1. Financial statements are the main component of a company's annual report that provides quantitative data to users of financial reports.

1. 1.Distinguish between financial statements and annual report.

1. 2.Explain the importance of notes to the accounts that form part of the financial statements.

b.The conceptual framework for financial reporting requires that financial statements be prepared that meet certain accounting assumptions and qualitative characteristics. Explain how the going concern assumption and the qualitative characteristics of comparability are applied in the preparation of financial reports.

(4 marks)

c.Cash Flow Statement is one of the main financial statements provided to users. Explain the importance of cash flow information to internal users in making decision.