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WorksheetsQualitative Characteristics and Elements of Accounting
Total questions: 30
Worksheet time: 3600secs
Information must be understandable to users who are mature and willing to study the information diligently.
Understandability
Reliability
Relevance
Verifiability
Timeliness
This information must be relevant in that it influences the decisions of users. This influence occurs when information helps the reader to:
predict future income and cashflows confirm or correct previous predictions by feeding back actual results.
Understandability
Reliability
Verifiability
Relevance
Timeliness
Information must be reliable to be useful. The information should be of a standard that can be relied on by external users.
Understandability
Reliability
Verifiability
Relevance
Timeliness
Information must be timely if it is to be relevant. Financial statements should be published as soon as possible after year-end.
Understandability
Reliability
Verifiability
Relevance
Timeliness
he information must be capable of being tested (i.e. falsified, or provable by observation).
Understandability
Reliability
Verifiability
Relevance
Timeliness
Freedom from bias so as to ensure that there is no overstatement or understatement in favour of any particular group of users or individual users.
Comparability
Completeness
Verifiability
Neutrality
Accounting information from an entity should be comparable with those of other similar entities
Comparability
Completeness
Consistency
Verifiability
The same accounting methods and principles should be used from year to year in the preparation of financial statements.
Verifiability
Neutrality
Completeness
Consistency
Where financial statements show all aspects of the business.
Consistency
Completeness
Verifiability
Neutrality
Which of the following is not related to relevance?
Predictive Value
Feedback value
Timeliness
Verifiability
The need to have accurate and unbiased information, represents the qualitative characteristic of:
comparability
reliability
relevance
timeliness
Accountant should exercise caution when dealings with uncertainty. This is an application of ...
Neutrality
Substance over form
Prudence
Consistency
When preparing financial reports, accountants are expected to use the same accounting methods consistently from one period to next
Comparability
Materiality concept
Understandability
Consistency concept
Significant information should be revealed in the financial reports of a business because it could influence the economic decisions of users
Materiality
Substance Over Form
Reliability
Cost-Benefit Theory
Accounting information should accurately reflect the true condition of the business.
Predictive value
Substance over form
Feedback value
Faithful representation
Accounting information has relevance if it confirms or corrects prior expectations. This explains about...
Objective value
Feedback value
Predictive value
Confirmative value
What ere the two constraints in qualitative characteristics?
Materiality, Cost vs Benefit
Comparability, Consistency
Timeliness, Understandability
Cost vs benefit, Timeliness
Accountants should not select which information to be reported in the reports and which should not be reported. This will impair ........ concept.
Neutrality
Comparability
Prudence
Relevance
Which of the following statement best defines an asset?
Assets are debts owed by customers that are expected to generate future benefits.
Assets are resources owned by the business that are expected to generate future benefits.
Assets are resources belonging to the owner that are expected to generate future benefits.
Assets are items that are useful and of value e.g. laptop, iphone, skateboard etc.
What is capital?
Cash contributed by the owner to operate the business
Assets that have been taken out of the business by the owner for business use
Assets contributed by the owner to operate the business
Assets that have been taken out of the business by the owner for his personal use
What is the amount taken out by the owner from the business for his personal use known as?
Drawing
Cash on hand
Capital
Cash in bank
In the shop, what are the cash and checks kept in the cash register and safety box known as?
Trade receivable
Cash in bank
Capital
Cash on hand
Which one best represents Equity of the business?
Equity = Capital
Equity = Capital – Drawing - Profit
Equity = Capital – Drawing - loss
Equity = Asset + Liability
Identify the 5 accounting elements from the following
assets, loan, income, equity, expenses
assets, liabilities, insurance, equipment, expenses
assets, loan, interest, capital, expenses
assets, liabilities, income, equity, expenses
Which of the following accounts have Debit nature?
cash at bank, interest income, trade receivables
inventory, cash in hand, motor vehicles
trade payables, insurance, discount allowed
equipment, loan, capital
What is the difference between sales revenue and sales returns?
sales revenue is amount earned from providing goods while sales returns is amount earned from providing services
sales revenue is amount earned from providing goods while sales returns is not sales revenue
sales revenue is amount earned from providing goods while sales returns is amount of goods returned from customers
sales revenue is amount earned from providing goods while sales returns is amount of profit
Trade payable is an example of ______________________________.
Assets
Liability
Equity
Income
Expense
Advertising is an example of ______________________________.
Assets
Liability
Equity
Income
Expense
Land Improvements is an example of ______________________________.
Assets
Liability
Equity
Income
Expense
Drawing is an example of ______________________________.
Assets
Liability
Equity
Income
Expense
