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