Answer this question:-

Q1. Describe the primary function and purpose of financial accounting.

Q2. Purpose of a conceptual framework

(a) Objective

(b) . Primary Qualities- relevance and faithful representation

1. Component of relevance- predictive value, confirmatory value, materiality.

2. Component of faithful representation- completeness, neutrality, free from error.

Q3. Enhancing Qualities- comparability, consistency, verifiability, timeliness understandability.

Q4. Financial statement and their purpose

i. Balance Sheet

2. Income Statement

3. Statement of Shareholders Equity

4. Statement of Cash Flows

Q.5. Underlying assumptions

1. Economic entity

2. Going concern

3. Periodicity

4. Monetary unit

Q6. The element of financial statement- asset, liabilities, contribution by owner, distribution to owners, revenues, expenses, gain, losses, net income, comprehensive income.