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

Which of the following transactions should be treated as capital expenditure in the financial statements of Sydney, sole trader?

Which of the following is an aspect of relevance, according to the IFRS Foundation’s Conceptual Framework for Financial Reporting?

According to the Conceptual Framework for Financial Reporting, which of the following are enhancing qualitative characteristics?

According to the Conceptual Framework for Financial Reporting, information on which two of the following areas can help users identify the reporting entity's financial strengths and weaknesses?

According to IAS 1, Presentation of Financial Statements, which two of the following are objectives of primary financial statements?

Information is relevant if it is capable of making a difference in the decisions made by users. According to the Conceptual Framework for Financial Reporting, financial information is capable of making a difference in decisions if it has which of the following? (1) Predictive value (2) Comparative value (3) Historic value (4) Confirmatory value

The accounting principle which, in times of rising prices, tends to understate asset values and overstate profits, is:

Listed below are two comments on accounting conventions. (1) According to the Conceptual Framework for Financial Reporting, financial information must be either relevant or faithfully represented if it is to be useful. (2) Materiality means that only items having a physical existence may be recognised as assets. Requirement Which, if either, of these comments is correct?

Which of the following is the best description of fair presentation in accordance with IAS 1, Presentation of Financial Statements?

Which of the following definitions of the going concern concept in accounting is consistent with the definition given in IAS 1, Presentation of Financial Statements?

According to IAS 1, Presentation of Financial Statements, compliance with IFRS Accounting Standards will normally ensure that:

A sole trader started a business and purchased 45 bikes costing £650 each on credit in January. They sold 30 of these in February for £900 each. They had to pay their supplier in March and collected the cash from their customers in April. The trader prepares a monthly statement of profit or loss. Requirement Which of the following statements is true?

The directors of Lagon plc wish to omit an item from the company's financial statements on the grounds that it is commercially sensitive. Information on the item would influence the users of the information when making economic decisions. Requirement According to IAS 1, Presentation of Financial Statements, the item is said to be:

The International Sustainability Standards Board (ISSB) issues IFRS Sustainability Disclosure Standards. Requirement Which of the following statements regarding the ISSB and IFRS Sustainability Disclosure Standards is true?

Which three of the following are fundamental principles of the IESBA Code of Ethics for Professional Accountants?

Which of the following statements is correct?

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

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 is true or false. A code based upon a set of principles requires a professional accountant to comply with a set of specific rules.

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 is true or false. A rules-based code requires a professional accountant to identify, evaluate and address threats to compliance with fundamental ethical principles.

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 is true or false. The ICAEW uses a rules-based approach to professional ethics.

Which of the following is not a benefit to the primary users of annual reports of an entity providing sustainability-related financial disclosures?

Which two of the following are examples of dependencies which may affect an entity?

In terms of sustainability-related disclosures, factors that affect an entity’s ability to create or maintain value are referred to as dependencies. Indicate whether this statement is true or false.

Information on dependencies is generally more useful to an entity’s investors than information on impacts. Indicate whether this statement is true or false.

A business paid out £124,500 in net wages to its employees. In respect of these wages, the following amounts were presented in the statement of financial position: Pay as you earn (PAYE) payable £24,800; National Insurance (NI) payable – employees' £13,500; employer's £15,000. No other deductions were made. Requirement: Employees' gross wages, before deductions, were:

Which of the following is a source document that would be recorded in an entity’s cloud-based accounting software?

The following data has been extracted from the payroll records of Kleen Ltd for the month of February 20X1: Pay as you earn (PAYE) £17,000; Employer's national insurance (NI) £7,500; Employees' national insurance £6,000; Cash paid to employees £50,000. Requirement: The wages and salaries expense for the month is:

When a purchase invoice is received from a supplier which two of the following documents would the invoice be checked to before it is recorded in the cloud-based accounting software?

Lumina Ltd purchased goods on credit but returned them as they were defective. Requirement: What document would Lumina Ltd receive from the supplier in respect of the returned goods?

A bank transaction report shows a cash payment of £412 which the computerised accounting system has not been able to match to a transaction. Requirement: The unmatched payment is most likely the result of:

A business has the following payroll costs for a month: Gross pay £112,450; Income tax deducted £15,800; Employees' national insurance £9,810; Employer's national insurance £11,200. Requirement: What is the net amount paid to employees for the month?

A business has the following payroll costs for a month: Gross pay £38,600; PAYE £5,400; Employees' national insurance £3,100; Employer's national insurance £3,500. Requirement: What is the wages cost to the business for the month?

Which two of the following are source documents that contain information that will be entered into a business's accounting system?

Which two of the following are examples of a cloud-computing service?

Which of the following is a drawback of cloud accounting?

