Principles of Accounting - ATT – CBE
Questions and Guide Answers
100% Verified Graded A+
1. Income received in advance (deferred income) does what to the profit for
the year?
Answer: decreases it
2. A prepayment will do what to the profit for the year?
Answer: increases it
3. Development expenditure will always be capitalised in the accounts
Answer: false
4. Research expenditure will never be capitalise in the accounts
Answer: true
5. A capital grant should be recognised when the asset it is subsidising is
,purchased under the accrual model
Answer: false
6. A capital grant should initially be recognised as deferred income under the
accrual model
Answer: true
7. An increase in closing stock will do what to the gross profit and net assets of
a business?
Answer: increase it
8. When is the 'going concern' of a company assessed from?
Answer: 12 months from the date of the accounts
9. A provision should be recognised when an outflow of economic benefits is
possible
Answer: true
10. a contingent liability is only ever disclosed, never recognised
Answer: false
11. a contingent asset should be recognised when an inflow of economic ben-
efit is probable
Answer: false
12. a contingent liability is not disclosed if there is only a remote chance that it
, will lead to outflow of economic benefit
Answer: true
13. Does Share capital appear in a company's financial statements, sole trad-
er's account or either
Answer: company
14. Does accrued interest appear in a company's financial statements, sole
trader's account or either
Answer: either
15. overprovision for corporation tax in the previous period goes on which side
of the Corporation tax creditor T account?
Answer: debit
16. Corporation tax paid goes on which side of the Corporation Tax creditor T
account?
Answer: Debit
17. Corporation tax charge for the current period goes on which side of the
Corporation Tax creditor T account?
Answer: Credit
18. Companies withhold basic rate income tax when making which payments to
individuals?
Questions and Guide Answers
100% Verified Graded A+
1. Income received in advance (deferred income) does what to the profit for
the year?
Answer: decreases it
2. A prepayment will do what to the profit for the year?
Answer: increases it
3. Development expenditure will always be capitalised in the accounts
Answer: false
4. Research expenditure will never be capitalise in the accounts
Answer: true
5. A capital grant should be recognised when the asset it is subsidising is
,purchased under the accrual model
Answer: false
6. A capital grant should initially be recognised as deferred income under the
accrual model
Answer: true
7. An increase in closing stock will do what to the gross profit and net assets of
a business?
Answer: increase it
8. When is the 'going concern' of a company assessed from?
Answer: 12 months from the date of the accounts
9. A provision should be recognised when an outflow of economic benefits is
possible
Answer: true
10. a contingent liability is only ever disclosed, never recognised
Answer: false
11. a contingent asset should be recognised when an inflow of economic ben-
efit is probable
Answer: false
12. a contingent liability is not disclosed if there is only a remote chance that it
, will lead to outflow of economic benefit
Answer: true
13. Does Share capital appear in a company's financial statements, sole trad-
er's account or either
Answer: company
14. Does accrued interest appear in a company's financial statements, sole
trader's account or either
Answer: either
15. overprovision for corporation tax in the previous period goes on which side
of the Corporation tax creditor T account?
Answer: debit
16. Corporation tax paid goes on which side of the Corporation Tax creditor T
account?
Answer: Debit
17. Corporation tax charge for the current period goes on which side of the
Corporation Tax creditor T account?
Answer: Credit
18. Companies withhold basic rate income tax when making which payments to
individuals?
