ACCA - F7 QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS 2024

ACCA - F7 QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS 2024 What are the Pros and Cons of a reporting framework? - Correct Answer *Pros* Avoids "patchwork" approach Avoids criticism of political & external pressure Standards can be focused where needed (SOPL, SOFP) *Cons* -Reporting has multiple users/industries etc. One framework may not fit all cases -Different Standards may be needed -Actual implementation of a framework may still be difficult What are some sources of GAAP? - Correct Answer National Company Law National Accounting Standards Local Stock Exchange requirements IAS's + IFRSs *GAAP is not mandatory* *GAAP is not defined* What are the objectives of financial reporting? - Correct Answer Financial Position Financial Performance Changes in Financial Performance What are some QUALITATIVE characteristics of FS? - Correct Answer *Fundamental* Relevant Material Faithful -Accurate -Un-biased -Complete *Enhancing" Comparable -Consistent (eg y-to-y) -Disclosure of accounting practices Verifiable Timely Understandable -User's knowledge What requirements are necessary for an item to be included in the FS? - Correct Answer Probable = cost/benefit will flow from/to the company