FAC1601 TEST Questions and Answers
Verified Solutions Latest Update
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:
a) Comparability b) Verifiability c) Timeliness d) Understand-ability
Question:
The Statement of Financial Position.
Answer:
Contains information about the assets, liabilities and equity.
Verified Solutions Latest Update
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:
a) Comparability b) Verifiability c) Timeliness d) Understand-ability
Question:
The Statement of Financial Position.
Answer:
Contains information about the assets, liabilities and equity.
