Higher Accounting - The Role of the Financial Accountant

Which of the following is NOT an objective of financial accounting?

• To ensure that the preparation of financial statements complies with the law (Companies Act) and accounting standards

• To create a historical record of the financial affairs of a business

• To produce business plans, forecasts and budgeting information

• To provide information to the management of a business organisation for decision making purposes

Which THREE of the following are duties of a financial accountant?

• Perform ratio analysis to compare current performance of the business with past performance or performance of similar businesses

• Check financial records to maintain accuracy and reduce fraud

• To liaise with management to prepare cash budgets

• Prepare accounts for auditing and publication as and when required

Financial accounting is historical and deals with operations which have already occured.

• True

• False

Financial accountants are concerned with collecting and analysing costs and revenues of current and future activities in order to aid decision-making

• True

• False

Which of the following documents would a financial accountant NOT prepare?

• Income Statement

• Cash Budget

• Statement of Financial Position

Which of the following is NOT a problem associated with financial accounting information?

• It deals with historic records - things which have already occured and you cannot change what has already happened

• The information provided is concerned with the whole firm - it does not provide detailed information on individual business areas

• Ensures the business complies with law (Companies Act) and standards (laid out by professional accounting bodies)

When preparing financial statements, the accounts must reflect a "true and fair" view of the business activities.

Financial information is only useful if it is.... (select three options)

• Relevant

• Unreliable

• Understandable

• Comparable

Which of the following accounting concepts matches this definition:

Companies should use the same accounting methods to record similar transactions over time

• Going Concern

• Matching Concept

• Consistency

• Prudence

Which of the following accounting concepts matches this definition:

Accountants should not recognise an asset at a value higher than expected or a liability below what is expected in future

• Going Concern

• Matching Concept

• Consistency

• Prudence

Which of the following accounting concepts matches this definition:

Expenses incurred by an organisation must be charged to the Income Statement in the year "matching" the year in which those expenses occured

• Going Concern

• Matching Concept

• Consistency

• Prudence