Tag: Accounting Concepts

Accounting Multiple Choice Question – 12 January 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Which of the following is the best description of fair presentation in accordance with IAS 1 Presentation of Financial Statements?

Select ONE answer:

  1. The financial statements are accurate
  2. The financial statements are as accurate as possible given the accounting systems of the organisation
  3. The directors of the company have stated that the financial statements are accurate and correctly prepared
  4. The financial statements are reliable in that they reflect the effects of transactions, other events and conditions

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct

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

Accounting Multiple Choice Question – 11 January 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Listed below are two comments on accounting conventions.

  1. According to the lASB’s Conceptual Framework, financial information must be either relevant or faithfully represented if it is to be useful.
  2. Materiality means that only items having a physical existence may be recognised as assets.

Which, if either, of these comments is correct?

Select ONE answer:

  1. 1 only
  2. 2 only
  3. Both of them
  4. Neither of them

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct -Information must be both relevant and faithfully represented to be useful and Materiality concerns whether an item in the financial statements can influence users’ decisions; there is no absolute amount that makes an item material.

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

Accounting Multiple Choice Question – 10 January 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Which of the following statements about accounting concepts and the characteristics of financial information is correct?

Select ONE answer:

  1. Financial statements are required to give a true and fair view. These terms have clear definitions which are included in IAS1
  2. The historical cost concept means that only items capable of being measured in monetary terms can be recognised in financial statements
  3. It may sometimes be necessary to exclude information that is relevant and reliable from financial statements because it is too difficult for some users to understand
  4. A specific disclosure requirement of an IAS1 need not be satisfied if the information is immaterial

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct – While financial statements are required to give a true and fair view, these terms are not defined in statute, they tend to be determined in courts of law or on the facts (1). Recognition of items based on monetary amounts is the money measurement concept, not the historical cost concept (2). Items should not be excluded because of being difficult to understand (3).

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

Accounting Multiple Choice Question – 9 January 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

The accounting principle which, in times of rising prices, tends to understate asset values and overstate profits, is?

Select ONE answer:

  1. Going concern
  2. Accruals
  3. Consistency
  4. Historical cost

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct- Profit will be overstated due to depreciation based on understated assets, and cost of sales based on understated inventory.

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

Accounting Multiple Choice Question – 2 January 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Which of the following is an aspect of relevance, according to the IASB’s Conceptual Framework?

Select ONE answer:

  1. Neutrality
  2. Free from error
  3. Completeness
  4. Materiality

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct

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