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CA Foundation Accounting Concepts — practice questions — page 2

Explore 98 free Accounting Concepts questions in CA Foundation Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Accounting Concepts questions and exercises with answers

Showing questions 31–60 of 98.

Joint-stock companies split accounting intoRead the answer and worked solution →Local English professional bodies merged to form the ICAEW in which year?Read the answer and worked solution →Under accrual accounting, revenues and expenses are recognised whenRead the answer and worked solution →The cash basis of accounting records income and expenses whenRead the answer and worked solution →Under the matching principle, an expense is reported in the period whenRead the answer and worked solution →A prepaid expense is treated asRead the answer and worked solution →With no link to revenue, a cost like administration isRead the answer and worked solution →An advance for goods yet to be delivered is shown asRead the answer and worked solution →Income that has been earned but not yet received is calledRead the answer and worked solution →Rent for days already occupied, but billed after year end, should beRead the answer and worked solution →Revenue from selling inventory is usually recognised at theRead the answer and worked solution →How many steps are there in the converged ASC 606 and IFRS 15 revenue model?Read the answer and worked solution →In the five-step revenue model, revenue is finally recognised whenRead the answer and worked solution →The going concern assumption presumes a business will continue for theRead the answer and worked solution →Compared with its breakup value, the value of an entity assumed to be a going concern is usuallyRead the answer and worked solution →If an entity's liquidation becomes imminent, its statements are prepared on which basis?Read the answer and worked solution →The going concern principle allows a firm toRead the answer and worked solution →For the going concern assumption, the foreseeable future is usually regarded as at least the nextRead the answer and worked solution →Employee skill levels are not recorded in the books because theyRead the answer and worked solution →Ignoring inflation in the books rests on the assumption thatRead the answer and worked solution →Under historical cost accounting, an asset is recorded at itsRead the answer and worked solution →A machine bought for Rs 100000 is worth Rs 120000 at year end. Under historical cost it is carried atRead the answer and worked solution →A machine costing Rs 100000 (worth Rs 120000 at year end) sells next year for Rs 115000. Gain?Read the answer and worked solution →Closing stock in the balance sheet is valued atRead the answer and worked solution →When the net realisable value of stock falls below cost, the fall isRead the answer and worked solution →A rise in the realisable value of stock above its cost isRead the answer and worked solution →Which IFRS standard deals with financial reporting in hyperinflationary economies?Read the answer and worked solution →Leaving out a trivial expense that would not change users' decisions is justified by the concept ofRead the answer and worked solution →An item is regarded as material when its error or omissionRead the answer and worked solution →Following the same accounting methods from year to year supportsRead the answer and worked solution →

Worked practice questions

Joint-stock companies split accounting into

  1. Financial and management accounting
  2. Cash and accrual accounting
  3. Tax and audit accounting
  4. Manual and computerised accounting
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Correct answer: A. Financial and management accounting

Separation of ownership from management created outside investors needing reports and managers needing internal data.

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Local English professional bodies merged to form the ICAEW in which year?

  1. 1844
  2. 1880
  3. 1913
  4. 1949
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Correct answer: B. 1880

The Institute of Chartered Accountants in England and Wales was formed in 1880 by merging local bodies.

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Under accrual accounting, revenues and expenses are recognised when

  1. cash is received or paid
  2. the books are audited
  3. they are earned or incurred
  4. the tax return is filed
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Correct answer: C. they are earned or incurred

Accrual accounting ties recognition to earning and incurring, not to the movement of cash.

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More Accounting topics

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