Question Tag: Accounting principles

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AAA – Nov 2011 – L3 – SAII – Q15 – Audit of Complex Entities

Definition of consistency in using accounting principles for comparability.

Question

The use of the same accounting principles from year to year so that the successive financial statements issued by a business entity will be comparable is known as…………………….

Answer

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Tags: Accounting principles, Comparability, Consistency, Financial Statements
Level: Level 3

Topic: Audit of Complex Entities
Series: NOV 2011

FR – Nov 2022 – L2 – Q7a – Conceptual Framework Purposes

Short Summary: Summarize the six primary purposes of IASB's Conceptual Framework in international standards development.

Question

Briefly explain SIX purposes of the Conceptual Framework of the International Accounting Standard Board (IASB). (9 Marks)

Answer

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Tags: Accounting principles, Conceptual Framework, Financial Standards, IASB
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: NOV 2022

FA – Nov 2020 – L1 – SA – Q1 -Trial Balance: Usefulness and Limitations

Identifies an item not found on the debit column of a trial balance.

Question

Which of the following items is NOT found on the debit column of a trial balance?
A. Capital
B. Motor vehicle
C. Rent and rates
D. Salaries and wages
E. Postage and stationery

Answer

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Tags: Accounting principles, Financial Statements, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2020

PM – May 2019 – L2 – Q6 – Strategic Management Accounting

Discusses the essential qualities needed for management accounting information to be useful for decision-making.

Question

“The purpose of management accounting is to provide relevant and reliable information so that managers can make well-informed decisions. The value of management accounting, therefore, depends on the quality of the information provided and whether this information helps managers to make better decisions.” Therefore, before management accounting information can be useful to managers, it must possess some qualities.

Required:
Discuss the essential qualities of good management accounting information.

Answer

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Tags: Accounting principles, Decision Making, Information Quality, Management Accounting
Level: Level 2

Topic: Strategic Management Accounting
Series: MAY 2019

FA – Nov 2013 – L1 – SB – Q1b – Accounting Concepts

Listing and benefits of accounting concepts.

Question

List any SIX accounting concepts and state their benefits.

Answer

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Tags: Accounting Concepts, Accounting principles, Benefits of Accounting Concepts, Financial Reporting
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2013

FA – Nov 2013 – L1 – SB – Q1a – Accounting Concepts

Definition of accounting concepts.

Question

Define accounting concepts.

Answer

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Tags: Accounting Concepts, Accounting principles, Financial Reporting
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q6 – Regulatory Environment of Accounting

Understanding what GAAP refers to.

Question

The “generally accepted accounting practice” (GAAP) refers to:

A. Complete set of regulations from all sources together with any general accounting principles and conventions
B. Only the principles and conventions that are enshrined in companies’ legislations
C. The accounting regulations which apply to large companies
D. Financial accounting which is concerned with reporting financial results in aggregates to a variety of users
E. Legislation which generally sets out the broad rules with which companies must comply when preparing financial statements

Answer

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Tags: Accounting principles, Accounting Standards, GAAP
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q1 – Financial Statements Preparation

Determining the total cost for equipment recognition.

Question

Fred Manufacturing Enterprise purchased equipment for N150,000. The equipment was transported at a cost of N15,000 and installed at a cost of N7,500. The employees were trained in the use of the equipment at a cost of N50,000.

At what cost will the equipment be recognised in the books of account?

A. N150,000
B. N157,500
C. N165,000
D. N172,500
E. N222,500

Answer

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Tags: Accounting principles, Asset Valuation, Cost Accounting, Equipment
Level: Level 1

Topic: Financial Statements Preparation
Series: NOV 2013

FA – Nov 2015 – L1 – SA – Q20 – Accounting Treatment for Accruals and Prepayments

This question calculates the total rent expense to be charged to the profit or loss statement for the year.

Question

The information below relates to the accounting period ended December 31, 2013.
N
Prepaid rent brought forward: 22,000
Rent paid during the period: 216,000
Accrued rent carried forward: 26,000

In line with the accrual concept, what should be the amount of rent to be charged to the statement of profit or loss in the year ended December 31, 2013?
A. N264,000
B. N242,000
C. N238,000
D. N216,000
E. N48,000

Answer

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Tags: Accounting principles, Accruals, Rent Expense
Level: Level 1

Topic: Accruals and Prepayments
Series: NOV 2015

FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)

This question identifies which cost should not be included in the initial measurement of property, plant, and equipment.

