Question 2 [40 marks] 2.1 Explain why these external users of financial statements use financial statements for decision making: [10 marks] Investors Lenders Suppliers Government Management

10 2.2 Briefly discuss providing a well-reasoned answer as to what you consider the difference between recording and reporting in the practice of accounting. [ 6 marks] 2.3 Define the following terms: 2.3.1 Income [2 marks] 2.3.2 Expense [2 marks] 2.3.3 Equity [2 marks] The accountant of Butler Ltd has gone on sick leave and there are some outstanding issues. The Finance Director provided you with the following statement of financial position of Butler Ltd. Statement of financial position on 31 December 2018 ASSETS PPE 590,000.00 Share capital ( 2 000 000 authorises NPV shares) 250,000.00 Cash 10,000.00 Overdraft (4,000.00) Inventory 52,000.00 Trade receivables 30,000.00 Shareholders for dividends 22,000.00 Total assets 950,000.00 Equity and liabilities Retained earnings 610,000.00 Trade payables 220,000.00 Long-term loans 158,000.00 Accumulated depreciation 42,000.00 Income tax expense 60,000.00 Total equity and liabilities 1,030,000.00 You are required to: 2.4 Write a report critically evaluating the presentation of the above statement according to the requirements IAS 1. [18 marks]