Month: May 2019

An accounting period is…?

Select ONE answer:

1. any period for which an entity chooses to prepare its accounts.
2. a calendar year.
3. any twelve-month period.
4. None of the above.

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. An accounting period may be but does not have to be, a calendar year.
3. An accounting period can be of any duration. However, for tax purposes, as opposed to accounting purposes, accounts must be prepared for periods not exceeding 12 months.
4. Not correct

 

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The accruals concept…?

Select ONE answer:

1. applies to revenues and expenses only.
2. applies to assets and liabilities only.
3. applies to revenues, expenses, assets, and liabilities.
4. is not a fundamental accounting concept.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 3

1. It is true that the accruals concept applies to revenues and expenses but not exclusively so – it also applies to assets and liabilities.
2. It is true that the accruals concept applies to assets and liabilities but not exclusively so – it also applies to revenues and expenses.
3. Correct
4. The accruals concept is one of the fundamental accounting concepts, that is, those concepts referred to in SSAP 2.

 

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The effect of the accruals concept is that …?

Select ONE answer:

1. similar items should be accounted for in a similar way from one accounting period to the next.
2. revenue and profit should not be anticipated.
3. net profit is the difference between revenues and expenses.
4. None of the above.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 3

1. is the consistency concept.
2. is one aspect of the prudence concept. The other aspect is that losses should be provided for as soon as they are foreseen.
3. Correct
4. Not correct.

 

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The entity concept means that…?

Select ONE answer:

1. because a firm is separate and distinct from its owners, those owners cannot have access to its assets unless the firm ceases to trade.
2. accounts must be prepared for every firm.
3. the financial affairs of a firm and its owner(s) are always kept separate for the purpose of preparing accounts.
4. None of the above.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 3

1. A sole trader has access to the assets of his business. He can withdraw cash, stock, etc. These withdrawals are shown in his accounts as drawings.
2. Although it is true that accounts have to be prepared for every firm — for example. for tax purposes, this 1’s not because of the entity concept.
3. Correct
4. Not correct.

 

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The going concern concept means that when preparing accounts…?

Select ONE answer:

1. profit should not be anticipated and losses should be provided for as soon as they are foreseen.
2. items should normally be accounted for in a manner consistent with the way in which they were accounted for in previous years.
3. unless there is specific information to the contrary, the firm for which the accounts are being prepared should be assumed to continue in operational existence for the foreseeable future at a level of activity not significantly less than the current level of activity.
4. revenues and costs are recognised as they are earned or incurred, not as money is received or paid.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 3

1. is the prudence concept.
2. is the consistency concept.
3. Correct
4. is the accruals concept.

 

This work is licensed under a Creative Commons Attribution 4.0 International License.