FAC1502 ASSIGNMENT 1 | LATEST QUESTIONS AND ANSWERS FOR SEM 1 | 2024

FAC1502 ASSIGNMENT 1 | LATEST QUESTIONS AND ANSWERS FOR SEM 1 | 2024 ACCOUNTING Correct Answer Planning; Recording; Analyzing; Interpreting financial information. PLANNING DECISIONS Correct Answer Financial information is used to determine future actions. Historical information provided by the accounting process serves as a basis for forecasting. CONTROL Correct Answer Using financial information to evaluate the results of financial activities. THE FUNCTION OF ACCOUNTING Correct Answer 1. The value added to the networth of a person/entity during a particular period. 2. The accumulated networth of that person/entity PROFIT ENTITIES Correct Answer Sole traders; Partnerships; Close Corporations; Companies NON-PROFIT ENTITES Correct Answer Clubs; Charitable Organisations; Churches; Educational Institutions; Trusts PUBLIC SECTOR Correct Answer The Government; Provinces; Departments; Boards and Commissions; Municipalities USERS OF FINANCIAL INFORMATION Correct Answer 1. Investors - Providers of capital. Concerned with the risk involved in their investment. Need information to decide whether to invest, hold, or withdraw funds. 2. Employees - Interested in entity's stability and profitability for benefits and job security. 3. Lenders - Use financial information to determine if loans can be paid back with interest. 4. Suppliers and other trade creditors - Use informations for assurance that amounts owed are paid on time. 5. Customers - Need to know the state of the entity for reliability. 6. Government and their agencies - Use financial information for taxation, policies, and statistical purposes. 7. Public - Entities often contribute to the local economy by employing people and local structures: STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Correct Answer Financial results -- Financial Performance (financial period) --- Financial Position STATEMENT OF CHANGES IN EQUITY Correct Answer Reflects the profit or total comprehensive income and reflects the capital or equity. STATEMENT OF FINANCIAL POSITION Correct Answer Reflects the networth of the entity at a specific time. Determined in terms of assets and interests. Affected by the entity's economic resources, structure, liquidity, solvency, capacity to adapt to economic changes. STATEMENT OF CASH FLOWS Correct Answer The ability to generate cash will determine whether the entity will be able to meet its economic comittments. DOMAINS OF ACCOUNTING Correct Answer 1. Financial accounting: External users - Creditors; Clients; Banking institutions. 2. Management accounting: Internal users - Management; Personnel ACCOUNTING PRINCIPLES Correct Answer The techniques used in the practice of accounting. Conceptual and Theoretical. ACCOUNTING POLICY Correct Answer A set of decisions abut how the entity will handle the same type of transaction in order to achieve consistency. INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) Correct Answer A general framework and accounting concepts; pricinciples; methods and procedures. ACCOUNTING STANDARDS AND STATEMENTS Correct Answer Aim to encourage widespread use of particular standards to eliminate bad alternatives. GOING CONCERN ASSUMPTION Correct Answer assumes an entity will remain in operation for the foreseeable future. QUALITIVE CHARACTERISTICS OF FINANCIAL STATEMENTS Correct Answer Attributes that make the information provided in financial statements useful. Relevance; Faithful Presentation; Comparibility; Verifiability; Timeliness; Understandability ELEMENTS OF FNANCIAL STATEMENTS Correct Answer Financial Position - Assets; Liabilities; Equity; Financial Performance - Income; Expenses