The extent to which an entity funds its operations through debt or equity is regarded as highly significant only by particular users of financial statements such as regulators and tax authorities.Select one:TrueFalse

According to the Conceptual Framework, the financial performance of an entity relates to: a. Changes in the entity’s economic resources and claims other than by obtaining additional resources directly from investors and creditors. b. Changes in the entity’s economic resources and claims resulting from issuing debt or equity instruments. c. The entity’s assets and liabilities at the end of the period. d. Changes in the entity’s cash and cash equivalents.

The purpose of a financial statement that lists an entity's total capital/liabilities is to show:Question 3Answera.The amount of the entity could be sold for in liquidationb.The amount of the entity could be sold as a going concernc.The financial performance of the entity over a period of timed.The financial position of the entity at a particular moment in time

Since there are so many different types of external users, an entity has to produce many, many different types of financial statements suited specifically to each of their information needs. Question 4 Answer True False

What is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity?

Distinguish between equity and debt finance.