Question 2. Which of the following should be accounted for as capital expenditure?

Question 3. Which of the following items should be treated as capital expenditure in the financial statements of a sole trader?

Which of the following is an aspect of relevance, according to the Conceptual Framework?

Question 5. According to the Conceptual Framework, which qualitative characteristics enhance the usefulness of information that is relevant and faithfully represented?

Question 6. Which THREE of the following users of financial statements are likely to be interested in the financial statements of a small private company?

Question 7. Which TWO of the following information needs apply to the government and its agencies in relation to the business as a sole trader?

The government and its agencies need information to:

Question 8. Information about an entity’s financial position is primarily provided in

Question 9. According to the Conceptual Framework, information on which TWO of the following areas can help users identify the reporting entity’s strengths and weaknesses?

Question 10. According to IAS 01 Presentation of Financial Statements, which TWO of the following are objectives of financial statements?

Question 11. Information is relevant if it is capable of making a difference in the decisions made by users. According to the Conceptual Framework, financial information is capable of making a difference in decisions if it has which of the following?

i. Predictive value

ii. Comparative value

iii. Historic value

iv. Confirmatory value

Question 12. The accounting principle which, in times of rising prices, tends to understate asset values and overstate profit, is

Question 13. In time of rising prices, what effect does the use of historical cost concept have on a company’s asset value and profit?

Question 14. Which of the following statements about accounting concepts and the characteristics of financial information is correct?

Question 15. Listed below are two comments on accounting conventions.

i. According to the Conceptual Framework, financial information must be either relevant or faithfully represented if it is to be useful.

ii. Materiality means that only items having a physical existence may be recognized as assets.

Which, if either, of these comments is correct?

Question 16. Which of the following is the best description of fair presentation in accordance with IAS 01 Presentation of Financial Statements?

Question 17. Which of the following definitions for the “going concern” concept in accounting is the most accurate in the light of IAS 01 Presentation of Financial Statements?

Question 18. According to IAS 01 Presentation of Financial Statements, compliance with international accounting standards and international financial reporting standards will normally ensure that:

Question 19. The directors of Lagon plc wish to omit an item from the company’s financial statement on the grounds that it is commercially sensitive. Information on the item would influence the user of the information when making economic decisions. According to IAS 01 Presentation of Financial Statement the item is said to be:

Question 20. Which THREE of the following are fundamental principles of the IFAC Code of Ethics for Professional Accountants?

Which of the following statement is correct?

Question 22. Which of the following statements best describes ethical guidance in the UK?

Question 23. There are two main approaches to a code of professional ethics: a rules-based ethical code and a code based upon a set of principles.

Indicate whether the following statement are true or false

A code based upon a set of principles requires a professional accountant to comply with a set of specific rules.answer choices

Question 24. There are two main approaches to a code of professional ethics: a rules-based ethical code and a code based upon a set of principles.

Indicate whether the following statement are true or false

The ICAEW uses a rules-based approach.

25.Which of the following would not be a suitable question to ask yourself when resolving an ethical dilemma?

26.A statement of financial position is best described as

27.Materiality is an entity-specific aspect of which qualitative characteristic?

28.According to IAS 01 which of the following does NOT represent an objective of financial statement?

29.In applying fundamental accounting concepts, the preparers of financial information are also using

30.Which of the following factors have not influenced financial reporting?

31.Which one of the following issues in an entity's financial statements is likely to be most interest to an entity's lender?

32.Which of the following is an item of capital expenditure?

34.Which of the following is not a source of the accounting rules enbodied in UK GAAP?

Question 35. The accounting equation can be written as:

33.An entity's transactions are recorded first in

Question 36. The capital of a sole trader would change as a result of:

Question 37. A business can make a profit and yet have a decreased bank balance. Which of the following might cause this to happen?

Question 38. The purpose of the financial statements that lists an entity’s total assets and total capital/liabilities is to show:

Question 39. A sole trader is £5,000 overdrawn at her bank and receives £1,000 from a credit customer in respect of its account.

