Acca Financial accounting Questions and Answers 2023/2024 The major purpose of IASB is to ensure consistency in - Correct Answer corporate reporting The leadership style that least acknowledges contribution that subordinates have to make is - Correct Answer autocratic a sole traders net profit for period we can calculate as - Correct Answer closing net assets+drawings-capital introduced- opening net assets Imprest (zaliczkowy) system of operating petty cash - Correct Answer The exact amount of expanditure is reimbursed at intervals to maintain a fixed float.For issuing IFRSs responsible is - Correct Answer IASB The IFRS Foundation is - Correct Answer a non-for-profit private organisation working in the public interest. It is governed by a board of trustees who appoint members to the IASB, the IFRS Advisory Council and IFRS Intepretations Committee. It also oversees the regulatory system and raises the finance necessary to suppport it.IFRS are designed primarily for - Correct Answer profit-oriented entities.Two characteristics given in the Conceptual Framework for Financial Reporting are - Correct Answer completeness and neutrality The Conceptual Framework's definition of income is - Correct Answer "increases in economic benefits during the accounting period arising in the form of inflows or enhancements of assets or decreases of liabililities that result in increases in equity, other than those relating to contributions from equity participants' A credit sale meet this definition as it will increase profit and therefore retained earnings and equity. A revaluation of a property also meets this definition as it will be recorded in other comprehensive income and therefore increase the revaluation surplus and equity.However, a share issue is a contribution from equity participants and therefore does not the definition of an asset. Repayment of a loan results in a reduction in an asset (cash) and a liability (loan) rather than income.IASB Conceptual Framework's six qualitative characteristics of financial information are
- Correct Answer timeliness, verifiability, comparability, faithful representation, relavance
, understandability.Financial reporting is a way of - Correct Answer recording, analysing and summarising financial data 1 / 3
from 2005 in The uk ifrs is to be used for - Correct Answer consolidated statements if going concern assumption is not followed that fact must be disclosed together with the following information - Correct Answer - the basis on which the financial statements have been prepared
- the reasons why entity is not considered to be going concern
the conceptual framework states that qualitative characteristics are the attributes that make the information provided in financial statements useful to the user. the two fundamental characteristics are - Correct Answer relevance and faithful representation.enhancing qualitative characteristics are comparability, verifiability, timeliness and understandability.relevance - Correct Answer relevant financial information is capable of making a difference in the decisions made by users. financial information is capable of making a difference in decisions if it has predictive value, confirmation value or both to be a faithful representation information must be - Correct Answer complete, neutral and free from error Verifiability (def) - Correct Answer help assure users that information faithfully represents the economic phenomena it purports to represent. it means that different knowledgeable and independent observers could reach consensus although not necessarily complete agreement, that a particular depiction is a faithful representation.financial reports are prepared for users who have - Correct Answer a reasonable knowledge of business and economic activities and who review and analyse information diligently making an allowance for receivables is an example of which concept? - Correct Answer fair presentation, as it shows the likely recoverability of receivables remittance advice - Correct Answer a document sent to a supplier with a payment,detailing which invoices are being paid and which credit notes offset. a remittance advice allows the supplier to update the customer's records to show which invoices have been paid and which are still outstanding. it also confirms the amount being paid, so that any discrepancies can be easily identified and investigated A credit note is - Correct Answer a document relating to returned goods or refunds when a customer has been overcharged. it can be regarded as a negative invoice The drawing account is - Correct Answer an accounting record used in a business organized as a sole proprietorship or a partnership, in which is recorded all distributions made to the owners of the business. They are, in effect, "drawing" funds from the business 2 / 3
debit note is - Correct Answer a document sent by a customer in respect of goods returned or an overpayment made. it is a formal request for the supplier to issue a credit note.goods received notes(grns) - Correct Answer record a receipt most commonly in a warehouse. they may be used in addition to suppliers advice notes.most business keep petty cash on the premises, which is topped up from the main bank account. under the imprest system, the petty cash is - Correct Answer kept at an agreed sum so that each topping up is equal the amount paid out in the period ledger accounts sumarise - Correct Answer all the individual transactions listed in the books of prime entry the principal accounts are contained in a ledger called - Correct Answer the general or nominal ledger. the nominal ledger is an accounting record which summarises the financial affairs of the business drawings are - Correct Answer amounts taken out of a business by its owner. drawings are relevant in sole traderships and partnerships. in Ltd the owner ie shareholders are paid dividends.a payable is - Correct Answer a person or organisation to whom business owes money
A debit entry will: - Correct Answer increase an asset
decrease a liability increase an expense
A credit entry will: - Correct Answer decrease an asset
increase a liability increase income an increase in an expense (e.g. a purchase of stationery) or an increase in an asset (e.g. a purchase of office furniture ) is a - Correct Answer debit an increase in revenue (e.g. a sale) or an increase in a liability(e.g. buying goods on credit) is a - Correct Answer credit a decrease in an asset (e.g. making a cash payment )is a - Correct Answer credit the journal is - Correct Answer the record of prime entry for transactions which are not recorded in any of the other books of prime entry the journal keeps a record of unusual movement between accounts. it's used to record any double entries made which do not arise from the other books of prime entry,ie non- routine transactions. for example, journal entries are made when errors are discovered and need to be corrected.
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