ACCY130 || QUESTIONS WITH COMPLETE
SOLUTIONS!!
stakeholder correct answers group/individual who can affect/is affected by the achievement
of an organ's objectives
Role of accounting correct answers - help stakeholders make informed dec
- hold powerful people accountable for their dec
Accountability correct answers duty to procide an account of those actions which an organ is
deemed to be responsible
Qualitative Characteristics of Accounting Information correct answers - relevance: has
predictive or confirmatory value
- reliability: free from error/bias
- comparability
- verifiability: same result derived using similar methods
- understandability
- timlesssness: time to apply info to dec making
WHY record accy info correct answers - legal requirements
- powerful stakeholder demands
- response to crisi
- u/s motivation for disclosures
- increase profits
- manager's perceived responsibilities
WHAT accy info getting collected correct answers - use stakeholder engagement
- depends on who
- priorities and compromise bewt info and stakeholder demands
- consider qualitative features (relelvant and reliable)
Full Accountability vs Proper Accountability correct answers Full: req all stakeholders to
have ability to hold powerful ppl to account fot impacts of their operations
Proper: req manangers to be responsive to legitimate concerns of stakeholders (receivers of
accounts)
Role of accountant correct answers determine what info most appropriate to enable
stakeholder to make infromed dec
For-profit entities correct answers primary objective is to provide g/s to make a profit and
maximise shareholder wealth
- revenue generally from sales
- cap assets acquired and held to deliver g/s with intention of earning a return
- fin perf driven by revenues and expenses
Public benefit entities correct answers primary objective is to provide g/s for
community/social benefit and where equity has been provided to support that objective rather
than fin return
, - service perf reporting (what g/s provided to achieve comm/social benefit obj)
- wider group of stakeholders
- revenue from contribution rather than sales (e.g. donations/tax)
- cap assets acquired and held w/out intention of earning return on them
- fin perf driven by expenses
- users interested in non-fin info
Entity correct answers something w/ a distinct, separate existence
Limited liability company correct answers separate legal entity independent of its owners and
run by a board of directors
sources of cap correct answers - investing own money/ finding investors/ funding sources
from govt/ charaties commission/ membership payments
- bank loan/ other lending sources
Characteristics considered when reporting entity correct answers - separation of mgmt from
owners
- size of entity
- public accountability
NZ External Reporting Board (XRB) correct answers preps and issues accy standards used in
NZ and assurance standards used by auditors
GAAP (Generally Accepted Accounting Principles) correct answers The standards and rules
that accountants follow while recording and reporting financial activities.
Legislative Environment correct answers regulating laws
- 'enforcers'/'watchdogs: govt agencies/organ whose role is to enforce laws and ensure ethical
standards
- auditors: req by The Companies Act
- FInancial Reporting Act(FRA) 2013: establishes what compliance with GAAP means and
what GPFRs must be prep
Reporting Boundary correct answers reflection of how far responsibilities of an organ has
been extendes in terms of stakeholder it owes and accountability of aspects of its perf (affects
nature of accounts produced)
Entity concept correct answers only record transactions/info/events affecting fin perf/position
of organ and organ seen separate from owner
Accounting period convention correct answers only record info in a fin year(accounting
period)
monetary unit convention correct answers only recognises transactions/events if related
monetary value can be assigned to those transactions/events
going concern correct answers financial statements are prepared with the expectation that a
business will remain in operation indefinitely
SOLUTIONS!!
stakeholder correct answers group/individual who can affect/is affected by the achievement
of an organ's objectives
Role of accounting correct answers - help stakeholders make informed dec
- hold powerful people accountable for their dec
Accountability correct answers duty to procide an account of those actions which an organ is
deemed to be responsible
Qualitative Characteristics of Accounting Information correct answers - relevance: has
predictive or confirmatory value
- reliability: free from error/bias
- comparability
- verifiability: same result derived using similar methods
- understandability
- timlesssness: time to apply info to dec making
WHY record accy info correct answers - legal requirements
- powerful stakeholder demands
- response to crisi
- u/s motivation for disclosures
- increase profits
- manager's perceived responsibilities
WHAT accy info getting collected correct answers - use stakeholder engagement
- depends on who
- priorities and compromise bewt info and stakeholder demands
- consider qualitative features (relelvant and reliable)
Full Accountability vs Proper Accountability correct answers Full: req all stakeholders to
have ability to hold powerful ppl to account fot impacts of their operations
Proper: req manangers to be responsive to legitimate concerns of stakeholders (receivers of
accounts)
Role of accountant correct answers determine what info most appropriate to enable
stakeholder to make infromed dec
For-profit entities correct answers primary objective is to provide g/s to make a profit and
maximise shareholder wealth
- revenue generally from sales
- cap assets acquired and held to deliver g/s with intention of earning a return
- fin perf driven by revenues and expenses
Public benefit entities correct answers primary objective is to provide g/s for
community/social benefit and where equity has been provided to support that objective rather
than fin return
, - service perf reporting (what g/s provided to achieve comm/social benefit obj)
- wider group of stakeholders
- revenue from contribution rather than sales (e.g. donations/tax)
- cap assets acquired and held w/out intention of earning return on them
- fin perf driven by expenses
- users interested in non-fin info
Entity correct answers something w/ a distinct, separate existence
Limited liability company correct answers separate legal entity independent of its owners and
run by a board of directors
sources of cap correct answers - investing own money/ finding investors/ funding sources
from govt/ charaties commission/ membership payments
- bank loan/ other lending sources
Characteristics considered when reporting entity correct answers - separation of mgmt from
owners
- size of entity
- public accountability
NZ External Reporting Board (XRB) correct answers preps and issues accy standards used in
NZ and assurance standards used by auditors
GAAP (Generally Accepted Accounting Principles) correct answers The standards and rules
that accountants follow while recording and reporting financial activities.
Legislative Environment correct answers regulating laws
- 'enforcers'/'watchdogs: govt agencies/organ whose role is to enforce laws and ensure ethical
standards
- auditors: req by The Companies Act
- FInancial Reporting Act(FRA) 2013: establishes what compliance with GAAP means and
what GPFRs must be prep
Reporting Boundary correct answers reflection of how far responsibilities of an organ has
been extendes in terms of stakeholder it owes and accountability of aspects of its perf (affects
nature of accounts produced)
Entity concept correct answers only record transactions/info/events affecting fin perf/position
of organ and organ seen separate from owner
Accounting period convention correct answers only record info in a fin year(accounting
period)
monetary unit convention correct answers only recognises transactions/events if related
monetary value can be assigned to those transactions/events
going concern correct answers financial statements are prepared with the expectation that a
business will remain in operation indefinitely
