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Problem 1: Which of the following statements is FALSE in relation to the presentation of the income statement?
a. The income statement shows the profit or loss of the organisation.
b. The income statement can be presented in a variety of ways.
c. The income statement will show the financial position of an organisation at a particular point in time.
d. It is important that the title of the income statement clearly indicates the length of the accounting period to which it relates.
Problem 2: Which of the following items would NOT be recorded as an asset by an organisation?
a. Factory equipment
b. Key employees
c. Inventory
d. Shares held in another organisation
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T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
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