Reference no: EM133113023

Question - The following are several transactions of Time Traveler Company that occurred during the current year and were recorded in permanent accounts unless indicated otherwise. Time Traveler's fiscal year ends on December 31.

1. Accounting can be defined as a systematic process of identifying, recording, classifying, verifying, summarizing, and analyzing financial information of an organization. Briefly, explain the main objective of Accounting?

2. Select three accounting policies used in the preparation of financial statements and explain the importance of those policies and the accounting concepts/principles relevant for the same.

3. If the purchase cost of a tangible fixed asset (Property, Plant & Equipment) is not charged to the income statement in the year of purchase, how can a company recognize expenses relating to these assets in the financial statements?

4. Why might the revenue and cost figures shown on a standard income statement not be representative of the actual cash inflows and outflows that occurred during a period? What is the difference between income and profit?

5. State five stakeholders of a business organization and explain why each of them is interested in affairs of a business organization?