FA (New Mock) 2024

Which of the following statements is true?

• The directors of a company are liable for any losses of the company

• A sole trader business is owned by shareholders and operated by the proprietor

• Partners are liable for losses in a partnership in proportion to their profit share ratio

• A company is run by directors on behalf of its members

Which of the following statements best defines a statement of financial position?

• It is a summary of income and expenditure for an accounting period

• It is a summary of cash receipts and payments made during an accounting period

• It is a summary of assets, liabilities and equity at a specified date

• It is a summary of assets and expenses at a specified date

Which of the following statements best defines a statement of profit or loss?

• It is a summary of assets and expenses at a specified date

• It is a summary of cash receipts and payments made during an accounting period

• It is a summary of assets, liabilities and equity at a specified date

• It is a summary of income and expenditure for an accounting period

Which of the following statements best defines a liability?

• A liability is an obligation arising from a past transaction or event.

• A liability is a legally binding amount owed to a third party.

• A liability is a present obligation of the entity to transfer an economic resource as a result of past events.

• A liability is anything which results in an outflow of economic benefits from an entity.

Which of the following statements best defines an expense?

• An expense is any outflow of economic benefits in an accounting period.

• An expense is an outflow of economic benefits resulting from the purchase of

  resources in an accounting period.

• An expense is an outflow of economic benefits resulting from a claim by a third party.

• An expense is decrease in assets, or increase in liabilities, that result in decreases in equity other than those relating to distributions to holders of equity claims.

Which of the following statements is true in relation to a partnership?

• A partnership is a separate legal entity

• A partnership is jointly owned and managed by the partners

• A partnership can raise capital by issuing shares to members of the public

• A partnership is able to own property and other assets in its own name

Which of the following statements is true in relation to a sole trader?

• A sole trader cannot have any employees

• A sole trader is able to introduce or withdraw capital from the business at any time

• A sole trader has limited liability for the debts of the business

• A sole trader can operate a business from only one location

Which of the following statements best defines an asset?

• An asset is a resource owned by the entity with a financial value.

• An asset is a resource controlled by an entity from which future economic benefits are expected to be generated.

• An asset is a resource controlled by an entity as a result of past events.

• An asset is a present economic resource controlled by the entity as a result of past events.

The double-entry system of bookkeeping normally results in which of the following balances on the ledger accounts?

Debit balances:

Credit balances:

• Assets and revenues

  Liabilities, capital and expenses

• Revenues, capital and liabilities

  Assets and expenses

• Assets and expenses

  Liabilities, capital and revenues

• Assets, expenses and capital

  Liabilities and revenues

Which of the following entries would be required to account for a reimbursement to the petty cash float of $125 from the bank account?

• Dr Petty cash

  Cr Cash and bank

• Dr Cash and bank

  Cr Petty cash

• Dr Drawings

  Cr Petty cash

• Dr Drawings

  Cr Cash and bank