Accounting Concepts – Page 8

FA – May 2012 – L1 – SA – Q40 – Accounting Concepts

Identifying the term for the excess of minimum royalty over actual royalty paid.

Question

The excess of minimum royalty over actual royalty paid on output is called ………………..

Answer

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Tags: Lease Agreements, Royalty
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2012

FA – May 2012 – L1 – SA – Q39 – Accounting Concepts

Identifying the name of the series of accounting activities from the beginning to the end of the accounting period.

Question

The series of accounting activities that take place from the beginning of the accounting period of an enterprise to the end of that period, and repeated in subsequent years, is known as …………………………..

Answer

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Tags: Accounting Cycle, Periodic Activities
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2012

FA – May 2012 – L1 – SA – Q26 – Accounting Concepts

Calculating the mark-up percentage based on selling price.

Question

A computer company operating retail stores in six cities in Nigeria invoices goods to the branches at cost plus a mark-up of 25%. What is the mark-up percentage on the selling price?

Answer

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Tags: Mark-Up, Selling Price
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2012

FA – May 2012 – L1 – SA – Q18 – Accounting Concepts

Identifying the aggregate of prime cost and indirect overheads.

Question

The aggregate of prime cost and indirect overheads is:

A. Cost of goods sold
B. Cost of materials used in production
C. Market value of goods produced
D. Factory cost
E. Total overhead

Answer

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Tags: Costing, Factory Costs, Overheads
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2012

FA – May 2012 – L1 – SA – Q16 – Accounting Concepts

Determining correct statements regarding margin and mark-up.

Question

If goods that cost N900,000 were sold for N1,200,000, which of the following statements are correct?

(i) Mark-up is 25%
(ii) Margin is 331/3%
(iii) Margin is 25%
(iv) Mark-up is 331/3%

A. (i) and (ii)
B. (i) and (iii)
C. (ii) and (iii)
D. (iii) and (iv)
E. (ii) and (iv)

Answer

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Tags: Margin, Mark-Up, Pricing
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2012

FA – May 2012 – L1 – SA – Q12 – Accounting Concepts

Determining the correct presentation of share capital and share premium after a fresh issue of shares.

Question

At 1 January 2011, the capital structure of Jumbo Plc was as follows:

Issued share capital, 10,000,000 ordinary shares of N1.00 each: N10,000,000
Share premium account: N500,000

On 1 September 2011, the company made a fresh issue of 500,000 shares at N1.30 each. Which of the following correctly presents the company’s share capital and share premium accounts as at 31 December 2011?

A. Share capital N10,000,000, Share premium N650,000
B. Share capital N10,500,000, Share premium N650,000
C. Share capital N10,650,000, Share premium N500,000
D. Share capital N10,150,000, Share premium N1,000,000
E. Share capital N10,000,000, Share premium N500,000

Answer

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Tags: Financial Position, Share Capital, Share Premium
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2012

FA – May 2012 – L1 – SA – Q9 – Accounting Concepts

Identifying transactions that do not affect cash and bank balances.

Question

Which of the following will NOT affect cash and bank balances in the statement of financial position of a company?

A. Cash paid into the bank
B. Company’s cheque returned unpaid
C. Cheque received on account receivable paid to the bank but was returned unpaid
D. Bank charges in the statement of account
E. Cash discount on accounts receivable.

Answer

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Level: Level 1

Topic: Accounting Concepts
Series: MAY 2012

FA – Nov 2011 – L1 – SA – Q18 – Accounting Concepts

This question asks for the term used to describe the excess of current assets over current liabilities.

Question

The excess of current assets over current liabilities is referred to as?

Answer

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Tags: Current Assets, Current Liabilities
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q14 – Accounting Concepts

This question asks about the effect of understating closing work-in-progress in a manufacturing account.

Question

The effect of understating closing work-in-progress in a manufacturing account is that it?

Answer

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Tags: Manufacturing Accounts, Work in Progress
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q12 – Accounting Concepts

This question asks about the term used for profit expressed as a percentage of the selling price.

Question

Profit expressed as a percentage of selling price is known as?

