Internal users correct answers people inside and entity (managers, supervisors etc), internal users focus more on management accounting
External users correct answers People outside the entity who are still interested in info regarding the entity (employees, shareholders, suppliers, banks etc), ...
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Internal users correct answers people inside and entity (managers, supervisors etc), internal users
focus more on management accounting
External users correct answers People outside the entity who are still interested in info regarding
the entity (employees, shareholders, suppliers, banks etc), external users are more interested in
financial accounting
Shareholders correct answers Information to assess the future profitability of an entity, future
cash flows for dividends and the possibility of capital growth of investment
Banks correct answers Information to determine whether or not entity has ability to repay loan
Suppliers correct answers Information to determine entity's ability to repay debts associated with
purchases
Employees correct answers Information concerning job security, potential to pay awards and
bonuses, and promotional opportunities
Consumers correct answers Information regarding the continuity of the entity and its ability to
provide appropriate goods and services
Government authorities correct answers Information to determine amount of tax that should be
paid and any future taxation liabilities or taxation assets
Regulatory bodies correct answers Information to determine whether the entity is abiding by
regulations such as the corporations act
Community correct answers Information to determine whether the entity is contributing
positively to the general welfare and economic growth of local community
Special interest group correct answers Information to determine whether the entity has
considered environment, social and or industrial aspects during its operations
Financial accounting correct answers The preparation and presentation of financial info
(statements) for all types of users to enable them to make economic decisions regarding the
entity - cavers more towards external users
Management accounting correct answers Field of accounting that provides information for
internal users. It is reflected in financial accounting statements for external users - timesheets,
projections, budgets
Relationship between management and financial accounting correct answers Management
accounting will provide economic info for internal users that is reflected i the financial
statements for external users
, Although they cater to two different users, they are focused on two different aspects of the same
thing - accounting information systems
Regulations correct answers FA - lots of rules and regulations
MA - much less formal and without any prescribed rules
Timeliness correct answers FA - based on past information (often outdated by time distributed to
users)
MA - is based on past but mostly future information
Level of detail correct answers FA - lots of aggregated (adding lot of numbers together and just
present in it as one) numbers
MA - lots of numbers but also qualitative (non-numerical)
forms of business entities correct answers sole traders, partnerships, company, trusts (not tested)
deciding what type of business correct answers four different business structures differ in terms
of owner liability, equity structure, funding opportunities, decision making responsibilities (who
is responsible for day to day operations) and taxation (what is tax implication of each type
sole trader definition correct answers individual who controls and manages a business and is
solely liable for all the business debts
Sole trader features correct answers The business is not a separate legal entity (sole trader ship an
owner are one and the same)
Usually uses accounting software such as MYOB to prepare financial reports
Sole trader advantages correct answers Quick, inexpensive and easy to establish
inexpensive to wind down, disestablish
Not subject to company regulation - small operation so not a lot of rules, freedom which they can
operate under
Sole trader disadvantages correct answers Unlimited liability (amount of liability that the owner
owes is not limited to the amount they put into the business)
Limited life - business will cease to exist if the owner leaves, retires or dies
Owner and sole tradership are one and the me
Sole tradership has unlimited liability but limited life
Partnership definition correct answers An association between two or more persons who carry
out a business as partner and share profits or losses according to partnership agreement
Partnership features correct answers enables sharing of ideas, skills and resources and easy to
establish
Partnership advantages correct answers easy and simple to set up and an informal business
structure - not bound by accounting standards
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