The correct answer is: A. a-1, b-2, c-3, d-4
A statement of changes in working capital is a financial statement that shows how a company’s working capital has changed over a period of time. It is prepared by comparing the company’s balance sheets at the beginning and end of the period. The statement shows the changes in the company’s current assets and current liabilities.
A cash flow statement is a financial statement that shows how a company’s cash has changed over a period of time. It is prepared by comparing the company’s cash balance at the beginning and end of the period. The statement shows the sources and uses of cash during the period.
Deferred tax is a tax that a company has not yet paid. It arises when a company has a temporary difference between its taxable income and its accounting income. A temporary difference is a difference between the carrying amount of an asset or liability and its tax base.
Fixed assets are assets that a company expects to use for more than one year. They include land, buildings, equipment, and machinery.
Impairment loss is a loss that a company recognizes when the carrying amount of an asset is greater than its fair value. Fair value is the price that an asset would sell for in an arm’s-length transaction.
A balance sheet is a financial statement that shows a company’s assets, liabilities, and equity at a particular point in time. It is prepared by listing the company’s assets on the left-hand side and its liabilities and equity on the right-hand side. The assets must equal the liabilities and equity.
Here is a brief explanation of each option:
- Option A: a-1, b-2, c-3, d-4. This is the correct answer. A statement of changes in working capital is a financial statement that shows how a company’s working capital has changed over a period of time. It is prepared by comparing the company’s balance sheets at the beginning and end of the period. The statement shows the changes in the company’s current assets and current liabilities. A cash flow statement is a financial statement that shows how a company’s cash has changed over a period of time. It is prepared by comparing the company’s cash balance at the beginning and end of the period. The statement shows the sources and uses of cash during the period. Deferred tax is a tax that a company has not yet paid. It arises when a company has a temporary difference between its taxable income and its accounting income. A temporary difference is a difference between the carrying amount of an asset or liability and its tax base. Fixed assets are assets that a company expects to use for more than one year. They include land, buildings, equipment, and machinery. Impairment loss is a loss that a company recognizes when the carrying amount of an asset is greater than its fair value. Fair value is the price that an asset would sell for in an arm’s-length transaction.
- Option B: a-3, b-4, c-2, d-1. This is incorrect. A statement of changes in working capital is not a funds flow statement. A funds flow statement is a financial statement that shows how a company’s funds have changed over a period of time. It is prepared by comparing the company’s balance sheets at the beginning and end of the period. The statement shows the sources and uses of funds during the period.
- Option C: a-3, b-4, c-1, d-2. This is incorrect. A statement of changes in working capital is not a balance sheet. A balance sheet is a financial statement that shows a company’s assets, liabilities, and equity at a particular point in time. It is prepared by listing the company’s assets on the left-hand side and its liabilities and equity on the right-hand side. The assets must equal the liabilities and equity.
- Option D: a-4, b-3, c-1, d-2. This is incorrect. A statement of changes in working capital is not a cash flow statement. A cash flow statement is a financial statement that shows how a company’s cash has changed over a period of time. It is prepared by comparing the company’s cash balance at the beginning and end of the period. The statement shows the sources and uses of cash during the period.