Exam 2: Types of Organisations and the Financial Reporting Framework

Torger Associates sold business services to another organisation for cash. As a result, Torger's assets increased. Which accounting term best describes the concept involved in the other part of this transaction?

The factors that should be considered before forming the partnership and company forms of entity would include:

Describe the role that the following organisations play in relation to Australian accounting standards:

The going concern assumption assumes that an entity will continue to operate successfully into the foreseeable future.

Limited liability is a feature of what form(s) of business organisation?

The political nature of standard setting refers to the fact that, for example, preparers may lobby the standard setters to promote their own self-interest rather than the decision-making usefulness of general purpose reports.

The primary purpose of an audit is to:

Due process is primarily concerned with producing Accounting Standards that meet managers' objectives.

A general-purpose financial report is primarily directed toward the common information needs of a wide range of users.

Which of the following types of business organisation has a legal identity separate from those of the owners?

The ability of a partner to enter into a contract on behalf of all partners is called:

Which of the following elements does not require recognition criteria in order to decide whether it should be recognised in the financial statements?

Which of the following is not an asset?

Outline the nature and purpose of general-purpose financial reports (GPFR).

Vanessa has undertaken a significant exploration program in outback Australia that led to the discovery of a large deposit of silver. Robust geological assessments indicate the ore body comprises no less than 1.25 million ounces of silver that can be readily and economically mined, refined and shipped. Required:

There are several differences between the financial statements of a company and those of a partnership, not least of which is the disclosure of taxation on the balance sheet as a liability. For a company, the disclosure is a single amount as it is the company that is liable and not the owners. For a partnership, the amount of taxation is split and reported separately in accordance with each partner's liability.

Describe three advantages of a company over a partnership and a sole trader.

Which one of the following groups is not generally regarded as an external user of the accounting information of an enterprise?

Mutual agency refers to the fact that each member of the partnership form of business entity can bind the other(s) in contract within the scope of normal operations.

Revenue means the gross inflows arising from normal operations plus all gains during the accounting period.