The Accountant in Business

Define the term 'bookkeeping'. (2 marks)

Define the term 'accounting'. (2 marks)

State what is meant by a 'true and fair view' in the context of financial statements. (2 marks)

State the role of a purchase ledger clerk within the accounting function. (2 marks)

State THREE responsibilities of a bookkeeper. (3 marks)

Harbourview Ltd is a growing manufacturing business. The directors are considering appointing a management accountant for the first time. State FOUR examples of activities that would typically be carried out by a management accountant at Harbourview Ltd. (4 marks)

Westfield Garden Supplies has recently expanded and is considering recruiting both a bookkeeper and an accountant. Explain the difference between the role of the bookkeeper and the role of the accountant. (4 marks)

Explain the role of an auditor in relation to the published financial statements of a limited company. (4 marks)

Distinguish between the roles of the directors and the auditors in the preparation of the published accounts of a limited company. (4 marks)

Explain why it is important that an auditor is independent from the company whose accounts they are auditing. (4 marks)

Explain why financial accounting is compulsory for limited companies, whereas management accounting is not. (4 marks)

Explain TWO limitations of published financial statements for a potential investor making an investment decision. (4 marks)

Riverdale plc is a publicly listed manufacturing company. A potential investor is considering purchasing shares in Riverdale plc and has obtained a copy of the company's most recent annual report. Explain the usefulness of the published financial statements to this potential investor. (6 marks)

Moorfield Engineering Ltd has grown significantly and its board is considering appointing both a financial accountant and a management accountant. Explain the difference between the role of the financial accountant and the role of the management accountant. (6 marks)

Explain the role of the accountant in developing and overseeing an accounting information system to provide reliable and relevant information for both financial and management purposes. (6 marks)

Explain why it is important for an accounting information system to provide information that is both reliable and relevant for the users of that information. (6 marks)

Sunridge plc is a large public limited company operating in the retail sector. A potential investor is considering purchasing shares. Assess the impact of the limitations of published financial statements on the ability of a potential investor to make an informed investment decision. (8 marks)

Evaluate the potential effects on the shareholders of a public limited company if its auditors were not truly independent. (10 marks)