Financial Accounting Flashcard II

Front

Qualitative characteristics that make financial information reliable according to the IASB’s Framework include: Faithful representation, neutrality, and prudence, Neutrality, comparability and true and fair view, Prudence, comparability and accruals, Neutrality, accruals and going concern.

Back

Faithful representation, neutrality, and prudence

Front

Which document should accompany a payment made to a supplier? Options: Supplier statement, Remittance advice, Purchase invoice

Back

Remittance advice

Front

The business entity concept requires that a business is treated as being separate from its owners. Is this statement true or false?

Back

True

Front

According to IAS 2 Inventories, which of the following costs should be included in valuing the inventories of a manufacturing company?
i) Carriage inwards
ii) Carriage outwards
iii) Depreciation of factory plant
iv) General administrative overheads

Back

Carriage inwards and Depreciation of factory plant

Front

What is the correct double entry to record the depreciation charge for a period? Options: DR Depreciation expense CR Accumulated depreciation, DR Accumulated depreciation CR Depreciation expense

Back

DR Depreciation expense CR Accumulated depreciation

Front

What figure should appear in the income statement for the year ended 30 June 20X6 for the allowance for receivables after writing off debts totalling $37,000 and adjusting the allowance to 5% of trade receivables totalling $517,000?

Back

$22000

Front

What should be the correct balance per the cash book based on the following bank reconciliation statement? Overdraft per bank statement 3,860 less: Outstanding cheques 9,160 add: Deposits credited after date 16,690 Cash at bank as calculated above 21,990

Back

$3,670 balance at bank

Front

Which of the following calculates a trader's net profit for a period? Options: a) Closing net assets + drawings – capital introduced – opening net assets, b) Closing net assets – drawings + capital introduced – opening net assets, c) Closing net assets – drawings – capital introduced – opening net assets, d) Closing net assets + drawings + capital introduced - opening net assets

Back

Closing net assets + drawings – capital introduced – opening net assets

Front

Which of the following items could appear in a company’s statement of cash flows?
i) Surplus on revaluation of non-current assets
ii) Proceeds of issue of shares
iii) Proposed dividend
iv) Dividends received

Back

Proceeds of issue of shares, Dividends received

Front

Which of the following should appear in a company’s statement of changes in equity?
1) Profit for the financial year
2) Amortisation of capitalised development costs
3) Surplus on revaluation of non-current assets

Back

Profit for the financial year