Question 1

The four main accounting principles for Financial Reporting established in SSAP 2 "Accounting Concepts" (1971)are:

Accepted Answer

A)  Going Concern, Accruals, Consistency and Prudence 
B)  Relevance, Reliability, Comparability and Understandability 
C)  Going Concern, Relevance, Consistency and Comparability 
D)  Accruals, Prudence, Reliability and Understandability 
A)  Going Concern, Accruals, Consistency and Prudence 
B)  Relevance, Reliability, Comparability and Understandability 
C)  Going Concern, Relevance, Consistency and Comparability 
D)  Accruals, Prudence, Reliability and Understandability

Question 2

Which fundamental accounting concept stipulates that revenues and profits are not anticipated,but recognized only when realized as cash?

Accepted Answer

A)  Consistency 
B)  Prudence 
C)  Comparability 
D)  Accruals 
A)  Consistency 
B)  Prudence 
C)  Comparability 
D)  Accruals

Question 3

Published financial statements are aimed at a variety of users,including customers,the public and employees

Accepted Answer

A) True 
 B)False

Question 4

If a business starts the year with equity of £1.5m,ends the year with £1.8m and inflation is at 10%,how much can it pay out in profit if a Current Purchasing Power (CPP)approach is taken?

Accepted Answer

A)  0.15m 
B)  0.3m 
C)  0.18m 
D)  0.03m 
A)  0.15m 
B)  0.3m 
C)  0.18m 
D)  0.03m

Question 5

Public financial statements are produced specifically in order to satisfy the requirements of HM Revenue and Customs

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is false?

Accepted Answer

A)  Lenders are often provided with more information than is included on the financial statements of a company 
B)  It would be impractical to expand financial statements to include all the information that different user groups want 
C)  It is a legal requirement for companies to provide relevant financial accounting information to each of the user groups defined by the IASB 
D)  Shareholders and lenders want to know about the future prospects of a company 
A)  Lenders are often provided with more information than is included on the financial statements of a company 
B)  It would be impractical to expand financial statements to include all the information that different user groups want 
C)  It is a legal requirement for companies to provide relevant financial accounting information to each of the user groups defined by the IASB 
D)  Shareholders and lenders want to know about the future prospects of a company

Question 7

Which of the following statements is false?

Accepted Answer

A)  For an "intangible" asset to be recognized, there must be a probability of it generating future economic benefit and be capable of being measured 
B)  Research expenditure may be treated as capital expenditure 
C)  Development expenditure may be treated as capital expenditure 
D)  Internally generated intangibles, such as brands, should not be capitalized 
A)  For an "intangible" asset to be recognized, there must be a probability of it generating future economic benefit and be capable of being measured 
B)  Research expenditure may be treated as capital expenditure 
C)  Development expenditure may be treated as capital expenditure 
D)  Internally generated intangibles, such as brands, should not be capitalized

Question 8

Which of the following statements is true?

Accepted Answer

A)  The amount of profit a company makes is more important than return on capital employed (ROC
E)  
B)  The amount of profit a company makes is less important than return on capital employed (ROC
E)  
C)  The amount of profit a company makes is not related to return on capital employed (ROC
E)  
D)  Shareholders are only concerned with the amount of profit a company makes 
A)  The amount of profit a company makes is more important than return on capital employed (ROC
E)  
B)  The amount of profit a company makes is less important than return on capital employed (ROC
E)  
C)  The amount of profit a company makes is not related to return on capital employed (ROC
E)  
D)  Shareholders are only concerned with the amount of profit a company makes

Question 9

If a business starts the year with equity of £1.5m,ends the year with £1.8m and inflation is at 10%,how much can it pay out in profit if an Historic Cost approach is taken?

Accepted Answer

A)  0.15m 
B)  0.3m 
C)  0.18m 
D)  0.03m 
A)  0.15m 
B)  0.3m 
C)  0.18m 
D)  0.03m

Question 10

Auditors are not responsible for finding fraud

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is correct?

