WorksheetsAccounting Theories
Total questions: 26
Worksheet time: 18mins
Identify the relevant accounting theory.
The need to record withdrawals of business assets by the owner for his personal use.
(a)
Identify the relevant accounting theory.
Inventory is valued the the lower of cost and net realisable value.
(a)
Identify the relevant accounting theory.
The motor vehicles of a business are depreciated at 20% per annum on a reducing-balancing method since the business started.
(a)
Identify the relevant accounting theory.
Source documents are required in the recording of business transactions.
(a)
Identify the relevant accounting theory.
Only information that are likely to make a difference to the decision-making process should be recorded.
(a)
Identify the relevant accounting theory.
Only business transactions that can be measured in monetary terms are recorded.
(a)
Which of the following are considered as part of the inventory cost?
Choose 2
Import duties
Salaries of salesperson
Freight charge to transport the goods to customers
Insurance cost when buying from supplier
Which of the following business form is most likely to face difficulties in trying to raise fund?
Sole Proprietorship
Limited Liability Partnership
Private Limited Company
Which business form requires its owner to pay off the business' liabilities using his own personal asset when in bankruptcy?
Sole Proprietorship
Limited Liability Partnership
Private Limited Company
Which business form has the most formalities and regulatory procedures to follow?
Sole Proprietorship
Limited Liability Partnership
Private Limited Company
Stakeholders are groups of people who will make use of infomration about the business to make (a) .
According to revenue recognition theory, revenue is recognised when when goods are sold and (a) .
Business needs to establish internal control to protect its cash because cash is highly __________ and therefore likely to be stolen.
profitable
liquid
portable
valued
Inventory is valued at the lower of cost and net (a) value.
Double entry in recording write-off of trade receivable
Dr ______________
Cr Trade receivable
Allowance for impairment of trade receivables
Impairment loss of trade receivables
Cash at bank
Discount allowed
[ Cost - (a) ] / Estimated useful life
Which is a better depreciation method for non-current assets such as motor vehicles and office equipment?
Straight line
Reducing balance
Mark-up on Cost = [ (a) / Cost of sales] x 100
Gross profit margin = [Gross profit / (a) ] x 100
Profit margin = [ (a) / Net sales revenue] x 100
Return on equity = [Profit for the year / (a) ] x 100
Which of the following are ways to improve gross profit margin?
Choose 2
Increase selling price
Decrease cost of sales
Better control over operating expenses
Increase other sources of income
Which of the following ratio will interest potential investor the most?
Mark-up on cost
Gross profit margin
Profit margin
Return on equity
By increasing the selling price of a product, the business will increase both the gross profit margin and profit margin.
True
False
By giving trade discount, it will encourage customers to buy more. This will increase the business' profit margin.
True
False
By giving cash discount to trade receivables to encourage early and prompt payments, this will increase the expenses (discount allowed incurred) of the business and thus decrease the profit margin.
Do u agree with the statement?
Yes
No
