Q1TI - Horngren'S Financial And Managerial Accounting

Question

Match the different parts of the annual report with the appropriate description.

1..Includes the income statement, balance sheet, statement of stockholders’ equity, and statement of cash flows	a. Notes to financial statements
2. Attests to the fairness of the presentation of the financial statements.	b. Report of independent registered public accounting firm
3. Includes a summary of significant accounting policies and explanations of specific items on the financial statements.	c. Management’s discussion and analysis of financial condition and results of operations (MD&A)
4. Is written by the company to help investors understand the results of operations and the financial condition of the company.	d. Financial statements

Step-by-Step Solution

Answer

1. d
2. b
3. a
4. c

Step 1: Meaning of Financial Statement

A financial statement may be a formal record of interest in the operations and execution of a company's finances. To comply with GAAP in the United States, businesses frequently develop their financial statements on an accrual basis instead of a cash basis.

Step 2: Matching the different parts of the annual report with the appropriate description

S.no.	Annual Report	Appropriate description
1	Includes the income statement, balance sheet, statement of stockholders’ equity, and statement of cash flows	d. Financial statements
2	Attests to the fairness of the presentation of the financial statements.	b. Report of independent registered public accounting firm
3	Includes a summary of significant accounting policies and explanations of specific items on the financial statements.	a. Notes to financial statements
4	Is written by the company to help investors understand the results of operations and the financial condition of the company.	c. Management’s discussion and analysis of financial condition and results of operations (MD&A)