- 4 Marks
PSAF – Nov 2019 – L2 – Q1a – General purpose financial reporting framework
Explain the importance and content of notes to the financial statements for a public sector entity.
Question
An Accounting Trainee has been given an assignment to prepare a complete set of financial statements of a public sector entity from data set provided by the Director of Finance. The Trainee prepared the financial statements to the admiration of the Director, except that no notes to the financial statements were provided. The Director made him aware that the notes to the financial statements are an essential component of the financial statements whether applying the cash basis of accounting or accrual basis of accounting as it enhances the usefulness of the financial reports to users. The Trainee has been directed to you to educate him further on the relevance of notes to the financial statements.
Required:
Write out your explanatory notes to the Trainee, the usefulness of notes to the financial statements, and the information that should be included in the notes to the financial statements of a public sector entity. (4 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Financial Statements, IPSAS, Notes, Public Sector
- Level: Level 2
- Topic: General purpose financial reporting framework
- Series: NOV 2019