Explanation

IAS (International Accounting Standards):

• These are older accounting standards that were issued before IFRS.
• Still valid unless replaced by IFRS.

IFRS (International Financial Reporting Standards):

• Issued by the IASB (International Accounting Standards Board).
• Modern framework used globally for preparing financial statements.

ISA (International Standards on Auditing):

• These are used by auditors, not for preparing financial statements but for auditing them.

Explanation

Explanation

Statement of financial position or balance sheet is the expanded accounting equation

Explanation

Inherent risk is the risk posed by an error or omission in a financial statement due to a factor other than a failure of internal control.

Explanation

Audit Risk is the combination of the following 3 risks:

1. Control Risk

2. Detection Risk

3. Inherent Risk

Explanation

Depreciation helps to tie the cost of an asset with the benefit of its use over time.

In other words, each year, the asset is put to use and generates revenue, the incremental expense associated with using up the asset is also recorded.

Depreciation arises due to physical wear and tear of the asset.

Explanation

Stock Investments are not stockholders' equity accounts.

Explanation

Financial accounting is the process by which an organization's revenue, receivables and expenses are collected, measured, recorded and finally reported into a financial statement.

Explanation

Companies are called legal persons because they can enter into a separate contract, or they can possess properties in their own name, sue and get sued by the other parties, etc. 

Explanation

The term "Management Accounting" was first used in 1950.

The concept of management accounting was introduced by James H. Bliss.