Recording and Reporting 1

Question 1

what are the two types of accounting? (2)

Answer 1

• Recording financial information
• Reporting financial information

Question 2

what are the subsets of the types of accounting? (3)

Answer 2

• Book keeping
• Managment accounting (management accouting reports)
• Financial accounting (financial reporting)

Question 3

In finance, what is regulation? (1)

Answer 3

when authority prescribes how businesses mad do something

Question 4

Which part of the financial accounting system requires regulation?, and why? (2)

Answer 4

• preparation of financial statements
• otherwise external users couldn’t rely on them

Question 5

Who regulate the financial accounting standards? (1.5)

Answer 5

• IFRS
  – International Financial Reporting Standards

Question 6

who issue the IFRS? (2)

Answer 6

• accounting standards issued by the IFRS Foundation
• and International Accounting Standards Board (IASB)

Question 7

what are the IFRS and what do they do? (2)

Answer 7

• constitute a standardised way of describing the company’s financial performance and position
• so that company financial statements are understandable and comparable across international boundaries

Question 8

what is the use of regulation? (2)

Answer 8

• ensures businesses prepare statements that are comparable
• using principles and practices with which users of the financial statements are familiar

Question 9

what does regulation involve? (2)

Answer 9

• setting and
• enforcement of accounting standards

Question 10

give 5 examples of different financial reporting standards (5)

Answer 10

• IFRS
• IPSASB
• GRAP
• US GAAP
• FASB

Question 11

what is the recording proces from start to finish? (8)

Answer 11

• source documents
• prepare journal entry
• post the general ledger and balance
• extract a pre-closing trial balance
• prepare closing entries
• post the general ledger
• extract the general ledger
• prepare AFS

Question 12

what does a general ledger do? (1)

Answer 12

• represents the record-keeping system of a business’ financial data

Question 13

what questions should be asked when recording stransactions in the general ledger? (3)

Answer 13

• which elements of the accounting equation will be affected (assets, equity, liabilities)
• are the elements increasing or decreasing
• must the accounts be debited or credited

Question 14

what is a trial balance? (2)

Answer 14

• list of all the accounts in the general ledger
• and the closing balances at a point in time