ROUND 1 - ACCOUNTING & FINANCE CHALLENGE 2023

 1.      Which of the following best describes the purpose of a purchase invoice?

• A. It is issued by a supplier as a request for payment

• B.  It is sent to supplier as a request for a supply

•   C. It is issued by supplier listing details of recent transactions

• C. It is sent to the supplier as notification of payment

2. 2. Which of the following statements is correct?

• A. Carriage inwards and carriage outwards are both accounted for as an expense in the statement of profit or loss.

• B. Carriage inwards and carriage outwards are both accounted for as income in the statement of profit or loss.

• C. Carriage inwards is treated as an expense and carriage outwards is treated as income in the statement of profit or loss.

• D. Carriage inwards is treated as income and carriage outwards is treated as an expense in the statement of profit or loss.

 3. If you were able to earn interest at 5% and you started with $100, how much would you have after 3 years?

• A. $91.51

• B. $109.27

• C. $115.76

• D. $103.00

 4. Which of the following is true when a bond is trading at a discount?

• A.    Coupon Rate > Current Yield > Yield to Maturity

• B.    Coupon Rate < Current Yield < Yield to Maturity

• C.     Coupon Rate = Current Yield = Yield to Maturity

• D. Coupon Rate < Current Yield = Yield to Maturity

5. Which of these questions measures the efficiency of a tax system

• A.    How much of the tax gets into the public treasury?

• B.    How simple is the tax code to understand and obey?

• C.    How fairly are the taxes distributed between rich and poor?

• D.     How well does the system fund the expenses of government?

6. 6.  Which of the following is example of those qualitative characteristics?

• A.    Accruals

• B.    Completeness

• C.    Going concern

• D.    All are incorrect.

7. 7. Which of the following statements is true in relation to a limited liability company?

• A.    A limited liability company can incur liabilities in its own name

• B.   A limited liability company cannot acquire assets in its own name

• C.   A limited liability company cannot incur liabilities in its own name

• D.   A limited liability company can be formed on an informal basis by simple agreement between the first shareholders

8. 8. Which of the following items could be used to encourage executive directors to operate in the best interests of the company?

• A.   They could be awarded a high salary

• B. They could receive bonuses based on both individual and company performance

• C.    The could be entitled to large payment on resignation

• D.   The could be asked to attend Annual General Meetings of the company

8. 9. Which of the following items would NOT be included in a sole trader’s capital?

• A. Equity share capital  

• B.  Revaluation surplus

• C.  Personal drawings

• D.  Capital account

10.  Which accounting concept requires non‐current assets to be valued at cost less accumulated depreciation, rather than at their enforced saleable value?

• A.  Prudence

• B. Relevance

• C. Comparability

• D. Going concern