IAS BCTA Level 1 June 2024 Intake Support Session 1

The basic accounting equation is:

• Assets = Liabilities – Equity

• Equity = Assets + Liabilities

• Assets + Equity = Liabilities

• Assets = Equity + Liabilities

ABC Company pays dividends of R25,000 in cash to their Shareholders in the 2022 year of assessment, what is the effect on the accounting equation?

• Option A

• Option B

• Option C

XYZ Ltd sells inventory worth R34 000 to Mr Xaba, who pays cash for the inventory on the date of purchase. XYZ applies a markup of 20% on the cost of inventory.

How will the journal entry look?

• Option A

• Option B

• Option C

The purpose of the Conceptual Framework is:

• To assist the International Accounting Standards Board to develop IFRS Standards.

• To assist preparers of IFRS financial statements to develop consistent accounting policies when no IFRS Standard applies to a particular transaction or other event, or when a Standard allows a choice of accounting policy.

• To assist all parties to understand and interpret IFRS Standards.

• All of the above

The residual interest in the assets of an entity after deducting all its liabilities is:

• Income

• Profit or loss

• Equity

• Other comprehensive income

A company purchases inventory with a cost of R10 000 on credit. Please select the correct journal entry.

• Option A

• Option B

• Option C

The fundamental qualitative characteristics of useful financial information are:

• Comparability and relevance

• Relevance and reliability

• Relevance, reliability, and comparability

• Relevance and faithful representation

• Comparability, relevance, and faithful representation

The Conceptual Framework defines a liability as:

• A present obligation of the entity to transfer an economic resource because of past events.

• A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

• An amount the entity may have to pay after the end of the reporting period.

• None of the above