BSNS115 FINANCIAL EXAM QUESTIONS AND VERIFIED
ANSWERS WITH COMPLETE SOLUTIONS
four main financial statements: The statement of cash flows
- shows the sources and uses of cash for a period
four main financial statements:
The statement of comprehensive income
- commonly referred to as the income statement, sometimes called the profit and loss
statement; measures and reports how much profit has been generated in a period
four main financial statements:
The statement of changes in equity
sometimes referred to as the statement of changes in owners' equity; shows all changes
in owners' interest in the net assets from transactions during the period
four main financial statements:
The statement of financial position
commonly referred to as the balance sheet; shows the assets of a business and the
claims on those assets
Cost accounting
relates to the determination and accumulation of product, process or service costs
Auditing
- An audit is a review by an independent third party. Public accounting firms and
individual Chartered Accountants (CAs) provide auditing services and issue an
independent auditor's report.
,- The audit report states whether the financial statements are prepared in conformity
with NZ International Accounting Standards (NZ IAS) and the Financial Reporting Act.
An auditor's report can be unqualified or qualified.
Internal auditors
are professional accountants who perform functions much like those of an external
auditor. However, internal auditors are employed in industry rather than public
accounting, and often their functions are more specific and detailed.
Not-for-profit entities
e.g., schools, hospitals, and religious organisations
Governmental units
e.g., local, regional, and national levels
Tax practitioners
- deal with Income Tax laws. They also deal with the I.R.D. They often develop
specialties in the taxation of individuals, partnerships, companies, trusts and estates, or
international tax law issues.
Entity
- "A person, partnership, company or other organisation for which financial statements
are prepared"
- operates within relevant legislation
- level of reporting depends on legislation and the size of the business
- separation of personal/business events and records
Accounting entity concept
, - Accounting entity refers to the fact that the financial affairs of a business are seperate
and distinct form the financial affairs of its owners
- all businesses are seperate accounting entities form their owners
Legal Entity Concept
- legal entity is the term commonly used when a business is seperate for the people
who own, control and manage it.
- company type of business has seperate legal entity
- it has the ability to enter in contracts with external (buy, sell, borrow, lend, pay taxes,
sue, be sued)
- does not dissolve when ownership changes
Types of Business Ownership
- The way in which the accounting records are reported will depend on the type of
ownership
- The basic types of business structure are
- Sole Trader
- Partnership
- Company
Features of Sole Traders
- No seperate legal entity
- limited life
- minimum reporting regulations
- limited access to funds
- low establishment costs
ANSWERS WITH COMPLETE SOLUTIONS
four main financial statements: The statement of cash flows
- shows the sources and uses of cash for a period
four main financial statements:
The statement of comprehensive income
- commonly referred to as the income statement, sometimes called the profit and loss
statement; measures and reports how much profit has been generated in a period
four main financial statements:
The statement of changes in equity
sometimes referred to as the statement of changes in owners' equity; shows all changes
in owners' interest in the net assets from transactions during the period
four main financial statements:
The statement of financial position
commonly referred to as the balance sheet; shows the assets of a business and the
claims on those assets
Cost accounting
relates to the determination and accumulation of product, process or service costs
Auditing
- An audit is a review by an independent third party. Public accounting firms and
individual Chartered Accountants (CAs) provide auditing services and issue an
independent auditor's report.
,- The audit report states whether the financial statements are prepared in conformity
with NZ International Accounting Standards (NZ IAS) and the Financial Reporting Act.
An auditor's report can be unqualified or qualified.
Internal auditors
are professional accountants who perform functions much like those of an external
auditor. However, internal auditors are employed in industry rather than public
accounting, and often their functions are more specific and detailed.
Not-for-profit entities
e.g., schools, hospitals, and religious organisations
Governmental units
e.g., local, regional, and national levels
Tax practitioners
- deal with Income Tax laws. They also deal with the I.R.D. They often develop
specialties in the taxation of individuals, partnerships, companies, trusts and estates, or
international tax law issues.
Entity
- "A person, partnership, company or other organisation for which financial statements
are prepared"
- operates within relevant legislation
- level of reporting depends on legislation and the size of the business
- separation of personal/business events and records
Accounting entity concept
, - Accounting entity refers to the fact that the financial affairs of a business are seperate
and distinct form the financial affairs of its owners
- all businesses are seperate accounting entities form their owners
Legal Entity Concept
- legal entity is the term commonly used when a business is seperate for the people
who own, control and manage it.
- company type of business has seperate legal entity
- it has the ability to enter in contracts with external (buy, sell, borrow, lend, pay taxes,
sue, be sued)
- does not dissolve when ownership changes
Types of Business Ownership
- The way in which the accounting records are reported will depend on the type of
ownership
- The basic types of business structure are
- Sole Trader
- Partnership
- Company
Features of Sole Traders
- No seperate legal entity
- limited life
- minimum reporting regulations
- limited access to funds
- low establishment costs
