CCT1002 – Introduction to Financial Accounting UWI Open Campus ACCT 1002 INTRODUCTION TO FINANCIAL ACCOUNTING Worksheet 1 Tutorial Worksheet # 1 Accounting and the Business Environment 1. The primary objective of financial reporting is to provide information useful for making investment and lending decisions. To be useful, financial information must possess certain characteristics. State these characteristics and discuss each.
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ACCT1002 – Introduction to Financial Accounting
UWI Open Campus
ACCT 1002
INTRODUCTION TO
FINANCIAL ACCOUNTING
Worksheet 1 Tutorial Worksheet # 1
Accounting and the Business
Environment
1. The primary objective of financial reporting is to provide information useful for
making investment and lending decisions. To be useful, financial information must
possess certain characteristics. State these characteristics and discuss each.
2. Accountants often refer to GAAP. What does the acronym GAAP means and why is
it important in accounting?
3. What does the acronym FASB represent and what role does it play in financial
accounting?
4. Suppose you are the sole owner of a bicycle sales and repair shop for many years.
Which business type would best protect your personal assets from product liability
exposure and why.
5. Suppose you and a friend developed a new technology for home computer systems.
However, you both need to raise a large amount of capital to build the production
and support facilities to market the product successfully. Explain which of the
business type would be best suited to help the company raise the necessary capital
to begin production.
6. Bill Rogers has three different businesses. He has only one bank account for
transactions relating to all of his various businesses. Which of the concepts or
principles of accounting is Bill violating and why?
7. Tate Corporation purchased a building for its grocery store for $30,000 in 1970.
Based on inflation estimates, the amount of this asset has been adjusted in the
accounting records. The building is now reported at $75,000. Which of the following
concepts or principles of accounting is being violated and why?
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