Financial statements are prepared for a range of different business entities.

1. Identify the different entities financial statements can be prepared for.

2. Identify the different financial statements and explain the type of information contained within each of the financial statements.

3. Explain the purpose of accounting information and how this purpose is linked to the needs of stakeholders involved with different entities.

Accounting information is guided by various principles, assumptions and qualitative characteristics.

1. Describe the process of generating accounting information.

2. dentify and describe the assumptions, qualitative characteristics and framework which guide the preparation of accounting information.

3. Explain why accountants have flexibility in accounting choices.

4. Explain how the assumptions and qualitative characteristics of accounting guide the choice of the following accounting methods.

- Revenue recognition

- Accounting for bad debts