To prepare for the exam on 27/08, I will review some necessary knowledge everyday. By summarising the knowledge and the structure of the question for each chapter, I believe that we will pass the examination successfully. And today we will start with the Chapter 1&2: The context and purpose of Financial Reporting.
1. Financial reporting: Is recording, summarizing, reporting and analyzing the Fiancial data into the Book of Prime entry --> Ledger account --> Trial balance --> Financial statement.
2. Business: The main aim is making profit. There are 3 type of business:
- Sole trader
- Partnership
- Limited liability
( Learn the advantages and disadvantages in the text book b/c the question will ask)
3. The users of Financial statement:
- Internal:
+ Manager: making decision
+ Employee: to deal salary
- Connected:
+ Shareholder: deciding to invest
+ Banker: to make loan
+ Customer/ supplier: extend credit or not
+ Competitor: to compete
- External:
+ Government & tax agency: to collect tax
+ Public
+ Financial analysts and advisors.
4.IFRS foundation will oversee the IASB. The IASB establishes the IFRS.
5. The IFRS advisory council is the body connects with the outside word and is overseed by IFRS foundation.
6. The IFRIC is controlled by IFRS foundation.
7. Asset = Liability + Equity
8. Equity = net asset
9. Income = Profit + Capital introduced - Drawings
1. Financial reporting: Is recording, summarizing, reporting and analyzing the Fiancial data into the Book of Prime entry --> Ledger account --> Trial balance --> Financial statement.
2. Business: The main aim is making profit. There are 3 type of business:
- Sole trader
- Partnership
- Limited liability
( Learn the advantages and disadvantages in the text book b/c the question will ask)
3. The users of Financial statement:
- Internal:
+ Manager: making decision
+ Employee: to deal salary
- Connected:
+ Shareholder: deciding to invest
+ Banker: to make loan
+ Customer/ supplier: extend credit or not
+ Competitor: to compete
- External:
+ Government & tax agency: to collect tax
+ Public
+ Financial analysts and advisors.
4.IFRS foundation will oversee the IASB. The IASB establishes the IFRS.
5. The IFRS advisory council is the body connects with the outside word and is overseed by IFRS foundation.
6. The IFRIC is controlled by IFRS foundation.
7. Asset = Liability + Equity
8. Equity = net asset
9. Income = Profit + Capital introduced - Drawings
