FAC1601 PREPARATION TEST 2026 QUESTIONS AND CORRECT ANSWERS GRADED A+

FAC1601 CERTIFICATION PAPER 2026
FULL SOLUTION GRADED A+

● IAS. Answer: International Accounting Standards


● APB. Answer: Accounting Practices Board


● FRSC. Answer: Financial Reporting Standards Council


● SAICA. Answer: South African Institute of Chartered Accountants.


● Purpose of Conceptual Framework Overview. Answer: Develop
future accounting standards; keeps legislation standardized and reduces
number of alternative accounting treatments; foundation of all IFRS;
guides accounting standards, policies and interpretation


● Objective of Conceptual Framework. Answer: Provide financial info
for investors, lenders, creditors to make resource allocation decisions


● Qualitative Characteristics of Useful Financial Information. Answer:
Relevance: Info must influence decisions (materiality is key).
Faithful Representation: Info must reflect substance, not just legal form;
must be complete, neutral, and free from error.

, ● Enhancing. Answer: Comparability, verifiability, timeliness, and
understandability


● Assets. Answer: Present economic resources controlled by the entity
due to past events.


● Liabilities. Answer: Present obligations to transfer resources due to
past events.


● Equity. Answer: Residual interest after deducting liabilities from
assets.


● Income. Answer: Increases in assets/decreases in liabilities (excluding
owner contributions).


● Expenses. Answer: Decreases in assets/increases in liabilities
(excluding distributions to owners).


● Recognition criteria. Answer: a. They meet the definition (asset,
liability, etc.)
b. Future economic benefits probable.
c. Amount can be reliably measured.