Aftab Automobiles Limited
1. Name & Sector of the Accounting Entity
The name of the accounting entity is “Aftab Automobiles Limited” and it is an engineering sector.
2. Fiscal Year of the entity. What is the difference between fiscal year and calendar year?
Fiscal year of the entity is September 1, 2006 to August 31, 2007.
Fiscal year: An accounting period that is one year in length is referred to as a fiscal year. A fiscal year usually begins with the first day of a month and ends twelve months later on the last day of a month.
Calendar year: The accounting period used by most businesses coincides with the calendar year that is January 1 to December 31.
3. Names of the financial statements prepared by the entity.
Names of the financial statements are:
? Consolidated balance sheet
? Profit & loss and appropriation account
? Cash flow statement
? Statement of changes in shareholders’ equity
? Unit wise balance sheet
4. Number of years reported on each financial statement. If multiple years are reported on, what you think is the rationale thereof?
Number of years reported on each financial statement: 2 years
If multiple years are reported on, we can compare ratios and condition of the entity whether it is improved or deteriorated. To see the condition of the entity, multiple years are reported on.
5. Format of the Income Statement & Balance sheet:
Income Statement:
Sales
Cost of goods sold
Gross profit
Expens ...