Which element(s) of the accounting equation will change due to this transaction?

Question 40. A sole trader purchases goods on credit.

Which element(s) of the accounting equation will change due to this transaction?

Question 42. A sole trader sells goods for cash for £500 which had cost £300.

Which element(s) of the accounting equation will change due to this transaction

Question 41. A sole trader borrows £10,000 from a bank.

Which element(s) of the accounting equation will change due to this transaction?

Question 43. A sole trader increases the business’s number of motor vehicles by adding his own car to its fleet.

Which element(s) of the accounting equation will change due to this transaction?

Question 44. Which three of the following are elements of financial statements as identified by the IASB’s Conceptual Framework?

45.The Accounting Equation must always be in balance?

46.For accounting purpose, the proprietor is a separate and distinct entity from the business.

47.The owner invests personal cash in business.

48.The company receives cash from a bank loan

49.The company repays the bank that it had lent money

50.An asset is

51.Cost incurred in its efforts to create revenue is

52.An increase in expense will make capital decrease

53.A non-current asset is an asset that has a long-term useful life. True or false?

answer choices

54.Purchases from a supplier on credit is a liability.

Question 55. Which of the following items will appear in an entity's Cash Book?

1. Purchase Returns

2. Sales Invoices

3. Bank Charges

4. Cash Sales

Question 56. Petty cash is controlled under an imprest system. The imprest amount is £100. During a period, payments totaling £53 have been made. How much needs to be reimbursed at the end of the period to restore petty cash to the imprest account?

Question 57. Lira sells goods worth £18700 and buys goods for £14500. Both transactions include Sales tax at 17.5% on the listed price. Calculate how much does Lira has to pay the tax authorities in respect of these two transactions?

answer choices

Question 58. Invoice has been issued for......

Question 59. Which of the following is a source document for petty cash?

Question 60. A business in its first period of trading charges £4,000 of sales tax on its sales and suffers £3,500 of sales tax on its purchases which include £250 sales tax on business entertaining. What is the amount owed to tax authorities?

Question 61. W is registered for sales tax. The managing director has asked four staff in the accounts department why the output tax for the last quarter does not equal 17.5% of sales (17.5% is the rate of tax). Which one of the following four replies she received was not correct?

Question 62. With respect to sales tax which of the following statements is correct?

Question 63. Anwar makes sales in the quarter of £34,075 including sales tax at 17.5%. His total purchases net of sales tax are £11,010, of which £2,500 is for zero rated goods.

How much should he pay to the government?

Question 64. The following information relates to Eva Co's sales tax for the month of March 20X9:

Sales (including sales tax) 109,250

Purchases (net of sales tax) 64,000

Sales tax is charged at a flat rate of 15%. Eva Co's sales tax account showed an opening credit balance of £4,540 at the beginning of the month and a closing debit balance of £2,720 at the end of the month.

What was the total sales tax paid to regulatory authorities during the month of March 20X9?

Question 65. A sales tax registered trader has recorded the following transactions during the accounting period.

(1) Standard rated sales 200,000

(2) Purchases 150,000

Included in purchases are the purchases of a motor car for £20,000, a photocopier for £8,000 and entertaining expenses of £5,000. Sales tax is not recoverable on the motor car or entertainment expenses.

All figures are given inclusive of sales tax at 17.5%.

How much input tax can be reclaimed by the trader?

Question 66. Mandy sells goods worth £25,500 inclusive of sales tax and buys goods for £18,100 excluding sales tax. Relevant rate of Sales tax is 17.5% on the listed price. Calculate how much does Mandy has to pay the tax authorities in respect of these two transactions?

67.A Quotation has been made ………… the sales order placed.

68.Sale orders are source documents that are recorded in the sales daybook. True or false?

69.Input VAT cannot be reclaimed if the expenditure has been made via petty cash. True or false?

70.Which of the following is not a book of original entry?