ACCA Financial Reporting 2019 (F7) Exam Study Guide Solutions
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Course
ACCA
Institution
ACCA
ACCA Financial Reporting 2019 (F7) Exam
Study Guide Solutions
Income - ANSWERIncome is increases in economic benefits during the accounting period in the form
of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other
than those relating to contri...
IAS 1 requires compliance with a number of accounting concepts - ANSWER✔✔1. Going concern
2. Accrual basis of accounting
3. Materiality and aggregation
4. Offsetting
5. Frequency of reporting
6. Comparative information
Going concern - ANSWER✔✔When an entity's financial statements are prepared in accordance with
international financial reporting standards, the presumption is that the entity is a going concern, ie it will
not cease to trade in the immediate future.
Accrual basis of accounting - ANSWER✔✔Financial statements, except for cash flows information, are
prepared under the accruals concept, ie income and expenses are matched to the same accounting
period.
Materiality and aggregation - ANSWER✔✔Each material class of similar items is to be presented
separately in the financial statements, eg the classification of assets as non-current and current
Offsetting - ANSWER✔✔Generally is not permitted to set off assets and liabilities, or income and
expense against each other in order to show a net figure, eg cash at bank is not netted off against a bank
overdraft
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