Introduction to Accounting

Question 1

Financial Accounting

Answer 1

Reporting of past information outside the organisation.

Question 2

Objective of the financial reporting

Answer 2

Useful to existing and potential investors, creditors and lenders to in making decisions to provide resources to the entity.

Answer 3

a) buying, selling or holding equity and debt instruments.
b) providing or settling loans of other forms of credit.
c) or existing rights to vote on, or otherwise influence, management’s actions that affect the use of entity’s economic resource.

Question 4

Three key statements

Answer 4

1) Statement of Financial position
2) Statement of Profit or Loss
3) Statement of Cash Flows

Question 5

Statement of Financial Position

Answer 5

This represents Financial position of an entity at a given point in the time.

Question 6

Statement of Profit or Loss

Answer 6

Entity’s financial performance is measured and reported.

Question 7

Statement of Cash Flows

Answer 7

Performance, the financial stability
and the investment potential of the entities.

Question 8

Management accounting

Answer 8

Meets the accounting needs for the managers

Question 9

Financial accounting

Answer 9

Seeks to meet the needs of owners and lenders.