Question 1

Which of the following documents is not a component of financial statements but forms part of the annual return?

Accepted Answer

A)  Statement of financial position 
B)  Statement of cash flows 
C)  Financial review 
D)  Comprehensive income statement 
A)  Statement of financial position 
B)  Statement of cash flows 
C)  Financial review 
D)  Comprehensive income statement C

Question 2

Which of the following may be classified as an intangible non-current asset?

Accepted Answer

A)  Leasehold premises. 
B)  Investments. 
C)  Goodwill. 
D)  Trade receivables. 
A)  Leasehold premises. 
B)  Investments. 
C)  Goodwill. 
D)  Trade receivables. C

Question 3

A partnership is:

Accepted Answer

A)  When two or more people get together to form a business 
B)  When members get together to form a business 
C)  When a business is incorporated by law as a separate legal entity 
D)  When an individual starts a business on their own 
A)  When two or more people get together to form a business 
B)  When members get together to form a business 
C)  When a business is incorporated by law as a separate legal entity 
D)  When an individual starts a business on their own A

Question 4

In accounting the term 'purchases' means:

Accepted Answer

A)  All items bought 
B)  Only goods bought on credit 
C)  Only goods bought and paid for 
D)  Only goods bought for resale 
A)  All items bought 
B)  Only goods bought on credit 
C)  Only goods bought and paid for 
D)  Only goods bought for resale

Question 5

Which of the following is correct?
A statement of financial position has the following sub-headings:

Accepted Answer

A)  Non-current assets, Current assets, Owners' capital, Non-current liabilities, Current liabilities 
B)  Current assets, Income, Non-current assets, Owners' capital, Non-current liabilities 
C)  Owners capital, Non-current liabilities, Current liabilities, Current assets, 
D)  Liabilities, Assets, Non-current income, Non-current expenditure, Owners capital 
A)  Non-current assets, Current assets, Owners' capital, Non-current liabilities, Current liabilities 
B)  Current assets, Income, Non-current assets, Owners' capital, Non-current liabilities 
C)  Owners capital, Non-current liabilities, Current liabilities, Current assets, 
D)  Liabilities, Assets, Non-current income, Non-current expenditure, Owners capital

Question 6

Which of the following should not appear in the income statement?

Accepted Answer

A)  Stationery 
B)  Advertising 
C)  Fixtures 
D)  Rates 
A)  Stationery 
B)  Advertising 
C)  Fixtures 
D)  Rates

Question 7

Which of the following should appear in the income statement?

Accepted Answer

A)  Rent 
B)  Motor vehicles 
C)  Plant and Machinery 
D)  Computer equipment 
A)  Rent 
B)  Motor vehicles 
C)  Plant and Machinery 
D)  Computer equipment

Question 8

Which of the following should appear in the statement of financial position?

Accepted Answer

A)  Wages 
B)  Drawings 
C)  Purchases 
D)  Heat and light 
A)  Wages 
B)  Drawings 
C)  Purchases 
D)  Heat and light

Question 9

The book value of non-current assets is:

Accepted Answer

A)  £5,000 
B)  £17,000 
C)  £22,000 
D)  £27,000 
A)  £5,000 
B)  £17,000 
C)  £22,000 
D)  £27,000

Question 10

In a statement of financial position for a sole trader the balance of the non-current assets are usually included at:

Accepted Answer

A)  Cost 
B)  Book value 
C)  Scrap value 
D)  Replacement value 
A)  Cost 
B)  Book value 
C)  Scrap value 
D)  Replacement value

Question 11

The accumulated depreciation on non-current assets is:

Accepted Answer

A)  £5,000 
B)  £17,000 
C)  £22,000 
D)  £27,000 
A)  £5,000 
B)  £17,000 
C)  £22,000 
D)  £27,000

Question 12

The historical cost value of non-current assets is:

Accepted Answer

A)  £5,000 
B)  £17,000 
C)  £22,000 
D)  £27,000 
A)  £5,000 
B)  £17,000 
C)  £22,000 
D)  £27,000

Question 13

Which of the following is not a liability?

Accepted Answer

A)  Bank loan 
B)  Bank deposit account 
C)  Trade payables 
D)  Tax owing 
A)  Bank loan 
B)  Bank deposit account 
C)  Trade payables 
D)  Tax owing

Question 14

Which order should the following items appear in the statement of financial position?
1)Inventory
2)Cash
3)Trade receivables
4)Prepayments

Accepted Answer

A)  2, 4, 3, 1 
B)  4, 2, 3, 1 
C)  1, 2, 3, 4 
D)  1, 3, 4, 2 
A)  2, 4, 3, 1 
B)  4, 2, 3, 1 
C)  1, 2, 3, 4 
D)  1, 3, 4, 2

Question 15

The following information should be used to answer questions 6 to 9
A. SimonStatement of financial position as at 31 March 20Y0
      
-The owner's capital employed in the business at the date of the statement of financial position is:

Accepted Answer

A)  £12,000 
B)  £14,000 
C)  £19,000 
D)  £21,350 
A)  £12,000 
B)  £14,000 
C)  £19,000 
D)  £21,350

Question 16

Which of the following is an investment in an associated company?

Accepted Answer

A)  A trademark 
B)  A motor vehicle 
C)  A share certificate for a quoted company 
D)  A stake in a subsidiary 
A)  A trademark 
B)  A motor vehicle 
C)  A share certificate for a quoted company 
D)  A stake in a subsidiary

Exam 1: Entities and Financial Reporting Standards

Which of the following documents is not a component of financial statements but forms part of the annual return?

Which of the following may be classified as an intangible non-current asset?

A partnership is:

In accounting the term 'purchases' means:

Which of the following is correct? A statement of financial position has the following sub-headings:

Which of the following should not appear in the income statement?

Which of the following should appear in the income statement?

Which of the following should appear in the statement of financial position?

The book value of non-current assets is:

In a statement of financial position for a sole trader the balance of the non-current assets are usually included at:

The accumulated depreciation on non-current assets is:

The historical cost value of non-current assets is:

Which of the following is not a liability?

Which order should the following items appear in the statement of financial position? 1)Inventory 2)Cash 3)Trade receivables 4)Prepayments

The following information should be used to answer questions 6 to 9 A. SimonStatement of financial position as at 31 March 20Y0 -The owner's capital employed in the business at the date of the statement of financial position is:

Which of the following is an investment in an associated company?

International Accounting: Institutional Framework and Standards

The Nature and Objectives of Financial Accounting

Accounting Principles, Concepts and Policies

The Conceptual Framework of Accounting

Auditing, Corporate Governance and Ethics

The Accounting Equation and Its Components

Basic Documentation and Books of Accounts

The General Ledger

The Balancing of Accounts and the Trial Balance

Day Books and the Journal

The Cash Book

The Petty Cash Book

The Final Financial Statements of Sole Traders

Depreciation and Non-Current Assets

Bad Debts and Provisions for Bad Debts

Accruals and Prepayments

The Preparation of Final Financial Statements From the Trial Balance

The Bank Reconciliation Statement

Control Accounts

Errors and Suspense Accounts

Single Entry and Incomplete Records

Inventory Valuation

Financial Statements for Manufacturing Entities

The Final Financial Statements of Clubs

The Final Financial Statements of Partnerships

Changes in Partnerships

Partnership Dissolution and Conversion to Company Status

The Nature of Limited Companies and Their Capital

The Final Financial Statements of Limited Companies

Statement of Cash Flows

The Appraisal of Company Financial Statements Using Ratio Analysis

Filters