FAC 1601 FINAL PAPER EXAM QUESTIONS ACCURATE ANSWERS FULL SOLUTION
Question:
International Financial Reporting Standards.
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.
Question:
Profit Company.
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].
Question:
Purpose of Conceptual Framework.
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.
Question:
Objective of General Purpose Financial Reporting.
Answer:
, To provide financial information about a reporting entity to its existing and potential investors,
lenders and other creditors.
Question:
Financial Statements.
Answer:
A specific form of financial reporting. They portray information about assets, liabilities, equity,
income, and expenses. Based on Accrual Method of accounting.
Question:
Accrual Basis Accounting.
Answer:
reporting income when it is earned and expenses when they are incurred
Question:
Qualitative Characteristics of Useful Financial Information.
Answer:
Question:
Fundamental Qualitative Characteristics.
Answer:
a) Relevance: Materiality b) Faithful representation
Question:
Enhancing Qualitative Characteristics.
Answer:
Question:
International Financial Reporting Standards.
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.
Question:
Profit Company.
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].
Question:
Purpose of Conceptual Framework.
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.
Question:
Objective of General Purpose Financial Reporting.
Answer:
, To provide financial information about a reporting entity to its existing and potential investors,
lenders and other creditors.
Question:
Financial Statements.
Answer:
A specific form of financial reporting. They portray information about assets, liabilities, equity,
income, and expenses. Based on Accrual Method of accounting.
Question:
Accrual Basis Accounting.
Answer:
reporting income when it is earned and expenses when they are incurred
Question:
Qualitative Characteristics of Useful Financial Information.
Answer:
Question:
Fundamental Qualitative Characteristics.
Answer:
a) Relevance: Materiality b) Faithful representation
Question:
Enhancing Qualitative Characteristics.
Answer:
