FAC1502 EXAM PACK 2025{DETAILED QUESTIONS AND ANSWERS}

FAC1502 EXAM PACK 2025{DETAILED QUESTIONS AND ANSWERS} Unit of Measurement - ANSWER Financial transactions recorded in a common unit like currency. Forms of Ownership - ANSWER Different structures through which businesses can be owned. Fields of Accounting - ANSWER Various branches like financial and management accounting. Decision-Making - ANSWER Using financial information to make informed choices. Users of Financial Information - ANSWER Individuals or entities relying on financial reports for decisions. Accounting Policy - ANSWER Specific rules governing accounting practices. Conceptual Framework for Financial Reporting - ANSWER Guidelines for preparing financial statements. Financial Information - ANSWER Data used in financial decision-making. Key Concepts - ANSWER Fundamental ideas in accounting like financial information and ownership forms. Financial Accounting Cycle - ANSWER Continuous process of measuring, classifying, summarizing, and recording business transactions Accounting Reports - ANSWER Documents containing information to answer financial questions Financial Accounting - ANSWER Systematic recording of entity's financial transactions for easy retrieval Accounting Process - ANSWER Functions as an information system, includes financial accounting cycle Entity - ANSWER Business or organization involved in economic activities Transactions - ANSWER Proceedings or activities recorded in accounting as monetary values Bookkeeping Process - ANSWER Recording transactions, part of financial accounting cycle Financial Decisions - ANSWER Made based on results reported in financial statements Financial Reports - ANSWER Documents presenting financial information to interested parties Accounting Records - ANSWER Used to capture essential data of transactions for an entity Financial Data - ANSWER Information used for analysis and decision-making in accounting Specialized Message - ANSWER Financial information conveyed to users through accounting Financial Communication - ANSWER Conveying financial information to interested parties Financial Information Users - ANSWER Recipients of financial data conveyed through accounting Financial Information Value - ANSWER Dependent on the understanding of users, adds value when comprehended Accounting Concepts - ANSWER Principles and procedures used to convey financial information Accounting Knowledge - ANSWER Understanding financial terms, figures, and principles Financial Resources - ANSWER Limited assets that must be managed efficiently through planning Trading Activities - ANSWER Increased over centuries, leading to stronger competition and lower profits for traders. Lucas Pacioli - ANSWER Italian mathematician who published the first description of double entry accounting in 1494. Double Entry - ANSWER Principle on which modern accounting is based, described by Lucas Pacioli. Computerized Accounting - ANSWER Increasingly used for processing transactions quickly, while principles remain the same. SA GAAP - ANSWER South African accounting standards harmonized with IFRS in 1995. IFRS for SMEs - ANSWER Scaled-down version of complete IFRS for small and medium-sized entities. Financial Reporting Standards Council - ANSWER Governs recording and reporting of financial information in South Africa. Accounting Definition - ANSWER Systematic identification and recording of financial transactions for decision-making. Service Entities - ANSWER Provide services for a fee, examples include transport, repairs, and personal services. Trading Entities - ANSWER Specialize in buying and selling merchandise, examples include florists and grocers. Government agencies - ANSWER Regulate enterprises, compile statistics, determine resource allocation Investors - ANSWER Assess risk and expected return on investment Lenders - ANSWER Assess ability to pay interest and repay loans Suppliers - ANSWER Assess ability to pay owed amounts Management - ANSWER Use for planning or control purposes Public - ANSWER Requires economic contribution, work opportunities, taxes info Stewardship concept - ANSWER Ensures efficient resource use, manifested in governance Internal users - ANSWER Include management and employees External users - ANSWER Include investors, creditors, and government Consistency - ANSWER Acting the same way in a particular situation. Disclosure - ANSWER Revealing accounting policy decisions in financial statements. IFRS - ANSWER International standards preventing chaos in financial reporting.