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AP Intermediate 1st Year Introduction to Accounting & Recording Transactions — practice questions — page 2

Explore 45 free Introduction to Accounting & Recording Transactions questions in AP Intermediate 1st Year Accountancy. Open each question or exercise to read its content, reference answers and available explanation.

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Introduction to Accounting & Recording Transactions questions and exercises with answers

Showing questions 31–45 of 45.

When is an expense recognised under the matching concept?Read the answer and worked solution →Salaries, rent and insurance are recognised on what basis?Read the answer and worked solution →How is the depreciation of a fixed asset charged under matching?Read the answer and worked solution →To work out profit for a year, which cost of goods is matched with sales?Read the answer and worked solution →Which concept requires all material and relevant facts to be disclosed?Read the answer and worked solution →Prescribed formats for company profit and loss account and balance sheet support which concept?Read the answer and worked solution →Which regulator mandates complete disclosures by listed companies?Read the answer and worked solution →Which concept needs the same accounting policies used from year to year?Read the answer and worked solution →If depreciation methods differ between two years, what is lost?Read the answer and worked solution →Does consistency prohibit a change in accounting policy?Read the answer and worked solution →Conservatism, also called prudence, is based on which policy?Read the answer and worked solution →How does conservatism treat expected gains and possible losses?Read the answer and worked solution →Stock costing Rs 40,000 has a market value of Rs 35,000. At what value is closing stock shown?Read the answer and worked solution →Which is an application of the conservatism concept?Read the answer and worked solution →Overstating profits may lead to what harmful result?Read the answer and worked solution →

Worked practice questions

When is an expense recognised under the matching concept?

  1. When the year begins
  2. When the bill is printed
  3. When it helps earn revenue
  4. When cash is paid out
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Correct answer: C. When it helps earn revenue

Expenses follow use of the asset or service in generating revenue, not the payment date.

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Salaries, rent and insurance are recognised on what basis?

  1. The end of the year
  2. Period they relate to
  3. The date of the invoice
  4. The date of payment
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Correct answer: B. Period they relate to

They are charged to the period they relate to, whether or not they have been paid.

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How is the depreciation of a fixed asset charged under matching?

  1. Fully in the last year
  2. Spread over the years of use
  3. Fully in the first year
  4. Only when it is sold
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Correct answer: B. Spread over the years of use

The asset helps earn revenue over several years, so its cost is divided across them.

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