Accounting documents and systems Flashcards
1
Q
According to the Conceptual Framework, information about the nature and amounts of an entity’s economic resources and claims can help users to assess which THREE of the following?
A
- The entity’s liquidity and solvency
- The entity’s need for additional financing; and
- How successful the entity is likely to be in obtaining that financing
2
Q
Which are source documents that are recorded in an entity’s accounting records
A
- Credit note to a customer
- Bank transaction report
- Invoice from a supplier/ customer
- Petty cash book
3
Q
What are the two fundamental characteristics?
A
- Revelance: materiality, confirmatory and predictive value. predicting future events
- Faithful representation: neutral, free from error, complete
Financial information MUST BE BOTH
4
Q
What are the four enhancing characteristics?
A
- Verfiability
- Timeliness
- Understandability
- Comparability
5
Q
What three things should financial statements do?
A
- Provide info about financial position, performance and cash flows that is useful to a wide range of users in making economic decisions
- Show results of management’s stewardship
- Assist users to predict the entity’s future cash flows: timing and certainty in particular
6
Q
What info do users need access to, which is provided through financial statements?
A
- economic resources it controls
- claims to an entity’s resource (liabilities)
- how efficiently and effectively management have discharged their responsbilities (results of management’s stewardship of the resources entrusted to it)
7
Q
What are the fundamental principles of the IESBA Code of Ethics
A
- Integrity
- Objectivity
- Confidentiality
- Professional competence and due care
- Professional behaviour
8
Q
Total Payroll cost?
Gross pay?
A
PAYE + Employees NI + Employees pension + Net pay + Employer’s NI + Employers pension
PAYE + Employees NI + Empolyees pension + Net pay