Which two of the following are disadvantages of using artificial intelligence (AI) to assist with bookkeeping?

Blaise Ltd is a VAT registered business whose sales and purchases carry VAT at the standard rate of 20%. Blaise Ltd sells goods to a customer on credit for £4,800 exclusive of VAT. Requirement: What is the double entry to record this?

What transaction is represented by the entries: Debit Rent, Credit Payables?

Crimson plc paid an invoice from a credit supplier and took advantage of the early settlement discount offered. When the invoice was received and recorded, Crimson plc did not expect to take the discount. Requirement: The journal entry to record the payment of the invoice is:

In double-entry bookkeeping, which of the following statements is true?

Winn Ltd has opening trade payables of £24,183 and closing trade payables of £34,655. Purchases for the period totalled £254,192 of which £31,590 related to cash purchases. Requirement: Total payments recorded in the payables ledger for the period were:

A business raises an invoice to a credit customer who is not expected to take advantage of an early settlement discount. What is the double entry to record the invoice raised?

Which of the following would require a debit entry in the payables account?

A payment has been received from a credit customer in settlement of an invoice. The customer was expected to take advantage of an early settlement discount offered however, payment was not made within the required time frame, and the discount was not taken. Requirement: The correct double entry to record the receipt of funds from the customer in full settlement of the invoice is:

Which of the following should be classified as a non-current asset?

Vantor Ltd is registered for VAT. In the month of April, it sells goods to customers for a total of £89,436 excluding VAT and purchases goods from suppliers for a total of £86,790 including VAT. Requirement: What is the net amount shown in Vantor Ltd's VAT account at the end of April?

A sole trader had trade receivables of £2,700 at 1 May. During May they made cash sales of £7,200, credit sales of £16,500 and received £15,300 from their credit customers. Requirement: The balance on the trade receivables account at the end of May was:

Which of the following would be a credit balance in the trial balance?

Plym Ltd is a VAT registered retailer. All transactions attract VAT at the rate of 20%. For the year to 30 June 20X7, Plym Ltd made purchases of £69,600 including VAT and made sales of £89,400 excluding VAT. There was no change in the figures for opening and closing inventory in the statements of financial position as at 30 June 20X6 and 20X7. Requirement: What was Plym Ltd's gross profit for the year ended 30 June 20X7?

Valaris Ltd had an opening trade payables balance of £3,450. Valaris Ltd sold goods totalling £6,780 to customers on credit, purchased goods totalling £5,100 from suppliers on credit and made cash purchases of £400. Valaris Ltd also received £3,900 from credit customers and made payments to credit suppliers of £4,200. Requirement: What was the balance on Valaris Ltd’s closing trade payables account?

The following are the closing balances on the accounts of a sole trader, at 31 December 20X8 after the profit for the year has been calculated. Non-current assets £85,000; Accumulated depreciation, non-current assets £15,000; Trade receivables £7,000; Inventory £4,000; Prepayments £2,000; Trade payables £3,000; Accruals £1,000; Bank loan £15,000; Bank overdraft £2,000. Requirement: What is the balance on the capital account at 31 December 20X8?

Indicate whether the following statement is true or false. The owner's drawings are shown on the initial trial balance.

Indicate whether the following statement is true or false. The closing inventory balance is included in the final trial balance.

When performing a reconciliation between the bank transaction report and the cash at bank account, which two of the following would require an entry in the cash at bank account?

The accounting records show the cash at bank account is £565 overdrawn, which does not agree to the bank balance per the electronic banking system. The accountant discovers the following: (1) A payment of £57 made by the business on 31 December 20X3 has not yet cleared its bank. (2) An electronic funds transfer of £92 from a customer, which was paid into the bank on 30 December 20X3, has been dishonoured by the customer’s bank on 31 December 20X3. Requirement: The correct balance in the business’ cash at bank account as at 31 December 20X3 is:

Smock Ltd’s draft profit for the year is £324,700. After the draft profit was calculated, the following issues were discovered: (1) Debts of £6,800 should have been written off as irrecoverable at the year end, but the journal entry was not posted. (2) The accounting software had automatically calculated and recorded depreciation, but the standing data was found to be incorrect. The depreciation rate for cars should have been updated to 20% straight-line at the start of the year but, was left as 25% straight-line in error. The balance on the car cost account at the year-end start of the year was £24,000. There were no additions or disposals of cars in the year. Requirement: What is Smock Ltd’s corrected profit for the year after accounting for the above issues?

A company’s initial trial balance includes a suspense account. The bookkeeper identified the amount as a purchase of machinery for £25,000. The amount had been correctly recorded in cash at bank, but the other side of the transaction had not been matched by the accounting system. Requirement Which of the following journal entries would remove the suspense account and correctly record the purchase of machinery?

