Kế CFAB - Chap 5

In accounting, capital is an investment of money (funds) with the intention of earning a return

• T

• F

Paid upfront but not yet performed would be a contract                                       

• Liability

• Asset

Property, plant and equipment is treated as                                   in the SFP.

 

• Non-current assets

• Current assets

A contract performed but not paid would be a contract receivable or asset.A contract asset if the payment is                        

 

• conditional (on something other than time)

• unconditional

The first step in the process of preparing the financial statements is to open up another ledger account, called the statement of profit or loss.

 

• True

• False

. Revenue is recognised as control is passed. Which of the following best describes control with respect to the revenue recognition?

 

• It’s the ability to direct the use of and get almost all of the benefits from the asset

• It’s the promise to give the goods/services is separately identifiable

The following are all current assets: trade receivables, inventories, prepaid expenses and cash at bank. Which is the least liquid?

 

•   Inventories

• Trade receivables

• Cash at bank

Which of the following would be classified as a non-current asset?

 

• Cash

• Prepayment

• Land

• Receivables

When preparing an extended trial balance what are the entries for the business's profit?

 

• Debit the SOFP column and the SOPL column

• Credit the SOFP column and the SOPL column

• Debit the SOFP column and credit the SOPL column

• Debit the SOPL column and credit the SOFP column

Which of the following statements concerning preparation of financial statements is true?

 

• The balances on income and expens accounts are brought down at the end of the accounting period to be carried forward to the next accounting period

• The balances on asset and liability accounts are summarised in an additional ledger account known as the SOFP ledger account

• The SOPL ledger account is a list of all the balances extracted from the business's accounts

• Loss for the year is a credit entry in the SOPL ledgeraccount