ICAEW ACA ACCOUNTING EXAM (LATEST 2026 UPDATE) FAST
REVIWED FROM ACTUAL TEST 100 QUESTIONS AND 100%
VERIFIED ANSWERS| A+ GRADE
Examining Board Test Area
Table of Contents
1 Financial Reporting Framework
2 Preparation of Financial Statements
3 Adjustments and Corrections
4 Inventory and Cost of Sales
5 Non-current Assets
6 Revenue Recognition
7 Accruals and Prepayments
8 Provisions and Contingencies
9 Errors and Suspense Accounts
10 Cash Flow Basics
11 Partnership Accounts
12 Company Accounts Introduction
Instructions
Answer all questions. Each question requires a direct word answer followed by a
brief explanation.
Questions
1 The accounting concept that assumes a business will continue operating into the
foreseeable future is known as what
✔ going concern
This assumes the entity has no intention or need to liquidate.
, 2 The principle that revenue is recognized when earned is called what
✔ accrual
Revenue is recorded when it is earned, not when cash is received.
3 What is the term for the excess of assets over liabilities
✔ equity
Equity represents the owner’s residual interest in the business.
4 The cost of goods sold is calculated as opening inventory plus purchases minus
what
✔ closing inventory
Closing inventory is deducted to arrive at cost of goods sold.
5 An expense paid in advance is classified as what
✔ prepayment
It represents a future economic benefit.
6 Income received but not yet earned is called what
✔ deferred income
It is a liability until earned.
7 Depreciation is an example of what type of adjustment
✔ non-cash
No cash movement occurs, only allocation of cost.
8 The double entry for a credit sale is debit receivables and credit what
✔ revenue
Revenue increases while receivables record the amount owed.
9 The matching principle relates expenses with what
✔ revenue
Expenses are matched to the income they help generate.
10 Inventory is valued at lower of cost and what
✔ net realisable value
NRV reflects expected selling price less costs to sell.
REVIWED FROM ACTUAL TEST 100 QUESTIONS AND 100%
VERIFIED ANSWERS| A+ GRADE
Examining Board Test Area
Table of Contents
1 Financial Reporting Framework
2 Preparation of Financial Statements
3 Adjustments and Corrections
4 Inventory and Cost of Sales
5 Non-current Assets
6 Revenue Recognition
7 Accruals and Prepayments
8 Provisions and Contingencies
9 Errors and Suspense Accounts
10 Cash Flow Basics
11 Partnership Accounts
12 Company Accounts Introduction
Instructions
Answer all questions. Each question requires a direct word answer followed by a
brief explanation.
Questions
1 The accounting concept that assumes a business will continue operating into the
foreseeable future is known as what
✔ going concern
This assumes the entity has no intention or need to liquidate.
, 2 The principle that revenue is recognized when earned is called what
✔ accrual
Revenue is recorded when it is earned, not when cash is received.
3 What is the term for the excess of assets over liabilities
✔ equity
Equity represents the owner’s residual interest in the business.
4 The cost of goods sold is calculated as opening inventory plus purchases minus
what
✔ closing inventory
Closing inventory is deducted to arrive at cost of goods sold.
5 An expense paid in advance is classified as what
✔ prepayment
It represents a future economic benefit.
6 Income received but not yet earned is called what
✔ deferred income
It is a liability until earned.
7 Depreciation is an example of what type of adjustment
✔ non-cash
No cash movement occurs, only allocation of cost.
8 The double entry for a credit sale is debit receivables and credit what
✔ revenue
Revenue increases while receivables record the amount owed.
9 The matching principle relates expenses with what
✔ revenue
Expenses are matched to the income they help generate.
10 Inventory is valued at lower of cost and what
✔ net realisable value
NRV reflects expected selling price less costs to sell.
