Principles of Accounting - ATT – CBE
Exam QUESTIONS AND CORRECT
ANSWERS
Income received in advance (deferred income) does what to the profit for the year? - CORRECT
ANSWER decreases it
A prepayment will do what to the profit for the year? - CORRECT ANSWER increases it
Development expenditure will always be capitalised in the accounts - CORRECT
ANSWER false
Research expenditure will never be capitalise in the accounts - CORRECT ANSWER true
A capital grant should be recognised when the asset it is subsidising is purchased under the accrual
model - CORRECT ANSWER false
A capital grant should initially be recognised as deferred income under the accrual model -
CORRECT ANSWER true
An increase in closing stock will do what to the gross profit and net assets of a business? - CORRECT
ANSWER increase it
When is the 'going concern' of a company assessed from? - CORRECT ANSWER 12 months
from the date of the accounts
A provision should be recognised when an outflow of economic benefits is possible - CORRECT
ANSWER true
a contingent liability is only ever disclosed, never recognised - CORRECT ANSWER false
, a contingent asset should be recognised when an inflow of economic benefit is probable - CORRECT
ANSWER false
a contingent liability is not disclosed if there is only a remote chance that it will lead to outflow of
economic benefit - CORRECT ANSWER true
Does Share capital appear in a company's financial statements, sole trader's account or either -
CORRECT ANSWER company
Does accrued interest appear in a company's financial statements, sole trader's account or either -
CORRECT ANSWER either
overprovision for corporation tax in the previous period goes on which side of the Corporation tax
creditor T account? - CORRECT ANSWER debit
Corporation tax paid goes on which side of the Corporation Tax creditor T account? - CORRECT
ANSWER Debit
Corporation tax charge for the current period goes on which side of the Corporation Tax creditor T
account? - CORRECT ANSWER Credit
Companies withhold basic rate income tax when making which payments to individuals? -
CORRECT ANSWER Interest and royalties
Net Cash from Operating activities - Depreciation is ... - CORRECT ANSWER added back
Net Cash from Operating activities - Increase in debtors is... - CORRECT ANSWER deducted
The trial balance is not used to... - CORRECT ANSWER present results to the owners and
make business decisions
Capital balance = - CORRECT ANSWER assets - liabilities + profit
Exam QUESTIONS AND CORRECT
ANSWERS
Income received in advance (deferred income) does what to the profit for the year? - CORRECT
ANSWER decreases it
A prepayment will do what to the profit for the year? - CORRECT ANSWER increases it
Development expenditure will always be capitalised in the accounts - CORRECT
ANSWER false
Research expenditure will never be capitalise in the accounts - CORRECT ANSWER true
A capital grant should be recognised when the asset it is subsidising is purchased under the accrual
model - CORRECT ANSWER false
A capital grant should initially be recognised as deferred income under the accrual model -
CORRECT ANSWER true
An increase in closing stock will do what to the gross profit and net assets of a business? - CORRECT
ANSWER increase it
When is the 'going concern' of a company assessed from? - CORRECT ANSWER 12 months
from the date of the accounts
A provision should be recognised when an outflow of economic benefits is possible - CORRECT
ANSWER true
a contingent liability is only ever disclosed, never recognised - CORRECT ANSWER false
, a contingent asset should be recognised when an inflow of economic benefit is probable - CORRECT
ANSWER false
a contingent liability is not disclosed if there is only a remote chance that it will lead to outflow of
economic benefit - CORRECT ANSWER true
Does Share capital appear in a company's financial statements, sole trader's account or either -
CORRECT ANSWER company
Does accrued interest appear in a company's financial statements, sole trader's account or either -
CORRECT ANSWER either
overprovision for corporation tax in the previous period goes on which side of the Corporation tax
creditor T account? - CORRECT ANSWER debit
Corporation tax paid goes on which side of the Corporation Tax creditor T account? - CORRECT
ANSWER Debit
Corporation tax charge for the current period goes on which side of the Corporation Tax creditor T
account? - CORRECT ANSWER Credit
Companies withhold basic rate income tax when making which payments to individuals? -
CORRECT ANSWER Interest and royalties
Net Cash from Operating activities - Depreciation is ... - CORRECT ANSWER added back
Net Cash from Operating activities - Increase in debtors is... - CORRECT ANSWER deducted
The trial balance is not used to... - CORRECT ANSWER present results to the owners and
make business decisions
Capital balance = - CORRECT ANSWER assets - liabilities + profit
