Addendum to seminar activity 2.2

Question One

Answer the following in written form().Your answer must use correct sentence structure, spelling and grammar.The content of your answer must not be plagiarised (copied from any source).

You have already collected the following information from various sources. Discuss the usefulness of this information particularly in relation to the reliability, relevance, comparability, timeliness, verifiability and understandability criteria:

You receive detailed statements from the existing owner, signed off by that person's accountant. The statements provide profit figures and net cash flows related to the flats for the last 5 years. The accountant notes that in order to provide the statements quickly the figures for the current year are based on a number of approximations.

You are given the audited financial statementsof 3 other companies that specialise in the ownership and rental of flats. These are useful because they identify some of the costs involved in this sort of business activity, but because you have never studied the accounts of a company before you have difficulty interpreting many of the terms and figures that appear in the statements.

Question Two

Answer the following in written form.Your answer must use correct sentence structure, spelling and grammar.The content of your answer must not be plagiarised (copied from any source).

What is the purpose of an income statement for an entity?List typical items that you would see in the income statement for a logistics/freight company such as TT Line.