Tick the answer which you consider to be correct.

(a) In accounting, if we give credit to someone it means that

(i) we think that they have done a good job;

(ii) we know that they have money in the bank;

(iii) they will be allowed to pay later for goods or services already supplied;

(iv) we think they are of good character.

(b) Which of the following is not included as one of the conventions of accounting?

(i) materiality

(ii) simplicity

(iii) objectivity

(iv) relevance

(c) The mam purpose of management accounting, as distinct from financial accounting, is

(i) to help decision-making within the company;

(ii) to assess the amount of tax a company has to pay;

(iii) to ascertain the value of the company’s shares;

(iv) to assess the company’s creditworthiness.

(d) Financial accounting reports are prepared primarily

(i) to value the property of the company;

(ii) to show managers the results of their departments;

(iii) to help people make decisions about resource allocation;

(iv) to show the value of the shares in the company.

(e) A company had bought some widgets, intended for resale, at a purchase price of £20 each. They can now be sold for only £17 each. In valuing the widgets for the purposes of preparing the financial accounts, which is the overriding convention?

(i) materiality

(ii) matching

(iii) prudence

(iv) going concern