Accounting for IGCSE & O level - Final Statements (Section 5)
1
What is the effect of closing inventory on the income statement?
إجابة
(A)
Decreases cost of goods sold
2
If a company has a lot of inventory, which could be one of the consequences?
إجابة
(C)
May become obsolete
3
What is the net realizable value?
إجابة
(B)
Estimated selling price less any additional costs
4
Which one reduces the owner's equity?
إجابة
(B)
Drawings
5
What are the most important financial statements?
إجابة
(D)
All of the above
6
What items will appear on a departmental income statement?
إجابة
A
B
C
7
What is the term for goods remaining at the end of the accounting period?
إجابة
(C)
Closing inventory
8
Which formula can be used to calculate profits or losses?
إجابة
(A)
Gross Profit - Total Expenses
9
What is the effect of purchase returns in the calculation of cost of goods sold?
إجابة
B
C
10
Which of the following is a measure of how quickly and easily current assets can be converted into cash?
إجابة
(B)
Liquidity
11
The statement of financial position is also known as?
إجابة
(A)
Balance sheet
12
Profit for the year will have which effect on the net assets and capital of the business?
إجابة
(B)
Increase both.
13
What is the book value equal to?
إجابة
(B)
Original price - accumulated depreciation
14
What is an example of non-current liability?
إجابة
(C)
Commercial Bank Loan
15
What is the difference between the assets and the liabilities?
إجابة
(A)
Owner's Equity
16
Which of the following is an example of an intangible asset?
إجابة
(C)
Goodwill
17
The rule for valuing inventories is that they should be valued at the lower of their cost or net realisable value. This rule is a practical application of which accounting principle?
إجابة
(C)
Prudence
18
What do we understand by 'Current Assets'?
إجابة
(C)
Those assets that will be used up relatively quickly within the next accounting year.
19
Which of the following are examples of non-current assets?
إجابة
A
C
20
Which of the following is a method to value inventory?
إجابة
(D)
All of the above
21
Where should be a single horizontal income statement be based?
إجابة
(B)
Business A and B
22
Which of the following is NOT a method of allocating expenses to different departments?
إجابة
(D)
Proportion to the bank loan
23
What do financial statements aim to present?
إجابة
(C)
A fair representation of a company's financial performance and position.
24
What impact do carriage inwards charges have on the cost of purchases?
إجابة
(B)
Increase the cost of purchases.
25
Where are sales revenues recorded?
إجابة
(B)
In the Income Statement
26
Which of the following is a characteristic of current assets?
إجابة
(B)
They are expected to be converted to cash within one year or the operating cycle, whichever is longer.
27
What is the second part of an income statement also known as?
إجابة
(B)
Profit and Loss Account
28
Which of these items would increase the net profit for the year?
إجابة
(C)
Decrease in expenses.
29
What does the term "net sales" mean?
إجابة
(A)
Gross sales minus sales returns and allowances.
30
What does "net sales" mean?
إجابة
(B)
Sales revenue less sales returns.
31
Which of the following is included in the cost of goods available for sale?
إجابة
(B)
Opening inventory
32
How do drawings affect capital?
إجابة
(B)
Decrease capital
33
Which of the following is typically NOT considered an asset?
إجابة
(D)
Accounts payable
34
Which of the following would increase the owner's equity?
إجابة
(C)
Profit
35
Which is an example of an expense?
إجابة
(B)
Salary
36
When is it wise to sell non-current assets?
إجابة
(D)
All of the above
37
Which of the following would decrease owner's equity?
إجابة
(C)
Withdrawals by the owner.
38
Which of the following will the business need to include in the income statement?
إجابة
A
B
C
39
What is the main purpose of a profit and loss account?
إجابة
(B)
To calculate profit for the year.
40
Which of the following is an example of a running cost or expense?
إجابة
(C)
Advertising and Marketing Costs
41
What impact does profit have on the capital account?
إجابة
(B)
Increases capital
42
Which accounting principle is being applied by valuing inventories at the lower of their cost or net realisable value?
إجابة
(C)
Conservatism
43
What can the analysis of a departmental income statement identify?
إجابة
A
B
C
44
Which account(s) will be used to determine the gross profit?
إجابة
A
B
45
How can the business increase its profit?
إجابة
(B)
By increasing their selling prices.
46
Which of the following is an example of a current asset?
إجابة
(C)
Accounts Receivable
47
What is the relationship between assets, liabilities, and owner's equity?
إجابة
(A)
Assets = Liabilities + Owner's Equity
48
What impact would a business buying stock have on its working capital?
إجابة
(C)
No impact
49
What is a bank overdraft classified as in the statement of financial position?
إجابة
(C)
Current liability
50
What does the text state is the result of the three different inventory valuation methods?
