Published Accounts

Question 1

Benefits of Published Accounts

Answer 1

• use the information to compare its performance against set targets. The information may also assist with forward planning
• may use the accounts to compare performance with that of previous years or with that of its competitors.
• Help with getting loans
• Attract new shareholders

Question 2

Limitations of Published Accounts

Answer 2

• Focuses on quantitative issues, ignoring qualitative.
• May be difficult to compare performance with rivals that use different accounting policies / or windowdress
• Not available usually till after the accounting year, therefore not as relevant.

Question 3

Purpose of an income statement [4]

Answer 3

• Can help in future decision making
• Can compare with previous years
• Shows the income and costs the business has