tutorial q answers exam stuff to know Flashcards by n k

Q

Why is accounting called the “language of business”?

A

It communicates financial info to stakeholders.
Helps with planning, decision-making, and performance evaluation.

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Q

How does accounting help decision-making

A

Before trading: Budgeting, business planning.
During operation: Cost control, profit tracking.
Closing down: Selling assets, paying liabilities, final reporting.

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Q

Why Annual Reports are detailed

A

Legal requirement for transparency.
Inform investors about financial health, risks, and strategy.

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Q

Would financial reporting exist without regulation?

A

Maybe, but it would be inconsistent, unreliable.
Standardisation (like AASB) ensures trust and comparability.

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