2015-08-21
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1. The main aim of accounting is to
A maintain ledger accounts for every asset and liability
B provide financial information to users of such information
C produce a trial balance
D record every financial transaction individually.
2. If the owner of a business takes goods from inventory for his own personal use, the accounting concept to be considered is the
A prudence concept
B going concern concept
C unit of measurement concept
D business entity concept.
3. The main aim of financial accounting is to
A record all transactions in the books of account
B provide management with detailed analyses of costs
C present the financial results of the organization by means of recognized statements
D calculate profit.
4. Financial accounts differ from management accounts in that they
A are prepared monthly for internal control purposes
B contain details of costs incurred in manufacturing
C are summarized and prepared mainly for external users of accounting information
D provide information to enable the trial balance to be prepared.
5. The historical cost concept
A records transactions from past years
B fails to take account of changing price levels over time
C values assets at their cost to the business, irrespective of any depreciation or other loss in value
D is no longer used in modern accounting systems.
6. A “true and fair view” is one which
A presents the accounts in such a way as to exclude errors which would affect the actions of those reading them
B occurs when the accounts have been audited
C shows the accounts of an organization in an understandable format
D shows the assets on the balance sheet at their current market price.
7. Your company auditor insists that it is necessary to record items of plant separately and to depreciate them over several years, but that items of office equipment, such as hand-held stapling machines, can be grouped together and written off against profits immediately. The main reason for this difference in treatment between the two items is because
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A treatment of the two items must be consistent with treatment in previous periods
B items of plant last for several years, whereas hand-held stapling machines last only for months
C hand-held stapling machines are not regarded as material items
D items of plant are revalued from time to time, whereas hand-held stapling machines are recorded at historical cost.
8. What is the role of the International Accounting Standards Board?
A To review company accounts and follow up companies in breach of accounting standards
B To oversee the setting of accounting standards and ensure adherence to them
C To review company accounts and encourage companies to follow accounting standards.
D To issue International Accounting Standards.
