AFM Assignment 1: Murdoch University Accounting Behavior and Control

This document presents a comprehensive solution to AFM Assignment 1, focusing on accounting behavior and control. It addresses three key questions: First, it defines the general purpose of the statement of comprehensive income, explains income and expenses according to the Conceptual Framework for Financial Reporting, and illustrates the statement's use. Second, it describes the purpose of the statement of financial position and explains the terms asset, liability, and equity within the Conceptual Framework. Third, it explains the accrual basis of accounting, detailing the principles involved, with an example of the cost of sales adjustment in the statement of comprehensive income. The solution incorporates financial concepts, definitions, and examples, supported by references to academic sources, providing a complete overview of the assignment requirements.