Answer

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Tags: Profit Margins, Selling Price
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2011

FA – Nov 2014 – L1 – SA – Q18 – Accounting Concepts

Identifying the accounting concept that governs recognizing transactions in the period they occur.

Question

Accounting for the effects of transactions and other events and circumstances on a reporting entity’s economic resources and claims in the period in which those effects occur, even if the resulting cash receipts and payments occur in a different period, is governed by which of the following accounting concepts?

A. Cash basis
B. Accrual
C. Matching
D. Consistency
E. Going concern

Answer

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

Topic: Accounting Concepts
Series: NOV 2014

FA – May 2021 – L1 – SB – Q1a – Accounting Concepts

Explanation of seven fundamental accounting concepts used in financial statement preparation.

Question

Briefly explain the following fundamental accounting concepts used in the preparation of financial statements in accordance with IAS 1 – Presentation of financial statement:

i. Going concern (2 Marks)
ii. Consistency of presentation (2 Marks)
iii. Accrual (2 Marks)
iv. Fair presentation (2 Marks)
v. Substance over form (2 Marks)
vi. Prudence (2 Marks)
vii. Materiality (2 Marks)

Answer

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Tags: Accrual, Consistency, Fair Presentation, Going Concern, Materiality, Prudence, Substance Over Form
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2021

FA – Nov 2023 – L1 – SB – Q5A – Accounting Concepts

Explain the relationships among the main components of financial statements.

Question

State and explain the relationships among the main components of financial statements.

Answer

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Tags: Components, Financial Statements, Relationships
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2023

FA – Nov 2023 – L1 – SB – Q2 -Accounting Concepts

Explain key accounting concepts used in preparing financial statements.

Question

Briefly explain the following accounting concepts in the preparation of financial statements:
i. Going concern
ii. Consistency
iii. Accrual
iv. Fair presentation
v. Substance over form
vi. Prudence
vii. Materiality

Answer

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Tags: Accounting Concepts, Financial Statements, Preparation
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2023

FA – Nov 2023 – L1 – SA – Q15 – Accounting Concepts

Calculate the new accounting equation after withdrawals.

Question

The accounting equation of Kola is ₦107,250 (Assets) = ₦55,500 (Equity) + ₦51,750 (Liabilities). Kola decides to take ₦6,000 in cash and inventories with a value of ₦3,000 out of the business for his personal use. What is the new value of the accounting equation for Kola after the withdrawals?

A. ₦98,250 = ₦46,500 + ₦51,750
B. ₦98,250 = ₦55,500 + ₦42,750
C. ₦107,250 = ₦58,500 + ₦54,750
D. ₦98,250 = ₦49,500 + ₦48,750
E. ₦98,250 = ₦52,500 + ₦45,750

Answer

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Tags: Accounting Equation, Assets, Withdrawals
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2023

FA – Nov 2023 – L1 – SA – Q3 – Accounting Concepts

Determine the allowance for doubtful debts based on company policy.

Question

What is the general allowance for doubtful debts in the statement of profit or loss at the current year-end, based on the company’s policy?

A. N52,000
B. N60,500
C. N105,000
D. N112,500
E. N173,500

Answer

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Tags: Allowance, Doubtful Debts, Financial Reporting
Level: Level 1

Topic: Accounting Concepts
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 – Nov 2019 – L1 – SA – Q4 – Accounting Concepts

Identify which change does not affect accounting policy under IAS-8.

Question

In accordance with the requirements of IAS-8 – Accounting Policies, Estimates, and Errors, which of the following changes in method does not give rise to changes in accounting policy?

Answer

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Tags: Accounting Policies, Depreciation, IAS 8
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2019

FA – Nov 2019 – L1 – SA – Q3 Accounting Concepts-

Identify the fundamental accounting assumptions for preparing financial statements.

Question

Which of the following combinations of accounting concepts are the fundamental assumptions in the preparation of financial statements?

Answer

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Tags: Accounting Concepts, Fundamental Assumptions
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2019

FR – Nov 2019 – L2 – Q4 – Financial Statement Analysis

Assessment of impairment loss for a cash-generating unit including intangible assets and goodwill.

