ExpertEasy2 marksMultiple Choice
ACCA · Question 28 · Preparing Basic Financial Statements
Which TWO of the following items are presented within the Equity section of a limited company's Statement of Financial Position?
Which TWO of the following items are presented within the Equity section of a limited company's Statement of Financial Position?
Answer options:
A.
Share premium account
B.
Bank overdraft
C.
Revaluation surplus
D.
Debentures (Loan notes)
How to approach this question
Identify which items represent the owners' interest in the business (capital and reserves) versus external debt.
Full Answer
The Equity section of a Statement of Financial Position includes Share Capital, Share Premium, Retained Earnings, and other reserves such as the Revaluation Surplus. Bank overdrafts are current liabilities, and debentures are non-current liabilities.
Common mistakes
Confusing long-term debt (debentures) with equity.
Practice the full ACCA FA — Financial Accounting Practice Exam 4
65 questions · hints · full answers · grading
More questions from this exam
Q01Global Water Initiative, an international NGO, receives a restricted grant of $500,000 specifical...MediumQ02MetroGrid Water, a public utility company, is preparing its annual financial statements. Which of...EasyQ03EuroTrade Logistics operates across multiple European borders. Which TWO of the following are pri...MediumQ04CloudSync Inc, a tech startup, is developing a new proprietary algorithm. The directors want to c...MediumQ05GreenHarvest Farms changes its depreciation method for tractors from straight-line to reducing ba...Medium