Accepted Answer

A)  Retained earnings are usually available as a cash reserve 
B)  Retained earnings equal the total amount of equity in a company 
C)  Retained earnings are defined as operating profit plus proposed dividend 
D)  Retained earnings are not usually available as cash 
A)  Retained earnings are usually available as a cash reserve 
B)  Retained earnings equal the total amount of equity in a company 
C)  Retained earnings are defined as operating profit plus proposed dividend 
D)  Retained earnings are not usually available as cash

Question 12

Companies are allowed to pay dividends out of capital

Accepted Answer

A) True 
 B)False

Question 13

Which accounting principle stipulates that dividends should only be paid out of profit,not by issuing new share capital?

Accepted Answer

A)  Revenue recognition 
B)  Matching 
C)  Capital maintenance 
D)  Prudence 
A)  Revenue recognition 
B)  Matching 
C)  Capital maintenance 
D)  Prudence

The four main accounting principles for Financial Reporting established in SSAP 2 "Accounting Concepts" (1971)are:

Which fundamental accounting concept stipulates that revenues and profits are not anticipated,but recognized only when realized as cash?

Published financial statements are aimed at a variety of users,including customers,the public and employees

If a business starts the year with equity of £1.5m,ends the year with £1.8m and inflation is at 10%,how much can it pay out in profit if a Current Purchasing Power (CPP)approach is taken?

Public financial statements are produced specifically in order to satisfy the requirements of HM Revenue and Customs

Which of the following statements is false?

Which of the following statements is false?

Which of the following statements is true?

If a business starts the year with equity of £1.5m,ends the year with £1.8m and inflation is at 10%,how much can it pay out in profit if an Historic Cost approach is taken?

Auditors are not responsible for finding fraud

Which of the following statements is correct?

Companies are allowed to pay dividends out of capital

Which accounting principle stipulates that dividends should only be paid out of profit,not by issuing new share capital?

The Statement of Financial Position Balance Sheetand What It Tells Us

The Income Statement Profit and Loss Account

Ratios and Interpretation: a Straightforward Introduction

How the Stock Market Assesses Company Performance

Cash Flow Statements: Understanding and Preparation

Advanced Interpretation of Company and Group Accounts

Current Issues in Financial Reporting

Bookkeeping to Trial Balance

Trial Balance to Final Accounts

Financing a Business

Management of Working Capital

Introduction to Management Accounting

Investment Appraisal

Budgetary Planning and Control

Absorption Costing

Marginal Costing and Decision-Making

Standard Costing and Variance Analysis

Incomplete Records

Filters

Exam 3: The Development of Financial Reporting

The four main accounting principles for Financial Reporting established in SSAP 2 "Accounting Concepts" (1971)are:

Which fundamental accounting concept stipulates that revenues and profits are not anticipated,but recognized only when realized as cash?

Published financial statements are aimed at a variety of users,including customers,the public and employees

If a business starts the year with equity of £1.5m,ends the year with £1.8m and inflation is at 10%,how much can it pay out in profit if a Current Purchasing Power (CPP)approach is taken?

Public financial statements are produced specifically in order to satisfy the requirements of HM Revenue and Customs

Which of the following statements is false?

Which of the following statements is false?

Which of the following statements is true?

If a business starts the year with equity of £1.5m,ends the year with £1.8m and inflation is at 10%,how much can it pay out in profit if an Historic Cost approach is taken?

Auditors are not responsible for finding fraud

Which of the following statements is correct?

Companies are allowed to pay dividends out of capital

Which accounting principle stipulates that dividends should only be paid out of profit,not by issuing new share capital?

The Statement of Financial Position Balance Sheetand What It Tells Us

The Income Statement Profit and Loss Account

Ratios and Interpretation: a Straightforward Introduction

How the Stock Market Assesses Company Performance

Cash Flow Statements: Understanding and Preparation

Advanced Interpretation of Company and Group Accounts

Current Issues in Financial Reporting

Bookkeeping to Trial Balance

Trial Balance to Final Accounts

Financing a Business

Management of Working Capital

Introduction to Management Accounting

Investment Appraisal

Budgetary Planning and Control

Absorption Costing

Marginal Costing and Decision-Making

Standard Costing and Variance Analysis

Incomplete Records

Filters