Question

Hukpor Ltd (Hukpor) manufactures a variety of consumer products. The company’s founders have managed the company for thirty years and are now interested in selling the company and retiring. Seekers Ltd is looking into the acquisition of Hukpor and has requested the company’s latest financial statements and selected financial ratios in order to evaluate Hukpor’s financial stability and operating efficiency. The summary of information provided by Hukpor is presented below:

Statements of Financial Position as at 31 December

Selected Financial Ratios of Hukpor Ltd for 2017
Current ratio 1.61:1
Acid-test ratio 0.64:1
Inventory turnover 3.17 times
Times interest earned 8.55 times
Debt-to-equity ratio 86%
Required:
a) Calculate ratios for the years 2018 for Hukpor in comparison with ratios for 2017. (5 marks)
b) For each of the ratios computed for 2018, analyse Hukpor’s performance for 2018 based
on the results of the ratio computed, in comparison with the results for 2017. (10 marks) c) Explain FIVE (5) limitations of accounting ratios. (5 marks)
(Total: 20 marks)

Answer

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Tags: Cash-Generating Unit, Fair Value, IAS 36, Impairment, Value in Use
Level: Level 2

Topic: Accounting Concepts

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FA – May 2012 – L1 – SA – Q40 – Accounting Concepts

Identifying the term for the excess of minimum royalty over actual royalty paid.

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FA – May 2012 – L1 – SA – Q39 – Accounting Concepts

Identifying the name of the series of accounting activities from the beginning to the end of the accounting period.

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FA – May 2012 – L1 – SA – Q26 – Accounting Concepts

Calculating the mark-up percentage based on selling price.

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FA – May 2012 – L1 – SA – Q18 – Accounting Concepts

Identifying the aggregate of prime cost and indirect overheads.

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FA – May 2012 – L1 – SA – Q16 – Accounting Concepts

Determining correct statements regarding margin and mark-up.

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FA – May 2012 – L1 – SA – Q12 – Accounting Concepts

Determining the correct presentation of share capital and share premium after a fresh issue of shares.

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FA – May 2012 – L1 – SA – Q9 – Accounting Concepts

Identifying transactions that do not affect cash and bank balances.

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FA – Nov 2011 – L1 – SA – Q18 – Accounting Concepts

This question asks for the term used to describe the excess of current assets over current liabilities.

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FA – Nov 2011 – L1 – SA – Q14 – Accounting Concepts

This question asks about the effect of understating closing work-in-progress in a manufacturing account.

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FA – Nov 2011 – L1 – SA – Q12 – Accounting Concepts

This question asks about the term used for profit expressed as a percentage of the selling price.

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FA – Nov 2014 – L1 – SA – Q18 – Accounting Concepts

Identifying the accounting concept that governs recognizing transactions in the period they occur.

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FA – May 2021 – L1 – SB – Q1a – Accounting Concepts

Explanation of seven fundamental accounting concepts used in financial statement preparation.

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FA – Nov 2023 – L1 – SB – Q5A – Accounting Concepts

Explain the relationships among the main components of financial statements.

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FA – Nov 2023 – L1 – SB – Q2 -Accounting Concepts

Explain key accounting concepts used in preparing financial statements.

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FA – Nov 2023 – L1 – SA – Q15 – Accounting Concepts

Calculate the new accounting equation after withdrawals.

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FA – Nov 2023 – L1 – SA – Q3 – Accounting Concepts

Determine the allowance for doubtful debts based on company policy.

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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 – Nov 2019 – L1 – SA – Q4 – Accounting Concepts

Identify which change does not affect accounting policy under IAS-8.

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FA – Nov 2019 – L1 – SA – Q3 Accounting Concepts-

Identify the fundamental accounting assumptions for preparing financial statements.

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FR – Nov 2019 – L2 – Q4 – Financial Statement Analysis

Assessment of impairment loss for a cash-generating unit including intangible assets and goodwill.

You're reporting an error for "FR – Nov 2019 – L2 – Q4 – Financial Statement Analysis"

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