Course: Analysis of Financial Statements

Q: Answer the following questions:

1. What are the main elements of financial statements? Describe any two? 2. What is the purpose of making financial statements? 3. An entity may choose between the use of the accrual basis of accounting and the cash basis. Comment. 4. In the income statement which expenses are recorded? What do you mean by capital expenditures? 5. The nature of revenue expenditure and capital expenditure is same? Yes or no? Explain with example? 6. Describe the accounting principles use to record and recognize revenues in the income statement?