Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 31

Following are a number of the key terms and concepts introduced in the chapter, along with a list of corresponding definitions. Match the appropriate letter for the key term or concept to each definition provided (items 1–8). Note that not all key terms and concepts will be used.

a. Explanatory notes to financial statements	h. Prospectus
b. Five-year summary	i. Purchase accounting
c. Significant accounting policies	j. Corporate governance
d. Stock option plan	k. Contingencies and commitments
e. Accounting change	l. Business segment
f. Business combination	m. Management’s statement of responsibility
g. Proxy

_____An integral part of the financial statements that contains explanations of accounting policies and descriptions of financial statement details.

Step 1 of 2

Financial statements

These are the basic elements of financial reporting. These are the set of books that a company maintains in order to record its financial transactions. The financial statements when complete at the end of the period include the below-mentioned elements.

1. Statement of Income

2. Balance Sheet

3. Statement showing changes in equity of the shareholders.

4. Cash Flow Statement