1) What attributes should financial statements have?

2. What are the three elements of the statement of financial position and how are they
listed on the statement of financial position?

3. What is the guideline to determine whether a statement of financial position item is
current or noncurrent?

4. Differentiate total comprehensive income from net income.

5. How important are the statement of cash flows and notes to financial statements to
users?

1) Financial statements must be relevant and accurate in order for it to influence the decision of its users and not mislead them. Such financial statements must also be complete, free from error and without bias in order for it to be faithfully presented. Such attribute makes it more believable as to the financial health of the company who owns the FS.

2) The three elements are as follows:

a. Assets - This element represents what the company owns. It mostly are composed of properties or things that the company has control over and is likely to get inflows out from it. It is presented first on your financial position since it is to be noted that Assets=Liabilities plus Equity and such arrangement is used for it. It has a normal debit balance. Increase for such account is in the debit side, and decrease for a credit transaction.

b. Liabilities - This element represents what the company owes. This includes your loans, accounts payable and other obligations that the company must satisfy for its repayment. Such element is presented after your assets. It has a normal credit balance - a credit is an increase for it and a debit transaction decreases it.

c. Equity - This element consists the owner's capital and drawings for sole proprietors and stocks and retained earnings for corporations. This determines the claims of the owners from the company's assets. It is presented after your liabilities and has a normal credit balance.

3) Current items include those that has a 1 year or less term or a normal operating sycle of a company. An excess of it would directly make it a non-current item. Example of such current items in assets are your inventories and supplies which will be uses current and can be consumed immediately whereas properties like lands and buildings are non current ones since it can still be existing for future periods or longer periods. Current liabilities are those that will be paid in the short term and others with long term maturities are considered non-current.

4) Basically, the difference of the two is that the comprehensive income includes both the net income and other comprehensive income that wont be reported under your profit/loss.  Other comprehensive income includes your unrealized gain or losses on certain investments. Transactions that fall directly to your net income are those that are primarily in the normal course of business may it be a sale of inventories and other normal transactions being executed by the company. 

5) Statements of cash flows are important since it determines your ending balance for the year of your cash which will be presented under the balance sheet. It is also used to track what are the things that the company has acquired since it discloses the movement of your cash as to any acquisition or other disposals that would have impact to your balance sheet like a sale or purchase of properties, payments of loans and what have you.

On the other hand, Notes to FS is important since it is a detailed discussion on what certain line items on your financial statements are composed of. Take note that some companies have a lot of transactions or customers- so they tend to lump their receivables in to one line item. The notes therefore would disclose how much is related to customers, to affiliates etc. It discloses also the other matters that the company has experienced like other matters where Covid related problems have affected the financial statements and earnings of the company. This is to let the readers more understand the statements.