ACCT10002: Introductory Financial Accounting (Solutions)

This subject focuses on the nature of accounting from the perspective of a preparer of financial reports in order to understand financial reporting from a user perspective. The method of recording and reporting transactions in an accounting system to ultimately provide the foundation for judgements and decisions in preparation of financial reports will be covered. The importance of accounting within the Australian external reporting environment is explained as well as adherence to the Conceptual Framework for accounting that provides a theoretical underpinning of accounting standards and reporting. Choices within accounting standards and the implications for financial reports are explored. This subject also covers an overview of analytical methods used in assessment of the performance and financial standing of a company.

✔ On successful completion of this subject, students should be able to:

• identify the principal regulatory authorities that influence the framework for external financial reporting in Australia and explain their roles and functions in this process;
• describe the nature and objectives of General Purpose Financial Reporting;
• explain the key components of the Conceptual Framework for accounting as it applies to the preparation of general purpose financial statements;
• record accounting transactions and prepare the Trial Balance, Balance Sheet and the Income Statement;
• explain the main issues to be considered in relation to reporting of key transactions and balances reported in the Balance Sheet and Income Statement;
• describe the nature of company transactions and account for various capital transactions and profit distribution;
• describe the policy choices available to preparers and the flexibility that preparers have in applying the accounting standards;
• identify limitations in financial reporting;
• construct and analyse a Cash Flow Statement;
• apply analytical methods to assess a firm's performance and financial position in comparison with past performance and with other firms;
• identify an ethical dilemma and explain an ethical outcome; 
• explain the purpose of a firm's sustainability report.