ACCA Applied Knowledge · Financial Accounting · Stakeholders' needs
Which one of the following statements about the time orientation and scope of information is correct?
Financial statements are mainly historic and report on the entity as a whole, whereas management information can be forward-looking and analysed by department, product or activity to support planning and control decisions within the business.
- AFinancial statements are mainly forward-looking and report on individual departments, while management information is historic and covers the whole entity
- BFinancial statements are mainly historic and report on the entity as a whole, while management information may be forward-looking and cover individual departments or productsCorrect
- CBoth financial statements and management information are always historic and entity-wide
- DBoth financial statements and management information are always forward-looking and departmental
Explanation
General purpose financial statements report past transactions for the whole reporting entity. Management information can be historic or forecast and is often split by product, department or activity. Option A reverses these characteristics.
Did you get it right without looking?
One question tells you little. A timed set on Stakeholders' needs shows your real accuracy, how long you take and where you lose marks.
More Stakeholders' needs questions
- Which of the following is a reason why published financial statements are unlikely to meet all the information needs of a company's senior m…
- Carlton Co's financial statements for the year show revenue of $800,000, profit from operations of $120,000, finance costs of $20,000 and to…
- Which statement about the external auditor's report on a company's financial statements is correct?
- Which of the following best describes a key difference between management accounts and published financial statements prepared under IFRS?
- Which of the following is a limitation of general purpose financial reports, as recognised by the IFRS Conceptual Framework?
- Which of the following statements about the respective responsibilities of directors and auditors is correct?