FAC1501 UNIT 1: THE NATURE AND PURPOSE OF FINANCIAL ACCOUNTING QUESTIONS WITH 100% CORRECT ANSWERS

FAC1501 UNIT 1: THE NATURE AND PURPOSE OF FINANCIAL ACCOUNTING QUESTIONS WITH 100% CORRECT ANSWERS transaction - ANSWERS An action where money is paid and, in return, an item or service, that the buyer needs is obtained. financial accounting - ANSWERS Is the orderly and systematic identification and recording of the monetary values of financial transactions of an individual or business entity, and the reporting of the results objective of financial accounting - ANSWERS To enable the users of financial information to ascertain readily what the financial results and financial position of the entity is. nature of financial accounting - ANSWERS to identify events that are evidence of economic activity relevant to the particular entity to record the monetary value of economic events so as to provide a permanent history of the financial activities of the entity, to communicate the recorded information to interested users. steps in the financial accounting cycle - ANSWERS Transactions source documents journals general ledger and subsidiary ledgers trial balances final accounts and financial statements bookkeeping - ANSWERS the systematic recording of transactions IFRSs - ANSWERS International Financial Reporting Standards categories of users of financial accounting information - ANSWERS Clients Employees Government Investors Lenders Suppliers and other creditors Management reasons why management need financial accounting information - ANSWERS Information to be used for decisions directed at planning, that is determining future actions to be taken, or exercising control, that is evaluating the current situation and take corrective steps objective of financial statements - ANSWERS to provide information about the financial position, performance and changes in the financial position of an entity that is useful to a wide range of users in making economic decisions