Question

Which of the following costs should NOT be included in the initial measurement of property, plant and equipment?
A. Purchase price
B. Site preparation cost
C. Professional fees
D. Installation cost
E. Site administration and general overhead costs

Answer

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Tags: Accounting principles, Initial Measurement, Plant and Equipment, Property
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2015

FA – Nov 2022 – L1 – SA – Q2 – Accounting Concepts

Identify the correct accounting principle.

Question

Which of the following is a correct accounting principle?
A. Revenue should be supported by owners’ capital
B. There should be a balance in the payables’ account in order to measure total assets
C. Where payables account is zero, the assets are equal to the owner’s equity
D. Total liabilities and equity are equal
E. Total assets can be less than liabilities and equity

Answer

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Tags: Accounting principles, Concepts, Financial Reporting

Topic: Accounting Concepts
Series: NOV 2022

FA – May 2021 – L1 – SA – Q4 – Double-Entry Accounting Principles

Identify the correct statement regarding cash discount.

Question

Which of the following is CORRECT in respect of cash discount?
A. Discount allowed is a deduction from trade payables
B. Discount received is a deduction from sales
C. Discount columns in cash book form part of the double entry
D. The total amount of discount on the debit side of cash book is an income
E. The total amount of discount on the credit side of cash book is discount received

Answer

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Tags: Accounting principles, Cash discount, Double Entry
Level: Level 1

Topic: Double-Entry Accounting Principles
Series: MAY 2021

FA – Nov 2023 – L1 – SA – Q16 – Recording Financial Transactions

Describe the treatment of bank accounts and cash balances.

Question

Which of the following statements correctly describe the treatment of bank accounts and cash balances from the perspective of both the company and the bank?

A. For the company, money in the bank is an asset, and for the bank, deposits are liabilities
B. For the company, money in the bank is a liability, and for the bank, deposits are assets
C. For the company, an overdraft balance is a liability, and for the bank, overdrafts are income
D. For the company, an overdraft balance is an asset, and for the bank, overdrafts are liabilities
E. For the company, money in the bank is an asset, and for the bank, deposits are expenses

Answer

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Tags: Accounting principles, Bank Accounts, Cash Balances
Level: Level 1

Topic: Recording Financial Transactions
Series: NOV 2023

FA – Nov 2023 – L1 – SA – Q10 – Bases of Accounting: Accrual and Cash

Identify the correct description of the cash basis of accounting.

Question

Which of the following statements correctly describes cash basis of accounting?

A. Revenue is recognised in the period when it is earned, regardless of when the cash is received
B. Expenses are recognised in the period when they are incurred, regardless of when they are paid
C. Revenue is recognised in the period when the cash is received, regardless of when it is earned
D. Expenses are recognised in the period when they are earned, regardless of when they are incurred
E. Both revenue and expenses are recognised in the period when they are occurred, regardless of cash transactions

Answer

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Tags: Accounting principles, Cash Basis, Revenue Recognition
Level: Level 1

Topic: Bases of Accounting: Accrual vs. Cash
Series: NOV 2023

FA – May 2021 – L1 – SA – Q2 – Accounting Concepts

Identifies the principle applied when inventory is recognized at net realizable value.

Question

Inventories are recognised at the net realisable value when this is lower than the cost price in order to satisfy the ……….. principle.

A. Matching
B. Prudence
C. Accrual
D. Periodicity
E. Realisation

Answer

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Tags: Accounting principles, Financial Reporting, Inventory, Prudence
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2021

FA – May 2023 – L1 – SA – Q16 – Qualitative Characteristics of Useful Financial Information

Identifying the accounting principle that requires financial information to be supported by evidence.

Question

The accounting principle that requires financial statements information to be supported by evidence other than someone’s opinion or imagination is known as:

A. Consistency

B. Prudence

C. Accrual

D. Aggregation

E. Objectivity

Answer

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Tags: Accounting principles, Evidence-based Information, Objectivity
Level: Level 1

Topic: Qualitative Characteristics of Useful Financial Information
Series: MAY 2023

FA – May 2023 – L1 – SA – Q4 – Double-Entry Accounting Principles

Identifying the correct expression of the double entry rule.

