1. Which groups of people are most likely to be interested in the financial statements of a sole trader?

1. Shareholders of the company
2. The businesss bank manager
3. The tax authorities
4. Financial analysts

A. i) and ii) only

B. ii) and iii) only

C. ii), iii) and iv) only

D. i), ii) and iii) only

2. Which of the following statements about accounting concepts is/are correct?

1. Companies should never change the presentation or classification of items in their financial statements, even if there is a significant change in the nature of operations.
2. Information in financial statements should be presented so as to be understood by users with a reasonable knowledge of business and accounting.
3. Companies should create large provisions in times of company growth so that they can be utilised in more difficult times to keep profits the same.

A. i) and ii)

B. ii) and iii)

C. i) only

D. ii) only