Question 1c list four principal qualitative

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Question 1c: List four principal qualitative characteristics of financial statements - Understandability - Relevance - Reliability - Comparability Question 1d: Describe five basic elements of financial statements 1. Assets - There must be a future economic benefit. - The reporting entity must control the future economic benefits. - The transaction or other event giving rise to the reporting entity’s control over the future economic benefits must be occurred. 2. Liabilities - There must be a future disposition of economic benefits to other entities. - There must be a present obligation. - A past transaction or other event must have created the obligation. 3. Equity - The residual interest in the assets of the entity after deducting all its liabilities. - The difference between the value of the assets and liabilities. 4. Income - Increases in economic benefits during the accounting period in the form of inflows or enhancements NAPAT PUENGMUN S40050288
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of assets or decrease of liabilities that result in increase in equity, other than those relating to contributions from equity participants. 5. Expense - Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decrease in equity, other than those relating to distributions to equity participants. Question 2a: Which entities are required to prepare financial reports? - All disclosing entities - Public companies - Companies limited by guarantee (except small companies limited by guarantee) - All large proprietary companies - All registered schemes - Small proprietary companies that are foreign-controlled - Small proprietary companies or small companies limited by guarantee that ASIC directs to prepare financial reports - Small proprietary companies subject to the shareholder direction under s.293 of the Corporations Act - Small companies limited by guarantee subject to a shareholder direction under s.294a of the Corporations Act. Question 2b: What are the required components of the annual financial report? Document Section of the Corporations Act Statement of financial position as at the end of the year (if consolidated accounts are not required by Accounting Standards) 295(2) & 296(1) Statement of comprehensive income for the year (if consolidated accounts are not required by Accounting Standards) 295(2) & 296(1) Statement of cash flows for the year (if consolidated accounts are not required by Accounting Standards) 295(2) & 296(1) Statement of changes in equity (if consolidated accounts are not required by Accounting Standards) 295(2) & 296(1) Consolidated financial statements, if required by accounting standards, which may include parent entity financial information where [CO10/654] conditions are met 295(2) & 296(1) Notes to financial statements (disclosure required by the regulations, notes required by the accounting standards, and any other information necessary to give a true and fair view) 295(3) Directors’ declaration that the financial statements comply with accounting standards,
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