6. The UK regulatory system derives from which of the following, 1: Company Law, 2: Accounting Standards and Financial Reporting Standards, 3: International Criminal Law, 4: Stock Exchange Requirements
1,2,3 and 4
1 and 2 only
1,2 and 4 only
1 only
7. Which of the following is a True statement? 1. The trial balance is a type of financial statement. 2. The income statement is a snapshot of profit. 3. The accounting functions inc communicating eco info for the users of acc. 4. LC saved from bankrupy
3 only
1 and 3 only
1,2 and 4 only
None of the above
8. Which of the following is a current liability?
Motor Vehicles
Bank Overdraft
Old Equipment
Trade Receivables
9. Gross Profit is:
Cost of goods sold plus opening inventories.
Net profit less expenses of the period.
Excess of sales over cost of goods sold.
Sales less purchases
10. A firm bought a machine for £23,000. It is expected to be used for 4 years, with a salvage value of £3,000. What is the amount of depreciation in year 2 using the straight line method?
£4,000
£5,000
£4,200
£4,600
11. Trade Payables are:
Customers who owe money to the business
Suppliers who have been paid by the business
Suppliers we have to pay within a year.
Customers who pay cash.
12. Depreciation is:
The amount of money required to replace the asset.
The useful life of the asset.
The charge to spread the cost of the asset over estimated useful. life.
The Net Book Value of an asset.
13. Which of the following best explains why employees are interested in the financial statements of their employer?
To assess whether the business will continue into the foreseeable future.
To assess the profitability of the business in order to decide whether to invest in it.
To compare the business with its competitors to determine if its profitability can be improved.
To assess the effect of the business on the local economy, community, and environment.
14. Which of the following is a true statement?
Trade payables are a source of finance.
The capital Account is for recording capital expenditure
A balanced trial balance produces correct accounts.
The Statement of Financial Position usually covers one year.
15. Which of the following best explain why managers are interested in the financial statements of their company?
To assess the likely risks and returns in order to consider investment.
To help them make decisions and plans for the business.
To assess the ability of the business to pay for goods supplied.
To assess the profitability of the business for tax purposes.
16. PIC
Public Limited Company
Public Limited Corporation
Public Liability Company
Private Limited Company
17. Which of the following sources of finance would be most suitable for Inventory?
