Question

Reading Business Financial Information

1-Which is not one of the three main financial statements?

Review Later

Cash flow statement

Statement of equity

Balance sheet

Income statement

2-What does the balance sheet indicate?

Review Later

The financial strength of the business

The cash inflows and outflows of the business

The different types of products sold

The revenues and expenses of the business

3-Which is not a section in the financial statement note disclosures?

Review Later

Management discussion and analysis

Property, plant and equipment

Related party transactions

Share capital

4-If a company has net assets equal to $3.25 million but is sold for $5.35 million, how much goodwill does the acquirer record on their balance sheet?

Review Later

$8.6 million

$2.1 million

($2.1) million

$3.25 million

Answer 1

1)The three main financial statements are balance sheet, income statement and cash flow statement

So the correct option is statement of equity

2) The balance sheet tells us the financial condition or the strength of the company at a certain point of time

So the first option is correct

3) management discussion and analysis is a different segment of the annual statement and not a part of financial statement notes disclosures. So it's the correct option.

4) the correct option is $ 2.1 million

Goodwill = purchase price - fair price

=5.35 - 3.25 = 2.1 million $