Financial statement do not consider _________________.assets expressed in monetary termsliabilities expressed in monetary termsonly assets expressed in non-monetary termsassets and liabilities expressed in non-monetary terms (2024)

FAQs

What do financial statements do not consider? ›

The primary focus of financial reporting is information about earnings and its components. Hence financial statement do not consider assets and liabilities expressed in non-monetary terms.

Trial balance is not part of financial statements.

Monetary assets include cash and cash equivalents, such as cash on hand, bank deposits, investment accounts, accounts receivable (AR), and notes receivable, all of which can readily be converted into a fixed or precisely determinable amount of money.

Some items, such as income tax and legal expenses, are commonly excluded because they are not related to production costs. Other items, such as dividends and amount written off, may be included or excluded depending on the company's accounting policies.

The audit report is not one of the four basic financial statements.

There are 8 limitations: Historical Costs, Inflation Adjustments, No Discussion on Non-Financial Issues, Bias, Fraudulent Practices, Specific Time Period Reports, Intangible Assets, and Comparability.

Expenses are not a part of a Company`s balance sheet.

The answer is (c) Interest revenue. Interest revenue is the company's earnings from interest. This is reported in the income statement, not in the balance sheet. Certificate of deposit, interest payable, and retained earnings appear on a balance sheet.

While dividends are often shown on the statement of changes in equity, they are not included on the balance sheet because they are not considered to be assets, liabilities, or equity. Instead, they are a distribution of earnings to shareholders and do not affect the company's financial position or performance.

Non-monetary assets are not readily converted into a fixed amount of money in the short term. They include property, plant, and equipment (PP&E), goodwill, patents, and copyrights.

What are the 4 financial statements include? ›

For-profit primary financial statements include the balance sheet, income statement, statement of cash flow, and statement of changes in equity.

The basic financial statements of an enterprise include the 1) balance sheet (or statement of financial position), 2) income statement, 3) cash flow statement, and 4) statement of changes in owners' equity or stockholders' equity.

Circular analysis. There is no method called circular analysis in financial statement analysis.