Question

Double entry rule is expressed as

A. Debit the receiver, credit the giver

B. Debit the giver, credit the receiver

C. Debit the receiver, credit the bank/cash account

D. Debit the bank/cash account, credit the giver

E. Debit the amount paid, credit the amount received

Answer

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Tags: Accounting principles, Double Entry
Level: Level 1

Topic: Double-Entry Accounting Principles
Series: MAY 2023

BMF – Nov 2019 – L1 – SA – Q7 – The Role of Professional Accountants in Business and Society

Identifying the principle that is not a fundamental requirement for professional accountants

Question

Professional accountants are required to comply with the following fundamental principles EXCEPT:
A. Integrity
B. Efficiency
C. Objectivity
D. Competence
E. Confidentiality

Answer

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Tags: Accounting principles, Professional Ethics
Level: Level 1

Topic: The Role of Professional Accountants in Business and Society
Series: NOV 2019

BMF – May 2017 – L1 – SA – Q19 – The Role of Professional Accountants in Business and Society

Multiple-choice question on identifying a principle not required for professional accountants.

Question

Which of the following is NOT a fundamental principle required to be strictly adhered to by professional accountants?

A. Professional incompetence
B. Professional behavior
C. Confidentiality
D. Objectivity
E. Integrity

Answer

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Tags: Accounting principles, Code of Conduct, Professional Ethics
Level: Level 1

Topic: The Role of Professional Accountants in Business and Society
Series: MAY 2017

FA – Nov 2019 – L1 – SB – Q1b – Trial Balance: Usefulness and Limitations

Identifies errors that affect and do not affect the trial balance.

Question

b. The balancing of a trial balance does not necessarily mean that such trial balance is error-free.

Required:
Using a two-column tabular format, highlight FOUR errors that do not affect the trial balance and FOUR errors that affect the trial balance. (8 Marks)

Answer

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Tags: Accounting principles, Errors, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2019

Question Tag: Accounting principles

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AAA – Nov 2011 – L3 – SAII – Q15 – Audit of Complex Entities

Definition of consistency in using accounting principles for comparability.

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FR – Nov 2022 – L2 – Q7a – Conceptual Framework Purposes

Short Summary: Summarize the six primary purposes of IASB's Conceptual Framework in international standards development.

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FA – Nov 2020 – L1 – SA – Q1 -Trial Balance: Usefulness and Limitations

Identifies an item not found on the debit column of a trial balance.

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PM – May 2019 – L2 – Q6 – Strategic Management Accounting

Discusses the essential qualities needed for management accounting information to be useful for decision-making.

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FA – Nov 2013 – L1 – SB – Q1b – Accounting Concepts

Listing and benefits of accounting concepts.

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FA – Nov 2013 – L1 – SB – Q1a – Accounting Concepts

Definition of accounting concepts.

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FA – Nov 2013 – L1 – SA – Q6 – Regulatory Environment of Accounting

Understanding what GAAP refers to.

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FA – Nov 2013 – L1 – SA – Q1 – Financial Statements Preparation

Determining the total cost for equipment recognition.

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FA – Nov 2015 – L1 – SA – Q20 – Accounting Treatment for Accruals and Prepayments

This question calculates the total rent expense to be charged to the profit or loss statement for the year.

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FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)

This question identifies which cost should not be included in the initial measurement of property, plant, and equipment.

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FA – Nov 2022 – L1 – SA – Q2 – Accounting Concepts

Identify the correct accounting principle.

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FA – May 2021 – L1 – SA – Q4 – Double-Entry Accounting Principles

Identify the correct statement regarding cash discount.

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FA – Nov 2023 – L1 – SA – Q16 – Recording Financial Transactions

Describe the treatment of bank accounts and cash balances.

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FA – Nov 2023 – L1 – SA – Q10 – Bases of Accounting: Accrual and Cash

Identify the correct description of the cash basis of accounting.

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FA – May 2021 – L1 – SA – Q2 – Accounting Concepts

Identifies the principle applied when inventory is recognized at net realizable value.

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FA – May 2023 – L1 – SA – Q16 – Qualitative Characteristics of Useful Financial Information

Identifying the accounting principle that requires financial information to be supported by evidence.

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FA – May 2023 – L1 – SA – Q4 – Double-Entry Accounting Principles

Identifying the correct expression of the double entry rule.

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BMF – Nov 2019 – L1 – SA – Q7 – The Role of Professional Accountants in Business and Society

Identifying the principle that is not a fundamental requirement for professional accountants

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BMF – May 2017 – L1 – SA – Q19 – The Role of Professional Accountants in Business and Society

Multiple-choice question on identifying a principle not required for professional accountants.

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FA – Nov 2019 – L1 – SB – Q1b – Trial Balance: Usefulness and Limitations

Identifies errors that affect and do not affect the trial balance.

You're reporting an error for "FA – Nov 2019 – L1 – SB – Q1b – Trial Balance: Usefulness and Limitations"

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