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    The document contains 5 multiple choice questions about accounting concepts: 1. The first question asks about which characteristic financial statements should be free from bias relates to. 2. The second question provides information about provisions for doubtful debts and asks about the correct entry in the year-end balance sheet. 3. The third question gives details of inventory purchases and sales and asks about the closing inventory amount using FIFO valuation. 4. The fourth question asks which comment a high price-earnings ratio reflects. 5. The final question provides machine purchase and residual value information and asks about the depreciation charge after three years.

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    The document contains 5 multiple choice questions about accounting concepts: 1. The first question asks about which characteristic financial statements should be free from bias relates to. 2. The second question provides information about provisions for doubtful debts and asks about the correct entry in the year-end balance sheet. 3. The third question gives details of inventory purchases and sales and asks about the closing inventory amount using FIFO valuation. 4. The fourth question asks which comment a high price-earnings ratio reflects. 5. The final question provides machine purchase and residual value information and asks about the depreciation charge after three years.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    7 views2 pages

    Sample Test

    Uploaded by

    Linh_Do_5195
    The document contains 5 multiple choice questions about accounting concepts: 1. The first question asks about which characteristic financial statements should be free from bias relates to. 2. The second question provides information about provisions for doubtful debts and asks about the correct entry in the year-end balance sheet. 3. The third question gives details of inventory purchases and sales and asks about the closing inventory amount using FIFO valuation. 4. The fourth question asks which comment a high price-earnings ratio reflects. 5. The final question provides machine purchase and residual value information and asks about the depreciation charge after three years.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    of 2

    1. The idea that financial statements should be free from bias is part of which characteristic?

    A. B. C. D.

    Relevance Understandability Reliability Comparability

    Answer: .
    2. A company at the start of a financial period had a provision for doubtful debts of 4,000.

    By the end of the year, trade receivables (debtors) totalled 62,000 which included 3,000 regarded as bad and a further 6,000 considered doubtful. Relevant entries in the yearend balance sheet are: A. Trade receivables (debtors) 59,000 less provision for doubtful debts 10,000 B. Trade receivables (debtors) 59,000 less provision for doubtful debts 2,000 C. Trade receivables (debtors) 59,000 less provision for doubtful debts 6,000 D. Trade receivables (debtors) 62,000 less provision for doubtful debts 6,000 Answer: . 3. At 31 December Year 1, James White and Co. carried out his physical stocktaking, counting 25 CD players, each of which had cost 100. During Year 2, further purchases were made as follows: Month CD players purchased Unit price March 5 100 May 10 110 June 8 115 September 6 120 November 12 125 Annual sales totalled 52 CD players, at total sales revenue of 9,350. Dates of sale are not recorded. If the first-in, first-out (FIFO) method of inventory (stock) valuation is used, what is the amount of closing inventory (stock)? A. 1,750 B. 1,740 C. 5,500 D. 2,500 Answer: . 4. A high price-earnings (P/E) ratio reflects which one of the following comments? A. Investors are confident about the future earnings of the business B. Many more investors are selling shares rather than buying shares in the company C. Investors are lacking confidence about the future earnings of the business D. The companys expenses have been increasing at a greater rate than its share price Answer: . 5. A company buys a machine for 18,172 and estimates its residual value at 2,184. It is depreciating the asset over a 9 year period by the straight line method. What is the total depreciation charge after three years have elapsed from the purchase price?

    A. B. C. D.

    6,057 1,776 6,785 5,329

    Answer: .

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