FA - Ch. 1, 3, 4 & 5

There are a number of statements within a set of financial statements.

Which of the following is LEAST likely to be included within a set of financial statements?

• 1. Statement of profit or loss

• 1. Statement of cash flows

• 1. Statement of key business ratios

• 1. Statement of financial position

How a business operates will determine the legal framework it faces and the sources of funds it can access.

Which of the following statements is FALSE?

• 1. A business may operate as a limited company rather than as a sole trader for tax reasons.

• 1. A partnership can only be formed if a partnership agreement is drawn up.

• 1. A limited company, not its shareholders, has legal ownership of its own assets.

• 1. Sole traders often use bank overdrafts as a significant source of finance.

Naima is a sole trader who runs a grocery business.

Which of the following is most likely to be interested in Naima's financial statements?

• 1. Naima's auditors

• 1. Naima's customers

• 1. Naima's bank manager

• 1. Naima's shareholders

Which of the following is NOT a component of financial statements?

• 1. A statement of profit or loss and other comprehensive income

• 1. A statement of changes in equity

• 1. A cash flow forecast

• 1. Accounting policies and explanatory notes

Which of the following users of financial statements has least need of published financial information?

• 1. Potential investors and their advisers

• 1. Directors and management

• 1. Employees and their representatives

• 1. Customers and suppliers

Tariq took delivery of goods one month ago and is about to pay the amount owed to the supplier.

Which of the following business documents would Tariq send the supplier with the payment?

• 1. Debit note

• 1. Purchase order

• 1. Statement

• 1. Remittance advice

Which one of the following statements concerning a computerised accounting system is correct?

• 1. Able to produce output reports from ledger systems

• 1. May only be purchased off the shelf

• 1. Its sole objective is to prevent and detect fraud and error

• 1. Eliminates the use of journal entries

A business uses a computerised accounting system, with integrated sales and purchases modules. The bank and cash system is not integrated.

Which of the following transactions would have to be recorded using a manual journal entry in the general ledger?

• 1. The issue of a sales credit note

• 1. The receipt of a supplier (purchase) invoice

• 1. The receipt of a credit note from a supplier

• 1. The receipt of a payment from a customer

Which of the following documents will be found in a typical sales/ receivables system?

• 1. Purchase invoice

• 1. Purchase order

• 1. Sales invoice

• 1. Supplier statement

Due to a pricing error, a business charges a customer $750 for goods that should have been invoiced at $570.

Which of the following documents could be raised to correct this?

• 1. A credit note

• 1. A debit note

• 1. A direct debit

• 1. A customer (sales) invoice