Quick10 Module 1 Test – 10 marks © AT 2018

12 mins writing time + 5 minutes reading time

Student Name:______________________________________________________________ Mark: /10

ACCOUNTING
Unit 3 – Written examination
2018 Quick10 Module 1 Test

Reading Time: 5 minutes

Writing Time: 12 minutes

QUESTION and ANSWER BOOK

Structure of book

Number of Number of Number of

questions questions to be marks
answered
5 5 10

 Students are permitted to bring into the examination room: pens, pencils, highlighters, erasers, sharpeners,
rulers, and a scientific calculator.
 Students are not permitted to bring into the examination room: blank sheets of paper and/or white out
liquid/tape.

Materials supplied

 Question and Answer book of 4 pages.

Instructions

 Answer all questions in the answer book.

 All written responses must be in English.

Students are NOT permitted to bring mobile phones and/or any other electronic devices into the
examination room.
Quick10 Module 1 Test – 10 marks © AT 2018
12 mins writing time + 5 minutes reading time
1. Sometimes, businesses offer credit to customers so that they can purchase goods and
services at the present time and pay for these items later in cash. In order to prompt early
repayment for items sold on credit, the business may offer the customer credit terms such
as ‘5/7, n/30.’
Explain how Credit Sales Revenue meets the definition of a revenue and how Discount
Expense meets the definition of an expense. (4 marks)

2. What are the two rules for double-entry accounting? (2 x ½ mark = 1 mark)
Quick10 Module 1 Test – 10 marks © AT 2018
12 mins writing time + 5 minutes reading time
3. Provide an argument for using an agreed value and provide an opposing argument for
using the historical cost for the valuation of a computer contributed by an owner to their
business. Each argument should be evidenced by an accounting principle or qualitative
characteristic. (2 x 1 mark = 2 marks)

4. The Reporting Period principle is often associated with the accounting elements
“Revenues” and “Expenses” whereas the Going Concern principle is often associated with
the accounting elements “Assets,” “Liabilities,” and “Owner’s Equity.”
What is the difference between the Reporting Period principle and the Going Concern
principle? N.B: You do not have to define the principles. (2 marks).
Quick10 Module 1 Test – 10 marks © AT 2018
12 mins writing time + 5 minutes reading time
5. Relevance and Reliability are two qualitative characteristics that are debated by
accountants worldwide in reference to several issues such as the depreciation of non-
current assets.
Provide one reason why Relevance will usually always override Reliability (N.B: You do
not necessarily have to provide your answer in the context of depreciation). (1 mark).

END OF QUESTION AND ANSWER BOOK

Extra writing space (please reference the question number):