FAC1601 - Financial Accounting &
ReportingIFRS Questions and
Answers Answers-International Financial
Reporting Standards
.International Financial Reporting Standards - Answers-A set of rules developed to make sure that financial
statements are prepared consistently for companies so that users can compare the financial results and
performance from the current year to prior years to the same company. Additionally, making it possible for
users to compare the financial position and performance of one company with another.
.Profit Company - Answers-A company that is incorporated for the purpose of financial gain for its
shareholders. Include: state-owned companies (SOC Ltd), private companies [(Pty) Ltd], personal liability
companies [Inc], and public companies [Ltd].
.Purpose of Conceptual Framework - Answers-a) assist the IASB in developing IFRS that is consistent concepts
b) aid the prepares of financial statements to develop consistent accounting policies in the absence of a
standard.
c) assist all parties to understand and interpret IFRS.
.Objective of General Purpose Financial Reporting - Answers-To provide financial information about a reporting
entity to its existing and potential investors , lenders and other creditors.
.Financial Statements - Answers-A specific form of financial reporting. They portray information about assets,
liabilities, equity, income, and expenses. Based on Accrual Method of accounting.
.Accrual Basis Accounting - Answers-reporting income when it is earned and expenses when they are incurred
ReportingIFRS Questions and
Answers Answers-International Financial
Reporting Standards
.International Financial Reporting Standards - Answers-A set of rules developed to make sure that financial
statements are prepared consistently for companies so that users can compare the financial results and
performance from the current year to prior years to the same company. Additionally, making it possible for
users to compare the financial position and performance of one company with another.
.Profit Company - Answers-A company that is incorporated for the purpose of financial gain for its
shareholders. Include: state-owned companies (SOC Ltd), private companies [(Pty) Ltd], personal liability
companies [Inc], and public companies [Ltd].
.Purpose of Conceptual Framework - Answers-a) assist the IASB in developing IFRS that is consistent concepts
b) aid the prepares of financial statements to develop consistent accounting policies in the absence of a
standard.
c) assist all parties to understand and interpret IFRS.
.Objective of General Purpose Financial Reporting - Answers-To provide financial information about a reporting
entity to its existing and potential investors , lenders and other creditors.
.Financial Statements - Answers-A specific form of financial reporting. They portray information about assets,
liabilities, equity, income, and expenses. Based on Accrual Method of accounting.
.Accrual Basis Accounting - Answers-reporting income when it is earned and expenses when they are incurred
