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1. Financial statements are the major means of communicating accounting information to internal and external...

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Accounting

1. Financial statements are the major means of communicating accounting information to internal and external users.

2. Bookkeeping and accounting are one and the same because the bookkeeping function includes the accounting process.

3. The Financial Accounting Standards Board is a part of the International Accounting Standards Board.

4. IFRS follows one measurement principle known as the historical cost principle.

5. The economic entity assumption requires that the activities of an entity be kept separate and distinct from the activities of its owner and all other economic entities.

6. Owners' claims to total business assets take precedence over the claims of creditors because owners invest assets in the business and are liable for losses.

7. The principal source of equity is amounts paid in by shareholders.

8. The purchase of office equipment on credit increases total assets and total liabilities.

9. The ending retained earnings balance is reported on the statement of financial position.

Required: State whether each statement above is TRUE or FALSE. (9 marks)

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