9706 · 3.1.1
The Purpose of Financial Statements for Different Businesses flashcards
Revision flashcards for Cambridge 9706 The Purpose of Financial Statements for Different Businesses (syllabus 3.1.1). Flip, recall, then mark a real past-paper question.
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Stakeholder
Any person, group, or organisation with an interest in the activities and performance of a business, such as investors, employees, customers, and lenders.
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Statement of Financial Position
A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time. It shows what the company owns and owes.
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Statement of Profit or Loss
A financial statement that summarises the revenues, costs, and expenses incurred during a specific period, usually a fiscal quarter or year. It shows the financial performance of a company.
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Statement of Cash Flows
A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities.
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Limited Liability
A legal status where a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership.
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Statement of Changes in Equity
A financial statement that details the change in owners' equity over an accounting period by presenting the movement in reserves making up the shareholders' equity.
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Accrual Basis Accounting
An accounting method where revenue or expenses are recorded when a transaction occurs rather than when payment is received or made. It is used for the Statement of Profit or Loss.
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IFRS
International Financial Reporting Standards. A set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.