The following information relates to a bank reconciliation. The balance in the cash at bank account before taking the items below into account was £8,970 overdrawn. (1) Bank charges of £550 on the bank statement have not been entered in the cash at bank account. (2) The bank has credited the account in error with £425 which belongs to another customer. (3) Electronic payments totalling £3,275 made shortly before the year end have been entered in the cash at bank account but have not yet cleared the bank statement. Requirement What was the overdrawn balance as shown by the bank statement?

Which two of the following statements about bank reconciliations are correct?

Alpha Ltd’s accounting records show the business owes a supplier, Beta Ltd, £4,140. This does not agree to the supplier statement received from Beta Ltd. Investigation reveals the following: (1) A bank transfer made to Beta Ltd of £4,080 shortly before year end has been recorded by Alpha Ltd but not by Beta Ltd. (2) Alpha Ltd has not adjusted for a £40 cash discount taken by Alpha Ltd but not allowed by Beta Ltd. (3) Goods costing £380 returned by Alpha Ltd have been correctly recorded by Beta Ltd but recorded by Alpha Ltd as £830. Requirement What is the corrected balance in Alpha Ltd’s accounting records after adjusting for these items?

Peri Ltd’s customer unexpectedly took advantage of an early settlement discount for £300, paying £3,700 on an invoice which totalled £4,000. Peri Ltd’s bookkeeper was not sure how to record the discount taken and so posted the following journal entry: DEBIT Cash at bank 3,700 DEBIT Suspense account 300 CREDIT Receivables 4,000 Requirement Which of the following journal entries will remove the suspense account and correctly record the discount?

Which two of the following differences between a company’s cash at bank account and its bank transaction report balance as at 30 November 20X3 would feature in the bank reconciliation?

An error of principle would occur if plant and machinery purchased:

Arvex Ltd’s exception report showed £265 received in the business bank account, and correctly recorded in cash at bank, could not be matched by the accounting system and so had been posted to a suspense account. Arvex Ltd discovered that the receipt was in respect of a sales invoice for £295 on which the customer had unexpectedly taken a prompt payment discount of £30. The customer had paid within the required timeframe and so was entitled to take the discount. Requirement Which of the following journal entries should Arvex Ltd’s post to correctly record the receipt and clear the suspense account?

Which of the following statements about bank reconciliations are correct? (1) All differences between the cash at bank account and the bank statement must be corrected by means of a journal entry. (2) In preparing a bank reconciliation, payments received from credit customers before the period end but credited by the bank after the period end should reduce an overdrawn balance in the bank statement. (3) Bank charges not yet entered in the cash at bank account should be dealt with by an adjustment to the balance per the bank statement. (4) If an electronic payment received from a credit customer is subsequently dishonoured by their bank, a credit entry in the cash at bank account is required.

The following trade payables account contains some errors. All goods are purchased on credit. TRADE PAYABLES Left side entries: Purchases £945,800; Purchases (Discounts received from suppliers) £12,600; Trade receivables (contra) £4,200; Closing balance £410,400. Total £1,373,000. Right side entries: Opening balance £384,600; Cash at bank account £988,400. Total £1,373,000. Requirement What would be the closing trade payables balance when the errors have been corrected?

An error of commission is one in which:

When the bookkeeper of Omnex Ltd does not know the correct entry for a receipt or payment, they record the amount correctly in the business bank account with the other entry recorded in the suspense account. The following transactions have been recorded in the suspense account: (1) A payment to a supplier for £135. (2) A receipt of £90 from a credit customer. (3) Interest received in the business bank account of £70. The suspense account balance was nil at the start of the period. Requirement What is the balance on the suspense account before corrections?

All of Eltrex Ltd’s sales and purchases attract VAT at 20%. A customer has just returned goods sold for £230 excluding VAT. Requirement The double entry for this transaction is:

Incorrectly recording the purchase of stationery by debiting the computer equipment account would result in:

In the trade payables of Magma Ltd, an invoice of £807 from Ferdinand has been recorded as a credit note. Requirement After correcting this error, the trade payables balance will be:

Beta Ltd has calculated a draft gross profit of £150,000 and a draft net profit of £83,000 for the year ended 31 December 20X3. Two issues were then discovered: (1) Inventory costing £5,000, with a resale value of £7,500, was received into the warehouse on 2 January 20X4 but had been included in the closing inventory amount at 31 December 20X3. (2) £10,000 relating to staff training costs was incorrectly capitalised as part of the purchase cost of a new machine which had been purchased on 1 July 20X3. Beta Ltd depreciates machinery on a straight-line basis at a rate of 20% per annum. Depreciation should be included as an administrative expense in the year. Requirement After correcting these issues, what amounts should Beta Ltd report for gross profit and net profit?

