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ICAEW ACA — free MCQ practice

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ICAEW ACA subjects

Accounting (30)

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AccountingFinancial ReportingFinancial Statements

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An owner pays for a family holiday from her own pocket. That payment stays out of the business records under the business:Read the answer and worked solution →A single individual runs a bakery with no partners and no shares issued. That structure is a:Read the answer and worked solution →Two friends pool money and skills to run a design studio as co-owners. That structure is a:Read the answer and worked solution →A company collapses owing money, yet its shareholders lose only what they invested. That protection is called:Read the answer and worked solution →

Worked practice questions

An owner pays for a family holiday from her own pocket. That payment stays out of the business records under the business:

  1. Entity concept
  2. Equity concept
  3. Escrow concept
  4. Expense concept
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Correct answer: A. Entity concept

1. Business records are meant to show the business alone. 2. A private holiday is the owner's affair, not the firm's trading. 3. The business entity concept keeps it out of the books. _Source: OpenStax Principles of Financial Accounting, Chapter 2, Introduction to Financial Statements._

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A single individual runs a bakery with no partners and no shares issued. That structure is a:

  1. Sole partnership
  2. Sole proprietorship
  3. Sole subscription
  4. Sole underwriting
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Correct answer: B. Sole proprietorship

1. Ownership rests with exactly one person. 2. No co-owners and no shareholders are involved. 3. That structure is a sole proprietorship. _Source: OpenStax Principles of Financial Accounting, Chapter 2, Introduction to Financial Statements._

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Two friends pool money and skills to run a design studio as co-owners. That structure is a:

  1. Partnership
  2. Proprietary
  3. Prospectus
  4. Preference
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Correct answer: A. Partnership

1. Two or more people contribute and share the ownership. 2. That is the defining shape of the arrangement. 3. The studio is a partnership. _Source: OpenStax Principles of Financial Accounting, Chapter 2, Introduction to Financial Statements._

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