ICAEW CFAB - Accounting - Chapter 1 Quiz

Which of the following is classified as revenue expenditure?

• A Purchase of inventories for resale

• B Purchase of a motor vehicle to deliver goods to customers

• C Purchase of machinery for use in production

• D Purchase of a warehouse to store inventory

Liability for the debts of the business does not fall on:

• A A sole trader

• B Partners in a general partnership

• C A limited liability company

• D Shareholders of a limited liability company

According to IAS 1, which of the following is not an objective of financial statements?

• A To provide information to investors in making economic decisions

• B To provide information to managers in making business decisions

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

• D To provide information about the cash flows of the entity

Which one of the following issues in an entity’s financial statements is likely to be of most interest to an entity’s lender?

• A Whether the entity has paid a dividend

• B Whether the entity will repay a loan when it falls due

• C Whether the entity will continue to be able to employ people

• D Whether the entity patronises local suppliers

The IFRS Foundation announced the formation of the ISSB in 2021.

Requirement

What does the acronym ISSB stand for?

• A International Social Standards Board

• B International Sustainability Standards Board

• C International Standards on Sustainability Benefits

• D International Society on Sustainability Benefits

In applying fundamental accounting concepts, the preparers of financial information are also using:

• A Legislation

• B Accounting standards

• C Judgement

• D Financial reporting standards

Which of the following would not be a suitable question to ask yourself when resolving an ethical dilemma?

• A Would my colleagues think my solution is reasonable?

• B Have I thought about all the possible consequences of my solution?

• C Could I defend my solution under public scrutiny?

• D Does my solution benefit my career?

A statement of financial position is best described as:

• A A snapshot of the entity’s financial position at a particular point in time

• B A record of an entity’s financial performance over a period of time

• C A list of all the income and expenses of the entity at a particular point in time

• D A list of all the assets and liabilities of the entity over a period of time

The ICAEW Code of Ethics only applies to the paid activities of the professional accountant.

• A True

• B False

Which of the following is not a source of the accounting rules embodied in UK GAAP?

• A The Companies Act 2006

• B UK accounting standards

• C Listing requirements of the London Stock Exchange

• D Accounting requirements of an entity’s US parent company