Question

What information needs to be prominently displayed for each statement of financial position and statement of profit or loss?

Answer 1

The prominently displayed information for each statement of financial position includes assets, liabilities, and shareholders' equity. The prominently displayed information for each statement of profit or loss includes revenue, expenses, and net income.

Step-by-step explanation:

In each statement of financial position (also known as a balance sheet), the following information needs to be prominently displayed:

1. Assets: This includes all the resources owned by the business, such as cash, inventory, and property.
2. Liabilities: This includes all the debts and obligations of the business, such as loans and accounts payable.
3. Shareholders' Equity: This represents the owners' claim on the assets of the business.

In each statement of profit or loss (also known as an income statement), the following information needs to be prominently displayed:

1. Revenue: This includes all the income generated by the business, such as sales revenue.
2. Expenses: This includes all the costs incurred by the business in order to generate revenue.
3. Net Income: This represents the difference between revenue and expenses, and reflects the profitability of the business.