Podcast
Questions and Answers
Who are examples of stakeholders interested in financial accounting information?
Who are examples of stakeholders interested in financial accounting information?
- Banks, employees, and competitors
- Suppliers, employees, and business owners
- Stockholders, customers, and competitors
- Stockholders, suppliers, and government agencies (correct)
What governs financial accountancy?
What governs financial accountancy?
- International trade agreements
- Both local and international accounting standards (correct)
- Local tax regulations only
- Business management principles
What is the purpose of financial accountancy?
What is the purpose of financial accountancy?
- To negotiate with suppliers and banks
- To manage internal business operations
- To summarize, analyze, and report financial transactions (correct)
- To market the business to potential investors
What does GAAP stand for?
What does GAAP stand for?
What are International Financial Reporting Standards (IFRS)?
What are International Financial Reporting Standards (IFRS)?
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Study Notes
Stakeholders in Financial Accounting
- Investors: Want to know about financial performance and position to make informed decisions
- Creditors: Interested in a company's ability to pay debts
- Management: Use financial accounting information to make strategic decisions
- Regulatory bodies: Monitor financial health and compliance
- Employees: Interested in company's financial stability and job security
Framework of Financial Accountancy
- Governed by Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS)
Purpose of Financial Accountancy
- Provide accurate financial information to stakeholders for decision-making
- Enable comparison between companies and industries
- Facilitate transparency and accountability
Accounting Standards
- GAAP: Generally Accepted Accounting Principles
- IFRS: International Financial Reporting Standards, used in many countries to ensure consistency and comparability
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