The significance of financial reporting for a business organization

Q1. Discuss the significance of financial reporting for a business organization from the perspective of internal and external users of financial information. Identify the role of IASB and FASB in developing the “Conceptual Framework for Financial Reporting” in the establishment of compatible standards worldwide. (1.5 Marks) Answer: Q2. The following information has been extracted from the books of XYZ Corporation for the year ended 31st December, 2017: (2 Marks) Particulars Amount ($) Sales 455,000 Sales discounts 5,500 Sales returns and allowances 3,550 Cost of goods sold 190,000 Sales Salaries 4,500 Sales Commission 2,220 Travel expenses 6,200 Freight outward 7,200 Postage and stationery 3,200 Telephone expenses 5,210 Office salaries 5,800 Insurance expense 2,500 Depreciation of building 9,540 Dividend revenue 25,000 Gain on sale of investment 20,500 Interest on bonds 8,400 Income tax 45,800 You are required to prepare income statement for the year ended December 31st, 2017. Answer:   Q3. The following ledger account balances have been extracted from the books of ZBT Corporation as at 31st December, 2018: (1.5 Marks) Ledger Accounts Balances Amount ($) Cash 105,000 Travel and entertainment expenses 6,250 Insurance expenses 5,000 Account Receivable 90,000 Advertising supplies 31,250 Salaries expense 50,000 Rent expenses 11,250 Prepaid insurance 7,500 Office equipment 25,000 Dividends 6,250 Service revenue 135,000 Land and Building 27,500 Machinery 12,500 Unearned service revenue 23,750 Share capital-Ordinary 125,000 Notes Payable 62,500 Accounts payable 31,250