6 marksFinancial Statement Analysis and Interpretation

CAPE Accounting Unit 1 · 2018 · Paper 2 · Question 1(a)(ii)

Explain each of the specified limitations of financial statements: - Use of accounting policies [3 marks] - Use of estimates and aggregation [3 marks]

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Other parts of this question

1(a)(i)Outline the MAIN objective of 'general purpose financial reporting' in accordance with the IASB Framework.[2 marks]
1(b)(i)Distinguish between 'accrual basis accounting' and 'cash basis accounting'.[4 marks]
1(b)(ii)Identify TWO reasons why an organization would opt to use 'accrual basis accounting' over 'cash basis accounting'.[2 marks]
1(c)Prepare the journal entries to record the 2017 transactions for Stephens Ltd.[12 marks]
1(d)(i)Describe how the introduction of an integrated computerized accounting system will impact the company in terms of recording information.[3 marks]
1(d)(ii)Describe how the introduction of an integrated computerized accounting system will impact the company in terms of access to records.[3 marks]
1(d)(iii)Describe how the introduction of an integrated computerized accounting system will impact the company in terms of independent internal verification.[3 marks]

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