Step 2

Question 1

Step 2

Answer 1

Here are the simplified smart notes:

STEP 02: Determine Elements of Financial Statements

• Identify specific components of the financial statements that are relevant to the users.
• Examples of elements:
  
  • Assets: PPE, Inventory, Intangibles
  • Liabilities: Borrowings
  • Equity: Net assets
  • Revenues and expenses: Revenue, Gross profit, Expenses