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PFA ICA1 D

PFA ICA1 D

Assessment

Presentation

Business, Other

Professional Development

Easy

Created by

Kez 7

Used 2+ times

FREE Resource

4 Slides • 4 Questions

1

BM4112: Challenger

Part D

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2

Multiple Choice

What is the prudence concept?

1

Not overstate revenue & not understate liabilities

2

Not understate revenue & not overstate liabilities

3

Not overstate revenue & not overstate liabilities

4

Not understate revenue & not understand liabilities

3

Multiple Choice

Challenger's cost of inventory is valued at $1,000,000, but its NRV is valued at $900,000. Which value should Challenger use to record inventory?

1

$1,000,000

2

$900,000

4


Prudence Concept

  • Not to overstate Asset/Revenue

  • Not to understate Liabilities/Expenses

  • Record the lower amount for inventory

5

Multiple Choice

Challenger is a Limited Liability Company. You are a shareholder in Challenger. Challenger just went into debt and you need to pay. How much do you need to pay?

1

The amount you invested

2

Equal amount spilt with the other shareholders

6

Types of Business Organisation Concept

  • Challenger is a Public Limited Company

  • Shareholders are only liable to the amount they invested

7

Multiple Choice

Challenger is in debt! Where can they get the funds to pay it off??

1

Funds from shares that the public can buy

2

Sell off its current assets

8

Types of Business Organisation concept

  • Challenger is a Public Limited Company,

  • Shares may be sold and traded to the public freely

  • When Challenger needs more funds to pay its debt or sell new goods and services, 

  • it can generate the funding it requires by letting the public buy its shares. 

BM4112: Challenger

Part D

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