FAC1601 - Financial Accounting &
Reporting
IFRS - correct answer-International Financial Reporting Standards
International Financial Reporting Standards - correct answer-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 - correct answer-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 - correct answer-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 - correct answer-To provide financial
information about a reporting entity to its existing and potential investors , lenders and other
creditors.
Financial Statements - correct answer-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 - correct answer-reporting income when it is earned and expenses
when they are incurred
Qualitative Characteristics of Useful Financial Information - correct answer-
Fundamental Qualitative Characteristics - correct answer-a) Relevance : Materiality
b) Faithful representation
Enhancing Qualitative Characteristics - correct answer-a) Comparability
b) Verifiability
c) Timeliness
d) Understand-ability
The Statement of Financial Position - correct answer-Contains information about the assets,
liabilities and equity.
Reporting
IFRS - correct answer-International Financial Reporting Standards
International Financial Reporting Standards - correct answer-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 - correct answer-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 - correct answer-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 - correct answer-To provide financial
information about a reporting entity to its existing and potential investors , lenders and other
creditors.
Financial Statements - correct answer-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 - correct answer-reporting income when it is earned and expenses
when they are incurred
Qualitative Characteristics of Useful Financial Information - correct answer-
Fundamental Qualitative Characteristics - correct answer-a) Relevance : Materiality
b) Faithful representation
Enhancing Qualitative Characteristics - correct answer-a) Comparability
b) Verifiability
c) Timeliness
d) Understand-ability
The Statement of Financial Position - correct answer-Contains information about the assets,
liabilities and equity.
