Reference no: EM132761296

Problem 1: What is the purpose of preparing financial statements?

a) To show the business performance of the business and its financial position
b) To indicate the profitability amount of a business
c) To record all transactions in the accounts
d) To ensure the directors and employees are being compensated

Problem 2: Which of the following statements is true about current asset?

a) An asset used to produce a product or service
b) Current asset consists of inventories, accounts payable and cash balance
c) Separate classification in the Statement of Profit of Loss
d) Expected to be realised in cash or sold within one year of business' operating cycle