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