Đề 1 ktcfab

Question 1. Which of the following best explains what is meant by “capital expenditure”? Capital expenditure is expenditure:

• On non-current assets, including repairs and maintenance

• On expensive items over £10,000

• On the acquisition of non-current assets, or improvement in their earning capacity

• On items relating to owners’ capital

Question 2. Which of the following should be accounted for as capital expenditure?

• The annual cost of painting a factory floor

• The repair of a window in a building

• The purchase of a vehicle by a garage for re-sale

• Legal fees incurred on the purchase of a building

Question 3. Which of the following items should be treated as capital expenditure in the financial statements of a sole trader?

• £500 taken by the proprietor to buy himself a hi-fi system

• £400 spent on purchasing a new PC to replace his secretary’s old one

• £2,000 on purchasing a machine for re-sale

• £150 paid to a painter for redecorating his office

Which of the following is an aspect of relevance, according to the Conceptual Framework?

• Neutrality

• Free from error

• Completeness

• Materiality

Question 5. According to the Conceptual Framework, which qualitative characteristics enhance the usefulness of information that is relevant and faithfully represented?

• Comparability, Understandability, Timeliness, Verifiability

• Consistency, Prudence, Measurability, Verifiability

• Consistency, Reliability, Measurability, Timeliness

• Materiality, Understandability, Measurability, Reliability

Question 6. Which THREE of the following users of financial statements are likely to be interested in the financial statements of a small private company?

• Stock market analysts

• Company employees

• The company’s bank

• Institutional shareholders

• Suppliers

Question 7. Which TWO of the following information needs apply to the government and its agencies in relation to the business as a sole trader?

The government and its agencies need information to:

• Establish levels of tax revenue

• Assess whether the business will continue in existence

• National statistics

• Assess the owner’s stewardship

• Take decisions about the investment

Question 8. Information about an entity’s financial position is primarily provided in

• The statement of profit or loss

• The statement of financial position

• Retained earnings

• The statement of cash flows

Question 9. According to the Conceptual Framework, information on which TWO of the following areas can help users identify the reporting entity’s strengths and weaknesses?

• The economic resources it controls

• Its financial performance in the past

• The demographic structure of the local economy

• The entity’s claims (the entity’s liabilities)

• Its management structure

Question 10. According to IAS 01 Presentation of Financial Statements, which TWO of the following are objectives of financial statements?

• To show the results of management’s stewardship of the resources entrusted to it

• To provide a basis for valuing the entity

• To provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions

• To facilitate comparison of financial performance between entities operating in different industries

• To assist management and those charged with governance in making timely economic decisions about deployment of the entity’s resources