FAC1601- Correct answers 2024
IFRS - Correct Answer-International Financial Reporting Standards
International Financial Reporting Standards - Correct 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.
Profit Company - Correct 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].
Purpose of Conceptual Framework - Correct 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.
Objective of General Purpose Financial Reporting - Correct Answer-To provide financial
information about a reporting entity to its existing and potential investors , lenders and
other creditors.
Financial Statements - Correct Answer-A specific form of financial reporting. They
portray information about assets, liabilities, equity, income, and expenses. Based on
Accrual Method of accounting.
Accrual Basis Accounting - Correct Answer-reporting income when it is earned and
expenses when they are incurred
Qualitative Characteristics of Useful Financial Information - Correct Answer-
Fundamental Qualitative Characteristics - Correct Answer-a) Relevance : Materiality
b) Faithful representation
Enhancing Qualitative Characteristics - Correct Answer-a) Comparability
b) Verifiability
c) Timeliness
d) Understand-ability
The Statement of Financial Position - Correct Answer-Contains information about the
assets, liabilities and equity.
The Statement of Profit or Loss and Other Comprehensive Income - Correct Answer-
Contains information about income and expenses
IFRS - Correct Answer-International Financial Reporting Standards
International Financial Reporting Standards - Correct 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.
Profit Company - Correct 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].
Purpose of Conceptual Framework - Correct 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.
Objective of General Purpose Financial Reporting - Correct Answer-To provide financial
information about a reporting entity to its existing and potential investors , lenders and
other creditors.
Financial Statements - Correct Answer-A specific form of financial reporting. They
portray information about assets, liabilities, equity, income, and expenses. Based on
Accrual Method of accounting.
Accrual Basis Accounting - Correct Answer-reporting income when it is earned and
expenses when they are incurred
Qualitative Characteristics of Useful Financial Information - Correct Answer-
Fundamental Qualitative Characteristics - Correct Answer-a) Relevance : Materiality
b) Faithful representation
Enhancing Qualitative Characteristics - Correct Answer-a) Comparability
b) Verifiability
c) Timeliness
d) Understand-ability
The Statement of Financial Position - Correct Answer-Contains information about the
assets, liabilities and equity.
The Statement of Profit or Loss and Other Comprehensive Income - Correct Answer-
Contains information about income and expenses
