ACCA Applied Knowledge · Business and Technology · Financial information provided by business
Marlow plc's finance team prepares both annual financial statements and monthly cost reports. Which combination correctly describes the two?
Annual financial statements are legally required and standardised under frameworks such as IFRS, while monthly cost reports are voluntary internal documents tailored to management's needs. Management reports have no statutory format or audit requirement, so the reverse descriptions are incorrect.
- AAnnual statements: legally required and standardised; monthly reports: voluntary and tailored to management needsCorrect
- BAnnual statements: voluntary and tailored; monthly reports: legally required and audited
- CBoth are legally required and must follow IFRS
- DBoth are voluntary and prepared only for shareholders
Explanation
Company law requires annual financial statements in a standard framework such as IFRS. Monthly cost reports are internal, with no legal requirement, and their design depends on what managers need. The second option reverses the two.
Did you get it right without looking?
One question tells you little. A timed set on Financial information provided by business shows your real accuracy, how long you take and where you lose marks.
More Financial information provided by business questions
- At 1 January a company had equity of $500,000. During the year it made a profit after tax of $80,000, recognised a revaluation surplus of $3…
- Which statement best describes the scope of the information covered by financial accounting compared with management accounting?
- Kestrel Ltd's finance director is deciding how to present information to two audiences: the bank providing a loan, and the production manage…
- Zenith Ltd's finance director is reviewing two reports: (1) the published annual financial statements, and (2) a monthly report to the board…
- Which of the following is a feature of management accounting rather than financial accounting?
- A manager receives a report on monthly sales that is accurate and complete, but it arrives six weeks after the month end, by which time the …