WorksheetsQuiz 1
Total questions: 10
Worksheet time: 15mins
Which of the following is the principal use of preparing a statement of financial position?
To report the assets, liabilities and capital of a business at a point in time
To provide a reliable valuation of the business at a point in time
To provide a record of how much profit or loss the business has made over the period
To report the movements of cash in and out in the business over the period
Choose TWO of the following phrases which form parts of the definition of a liability?
A reduction in an asset
An expected future outflow
An outflow of resources
An obligation
Which of the following might represent a net credit balance on a ledger account within a business’s general ledger?
(i) Provision
(ii) Return Outwards
(iii) Carriage Outwards
(iv) Net overpayment from credit customer
(i), (ii), (iii)
(i), (ii), (iv)
(i), (iii), (iv)
(i), (ii), (iii), (iv)
Going concern is the assumption that a business will:
will shortly be closed down
be profitable in the future
continue for the foreseeable future
continue for the next 10 years
Which of the following are enhancing qualitative characteristics of financial
information according to the Conceptual Framework for Financial Reporting?
Comparability
Understandability
Materiality
Verifiability
Which of the following transactions will not appear as a cash book payment?
Payments to payables for previous credit purchase
Goods purchased by cash
Cancelled cheques to supplier
Input tax on purchase by cash
What journal entry is needed to write off the irrecoverable balance of receivables?
Dr Receivables
Dr Receivables expenses
Cr Receivables
Cr Receivables expenses
What is the purpose of charging depreciation in the accounts of a business?
To ensure that funds are available for the eventual replacement of the asset
To reduce the cost of the asset in the statement of financial position to its estimated market value
To allocate the cost of the non-current asset over the accounting periods expected to benefit from its use
To comply with the prudence concept
Which of the following adjustments can an extended trial balance be used for?
Closing inventory
Sales return
Accruals
Discount received
Prepayment
When accounting for goodwill upon admission of a partner, what accounting entries are required to recognise goodwill due to the old partnership?
Dr Goodwill
Dr Partners' capital account
Cr Goodwill
Cr Partners' capital account
