Accounting Atrill Chapter 1 Answers

In: Business and Management

Submitted By ilrahustreb
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Solutions Manual to accompany

ACCOUNTING: an introduction

Compiled by D. Harvey and M. Jenner

Chapter 1 - Introduction to Accounting and Finance

Suggested Solutions

Discussion Questions
1.1 The AASB Framework suggests the report users need to be both competent and diligent. Therefore, it is not assumed that financial reports will be readily read and understood by the lay readers, but rather that the readers will be proficient in accounting and finance (aptitude and application).

1.2 Basically comprised of:

a) Transactions – buy; sell; borrow; lend b) Transformations – convert raw materials via labour and overhead to finished goods c) Other economic events – natural disasters (flood; fire); economic events (recession; inflation); regulation (exchange rate restrictions; import restrictions; banned substances).

This relates to usefully repacking the financial data:

a) Classify b) Summarise c) Record

Financial reports

a) Statement of Comprehensive Income (Financial Performance) b) Statement of Cash Flows c) Statement of Financial Position

1.3 Planning is concerned with providing direction for future activity.

Control can be defined as compelling events to conform to the plan.

1.4 The organisations’ mission represents its primary goal or purpose, where it is headed in the longer term. This may be expressed in terms of the range of products or services, the quality and reputation of those products or services, the market share and so on.

Long-term plans represent the strategies to be adopted in the quest to achieve its mission. These will include such things as staff appointments and training,…...

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