Qualitative questions Flashcards
Given that accounting information helps various user groups make informed decisions
based on their needs, explain the main differences between financial accounting and
management accounting?
Financial provides historical financial information to external users, such as investors and creditors, using standardized reports like the Income Statement and Balance Sheet, and follows external regulations like GAAP or IFRS. Management focuses on helping internal management make decisions by providing detailed, tailored reports that include both past and future data, without the need to adhere to external regulations.
What are some of the challenges
experienced by businesses in sustainability reporting compared to traditional financial
reporting practices.
Lack of standardized frameworks, difficulty in measuring qualitative data, inconsistent data collection, and evolving regulatory pressures. Additionally, integrating sustainability data with financial reporting and meeting stakeholder expectations can be complex, requiring companies to adapt and improve transparency in their disclosures.
Explain the nature and function of the three principle financial statements and four
characteristics of assets,
Income statement, balance sheet, cash slow statement. Assets, which are resources controlled by the company, must have future economic benefits, be measurable in monetary terms, and result from past transactions or events.
