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.