Question 1

Which of the following statements describe partnerships? Please select all that apply.

Accepted Answer

A)   Two or more individuals managing a business together.
B)   Joint and several liability for partnership debts.
C)   Legal formalities are required before trading in a partnership can commence.
D)   Sharing of both profits and losses from partnership operations. A, B, D

Question 2

Which of the following are enhancing qualitative characteristics of financial information?
Please select all that apply.

Accepted Answer

A)   Relevance
B)   Understandability
C)   Timeliness
D)   Verifiability B, C, D

Question 3

The objective of general-purpose financial reporting is to provide financial information about the reporting entity that is useful to a wide range of users in making decisions relating to providing resources to the entity. Those decisions include buying, selling or holding equity and debt instruments and providing or settling loans and other forms of credit.

Accepted Answer

A) True 
 B)False  False

Question 4

The usefulness of information is enhanced only if it can be compared with similar information about the same entity for other reporting periods.

Accepted Answer

A) True 
 B)False

Question 5

Which one of the following statements applies to both private limited companies and public limited companies?

Accepted Answer

A)   Governed by the Companies Act 2006.
B)   Must comply with corporate governance codes.
C)   Have their shares listed on recognised stock exchanges..
D)   Must use the designation plc.

Question 6

For information to be truly comparable, it must be presented in exactly the same way by all organisations. .

Accepted Answer

A) True 
 B)False

Question 7

Nishi Limited has non-current assets of £622,481, non-current liabilities of £235,148, current assets of £359,727 and equity of £327,138. Using the accounting equation, calculate the figure for current liabilities.

Accepted Answer

A)   £170,764
B)   £419,922
C)   £890,218
D)   £1,074,198

Question 8

Gurbinder Limited has non-current assets of £250,000, current assets of £142,000, current liabilities of £125,000 and equity of £150,000. Using the accounting equation, calculate the figure for non-current liabilities.

Accepted Answer

A)   £667,000
B)   £383,000
C)   £367,000
D)   £117,000

Question 9

The accuracy of information is verified by recalculation.

Accepted Answer

A) True 
 B)False

Question 10

Financial information can be material by nature, magnitude or both.

Accepted Answer

A) True 
 B)False

Question 11

Farook Limited has current assets of £68,420, current liabilities of £50,328, non-current liabilities of £102,000 and equity of £202,359. Using the accounting equation, calculate the figure for non-current assets.

Accepted Answer

A)   £18,389
B)   £118,451
C)   £286,267
D)   £423,107

Question 12

Materiality is not an enhancing qualitative characteristic of financial information.

Accepted Answer

A) True 
 B)False

Exam 1: Introduction, and the Statement of Financial Position

Which of the following statements describe partnerships? Please select all that apply.

Which of the following are enhancing qualitative characteristics of financial information? Please select all that apply.

The usefulness of information is enhanced only if it can be compared with similar information about the same entity for other reporting periods.

Which one of the following statements applies to both private limited companies and public limited companies?

For information to be truly comparable, it must be presented in exactly the same way by all organisations. .

Nishi Limited has non-current assets of £622,481, non-current liabilities of £235,148, current assets of £359,727 and equity of £327,138. Using the accounting equation, calculate the figure for current liabilities.

Gurbinder Limited has non-current assets of £250,000, current assets of £142,000, current liabilities of £125,000 and equity of £150,000. Using the accounting equation, calculate the figure for non-current liabilities.

The accuracy of information is verified by recalculation.

Financial information can be material by nature, magnitude or both.

Farook Limited has current assets of £68,420, current liabilities of £50,328, non-current liabilities of £102,000 and equity of £202,359. Using the accounting equation, calculate the figure for non-current assets.

Materiality is not an enhancing qualitative characteristic of financial information.