Emery, a sole trader, has taken goods valued at £1,800 for their own use. This has not been recorded in arriving at their businesses’ draft profit figure. Requirements To record the drawings, the business must adjust cost of sales by:

Emery, a sole trader, has taken goods valued at £1,800 for their own use. This has not been recorded in arriving at their businesses’ draft profit figure. As a result, Emery’s reported profit will:

Supplier Ruffle Ltd has a debit balance of £26 in Staint plc’s payables ledger. Requirement Which of the following would, alone, explain this balance?

Catt plc has prepared its draft statement of profit or loss at 31 May 20X1 which shows a gross profit of £99,500. It has been discovered that at both the beginning and the end of the period, one line of inventory, the Sungsa, has been included at selling price: £1,240 at 31 May 20X1 and £3,720 at 1 June 20X0. The Sungsa is always sold at a mark‑up of 25% by Catt plc. After correcting this error, what is Catt plc's gross profit for the year to 31 May 20X1?

Mayo Ltd's draft statement of profit or loss shows a net profit of £75,000 for the year ended 30 April 20X5. Mayo Ltd pays a subscription costing £1,000 for the year in two equal instalments. The first instalment was paid on 28 April 20X5 and was recorded in cash at bank and administrative expenses. No other entries have been made and no magazines have been received by Mayo Ltd. After correctly accounting for the subscription, what is Mayo Ltd's net profit for the year ended 30 April 20X5?

Hood Ltd has a draft net profit of £540,000 for the year ended 31 October 20X2. Errors discovered are: (1) repair costs of £6,600 incurred on 1 November 20X1 were debited to fixtures and fittings; the company depreciates fixtures and fittings at 25% per annum; (2) an early settlement discount of £1,785 taken appropriately by a customer was debited to trade receivables and credited to sales. After correcting these errors, what will Hood Ltd's net profit be?

Net profit was calculated as being £10,200. It was later discovered that capital expenditure of £3,000 had been treated as revenue expenditure, and revenue receipts of £1,400 had been treated as capital receipts. What is the net profit after correcting for these errors?

On reviewing its cash at bank account and the transaction report downloaded from its electronic banking system, Proba plc discovers the following errors: (1) a receipt from a credit customer for £1,095 was manually recorded in trade receivables and cash at bank as £1,509; (2) a payment made to a credit supplier for £89 was entered incorrectly in trade payables and the cash at bank account as £98. What is the journal entry to correct these errors?

In relation to trade payables at the year end of 30 April 20X1, Jitka plc has discovered that: (1) a contra of £85 with trade receivables is required; and (2) an early settlement discount of £2,220, which was taken appropriately by a credit customer, was credited to revenue and debited to trade payables. Before these discoveries, the balance on trade payables was £72,560. In its statement of financial position as at 30 April 20X1, what figure will Jitka plc have for trade payables?

An initial trial balance has been produced by an entity's accounting software. You have been asked to review the reasonableness of each ledger account balance listed in the initial trial balance to ensure that no errors have arisen. Which two of the following are errors that can arise in computerised accounting software?

Which one of the following situations is not likely to result in a suspense account being used to record a transaction?

The term ‘sustainability’ is understood to mean

Which two of the following were consequences of historically having no mandatory standards 25 relating to the disclosure of sustainability-related information

Which of the following statements regarding IFRS Sustainability Disclosure Standards is true?

According to IFRS S1, which of the following is not a heading under which companies must disclose 27 their sustainability-related risks and opportunities?

What are the two categories of climate-related risks identified in IFRS S2?

Topping plc's initial trial balance for the year ended 31 October 20X9 has been prepared. It shows 29 draft profit for the period of £58,147 and a credit balance on a suspense account of £738 in respect of accrued expenses. The bookkeeper was unsure of how to record the accrual and incorrectly debited £738 to prepayments and credited the suspense account.

Requirement What is Topping plc's profit for the period after this error has been corrected?

The accounting equation is correctly expressed as

The capital of a sole trader would change as a result of:

A business can make a profit and yet have a decreased bank balance. Which of the following might 3 cause this to happen?

The purpose of the financial statement that lists an entity's total assets and total capital and liabilities 4 is to show:

A sole trader is £5,000 overdrawn at their bank and receives £1,000 from a credit customer in respect 5 of its account. Requirement Which element(s) of the accounting equation will change due to this transaction?

A sole trader purchases goods on credit.

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

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

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

A sole trader sells goods for cash for £500 which had cost £300. 8 Requirement Which element(s) of the accounting equation will change due to this transaction?

A sole trader increases the business's number of motor vehicles by adding their own car to the 9 business's fleet.

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

Which three of the following are elements of financial statements as identified by the Conceptual Framework for Financial Reporting?