statement reports assets, liabilities and equity at a given date?Read the answer and worked solution →Which statement summarises income, expenses and profits for a stated period?Read the answer and worked solution →Operating, investing and financing activities are reported in which statement?Read the answer and worked solution →Which statement reports the changes in a company's equity over a stated period?Read the answer and worked solution →Financial statements mainly give information useful for what?Read the answer and worked solution →Which is NOT a quality financial statements are expected to have?Read the answer and worked solution →Readers of financial statements are assumed to have what knowledge?Read the answer and worked solution →Which guidelines give a uniform basis for preparing statements?Read the answer and worked solution →Which body develops the International Financial Reporting Standards?Read the answer and worked solution →The MD&A in an annual report is what kind of explanation?Read the answer and worked solution →Which users rely on statements to decide on granting debt financing?Read the answer and worked solution →Why do employees and unions use a company's financial statements?Read the answer and worked solution →Under IFRS, financial reports chiefly help whom?Read the answer and worked solution →Opening cash Rs 40,000; inflows Rs 1,20,000; outflows Rs 90,000. Closing cash?Read the answer and worked solution →Opening retained earnings 2,00,000, profit 80,000, dividend 30,000. Closing?Read the answer and worked solution →Total assets are Rs 9,00,000 and liabilities Rs 3,50,000. What is owners' equity?Read the answer and worked solution →Sales 10,00,000; COGS 6,00,000; SGA 1,50,000; depreciation 50,000. EBIT?Read the answer and worked solution →Which accounting provides information to help managers run the business?Read the answer and worked solution →What is the aim of cost accounting?Read the answer and worked solution →The matching principle reports an expense in the period of which item?Read the answer and worked solution →Cash basis accounting recognises an expense when what happens?Read the answer and worked solution →When are revenues recorded under revenue recognition?Read the answer and worked solution →How is a prepaid expense shown until it is used up?Read the answer and worked solution →Which cost is expensed at once when no revenue link exists?Read the answer and worked solution →Reporting economic reality rather than legal form is which principle?Read the answer and worked solution →When may a lease be a finance lease despite no title transfer?Read the answer and worked solution →Substance over form is critical for which attribute of financial reporting?Read the answer and worked solution →How does the IASB framework define a liability?Read the answer and worked solution →An obligation implied by circumstances, not a contract, is called what?Read the answer and worked solution →Liabilities expected to be liquidated within a year are classed as what?Read the answer and worked solution →

Worked practice questions

Which statement reports assets, liabilities and equity at a given date?

  1. Statement of equity
  2. Cash flow statement
  3. Balance sheet
  4. Income statement
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Correct answer: C. Balance sheet

The balance sheet is a snapshot of assets, liabilities and owners' equity on one date, unlike the period statements.

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Which statement summarises income, expenses and profits for a stated period?

  1. Balance sheet
  2. Income statement
  3. Statement of equity
  4. Cash flow statement
Show answer and solution

Correct answer: B. Income statement

The income statement, also called the profit and loss statement, covers sales and expenses incurred over the period.

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Operating, investing and financing activities are reported in which statement?

  1. Income statement
  2. Statement of equity
  3. Cash flow statement
  4. Balance sheet
Show answer and solution

Correct answer: C. Cash flow statement

Splitting cash movements into operating, investing and financing activities is the job of the cash flow statement.

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More Accounting topics

AS 3 Cash Flow StatementSchedule III Division I Financial StatementsAS 19 LeasesValuation of Inventories (AS 2)AS 22 Taxes on IncomeAS 28 Impairment of AssetsProperty, Plant and EquipmentAS 17 Segment Reporting