31. Who are the internal users of accounting information? 32. Name any two external users of accounting information. 33. State the nature of information required by the following a) Investors b) Long Term Lenders c) Management d) Researchers 34. Which qualitative characteristic of accounting information requires the common units and common format of reporting? 35. Accounting information should be verifiable and free from bias. Which qualitative characteristic of accounting information denoted by this statement. 38. What is meant by cost accounting? 39. What is meant by management accounting? 40. Meena is owner of a restaurant. She paid her son’s fees from her personal bank account Rs.20,000. Whether this constitute her business transaction ? Give reason.
Answers
Answer:
31.(Ans)Internal users are people within a business organization who use financial information. Examples of internal users are owners, managers, and employees.
32.(Ans)Typically called financial accounting, the record of a business’ financial history for use by external entities is used for many purposes. The external users of accounting information fall into six groups; each has different interests in the company and wants answers to unique questions.
33.(Ans) a)Financial information like dividend declared , profit of the business , creditors outstanding
accounting ratios like EPS ratio , debt equity ratio , solvency ratio .
b)Accounting information required by the long term lenders are repaying capacity of the business, profitability, liquidity, operational efficiency, potential growth of business, etc.
c)The nature Of management. Management is a set of activities (including planning and decision making, organizing, leading, and controlling) directed at an organization's resources (human, financial, physical, and information) with the aim of achieving organizational goals in an efficient and effective manner.
d)It identifies key characteristics and attributes of a product or service through individual interviews or group discussions (qualitative research) and it analyzes these attributes by statistical analysis of answers given in a structured set of questions such as a survey or questionnaire (quantitative research).
34.(Ans)'Comparability' characteristic of accounting information requires the use of common units and common format of reporting. It is the most important quality of accounting information. Comparability means accounting information of a current year can be comparable with that of the previous years.
35.(Ans)The qualitative characteristic of accounting information denoted by this statement is reliability.
38.(Ans)Cost accounting is a form of managerial accounting that aims to capture a company's total cost of production by assessing the variable costs of each step of production as well as fixed costs, such as a lease expense.
39.(Ans)The provision of financial data and advice to a company for use in the organization and development of its business.
40.(Ans)No... spending for personal use is known as drawings.. and drawings can never be termed as business transactions
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