Podcast
Questions and Answers
What do accounting principles determine?
What do accounting principles determine?
- Where the business entity should be located
- Which assets and liabilities are recorded on a statement of financial position (correct)
- What products a company should sell
- How many employees a company should have
How are the business accounts prepared?
How are the business accounts prepared?
- As though the business is not separate from its owner
- As though the business is an entity separate from its owner (correct)
- Only including the personal activities of its owners
- Combined with the personal activities of its owners
In accounting, how are sole traders regarded despite not being legally separate from their owners?
In accounting, how are sole traders regarded despite not being legally separate from their owners?
- As part of the personal activities of the owners
- As tax-exempt entities
- As entities with unlimited liability
- As separate entities for accounting purposes (correct)
What type of legal entity is a limited company according to the text?
What type of legal entity is a limited company according to the text?
What activities does financial accounting information relate to according to the text?
What activities does financial accounting information relate to according to the text?
What can a company do in its own right according to the text?
What can a company do in its own right according to the text?
Which characteristic ensures that financial information is complete, neutral, and free from error?
Which characteristic ensures that financial information is complete, neutral, and free from error?
What characteristic enables users to compare the financial statements of different entities to evaluate their relative financial performance and position?
What characteristic enables users to compare the financial statements of different entities to evaluate their relative financial performance and position?
If financial information is not capable of being verified, what should be provided to users?
If financial information is not capable of being verified, what should be provided to users?
What does timeliness of information influence?
What does timeliness of information influence?
What does understandability depend on?
What does understandability depend on?
What quality seeks to ensure that where there is uncertainty, profits and assets are not overstated while losses and liabilities are not understated?
What quality seeks to ensure that where there is uncertainty, profits and assets are not overstated while losses and liabilities are not understated?
What does an entity need to find when there is a conflict between relevance and reliability?
What does an entity need to find when there is a conflict between relevance and reliability?
What is a trade-off usually appropriate when there is a conflict between relevance and reliability?
What is a trade-off usually appropriate when there is a conflict between relevance and reliability?
What provides assurance to users regarding the credibility and reliability of financial information?
What provides assurance to users regarding the credibility and reliability of financial information?
What should preparers disclose in financial statements according to the text?
What should preparers disclose in financial statements according to the text?
Which characteristic enables users to identify trends in an entity's financial position and performance over time?
Which characteristic enables users to identify trends in an entity's financial position and performance over time?
What must information be without in order to be faithfully presented?
What must information be without in order to be faithfully presented?
What is the purpose of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs)?
What is the purpose of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs)?
Why do many countries permit or require companies to use International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) instead of local accounting standards?
Why do many countries permit or require companies to use International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) instead of local accounting standards?
Why do sole traders and partnerships tend to apply the principles of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs)?
Why do sole traders and partnerships tend to apply the principles of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs)?
In what circumstances should financial statements be prepared on a going concern basis?
In what circumstances should financial statements be prepared on a going concern basis?
What is an essential part of the preparation of final accounts when items cannot be measured precisely?
What is an essential part of the preparation of final accounts when items cannot be measured precisely?
What does an accounting policy specify?
What does an accounting policy specify?
What determines whether an entity should select a particular accounting policy?
What determines whether an entity should select a particular accounting policy?
What is meant by 'Relevance' in the Conceptual Framework for Financial Reporting?
What is meant by 'Relevance' in the Conceptual Framework for Financial Reporting?
What is meant by 'Fair Presentation' according to IAS 1?
What is meant by 'Fair Presentation' according to IAS 1?
'Fair Presentation' can be achieved by:
'Fair Presentation' can be achieved by:
What are some possible measurement bases for assets according to the text?
What are some possible measurement bases for assets according to the text?
Why do limited company financial statements need to be fairly presented according to certain countries' laws?
Why do limited company financial statements need to be fairly presented according to certain countries' laws?
What does the historical cost accounting system entail?
What does the historical cost accounting system entail?
What does the going concern assumption imply?
What does the going concern assumption imply?
What is the concept of accruals in accounting?
What is the concept of accruals in accounting?
What does consistency in accounting prevent?
What does consistency in accounting prevent?
What does prudence in accounting underpin?
What does prudence in accounting underpin?
Why are accounting standards needed?
Why are accounting standards needed?
How does materiality affect financial statements?
How does materiality affect financial statements?
'Accruals' in accounting require that:
'Accruals' in accounting require that:
What does 'prudence' suggest about losses?
What does 'prudence' suggest about losses?
Why do financial statements need to be prepared on a going concern basis?
Why do financial statements need to be prepared on a going concern basis?
