1. The fundamental qualitative characteristics of financial information include: (a). Verifiability and understandability. (b). Relevance and comparability. (c). Faithful representation and comparability (d). Relevance and faithful representation. 2. Recognition is the process of (a). Disclosing information in the notes to the financial statements (b). Determining whether an item should be presented in the financial statements (c). Incorporating an item in the financial statements (d). Determining the amount at which an item should be shown in the financial statements 3. is the price of the transaction incurred when an element in financial statement is recognized. (). Fair value. (b.). Current cost. (c). Value in use. (d). Historical cost. 4. Which of the following is not required to be disclosed on the face of the statement of the financial position? (a). Share capital. (b). Long term liabilities. (c). Cost and accumulated depreciation of tangible non-current assets. (d). Intangible non-current assets. 5. Which of the following would not necessarily lead to a liability being classified as current? (s). The liability is expected to be settled as part of the normal trading cycle. (b). The liability has arisen during the current accounting period just ended. (c). The liability is expected to be settled within the twelve months next following the current accounting year-end. (d). The liability has arisen as a consequence of normal trading activities, 6. How should interest charged on partners' drawings be dealt with in partnership financial statements? (). Credited as income in the profit and loss account. (b). Deducted from profit in allocating the profit among the partners. (c). Added to profit in allocating the profit among the partners. (d). Debited as an expense in the profit and loss account.7. A receivables control system has a closing balance of $8,500. It contained a contra to the payables ledger of 5400, but this has been entered on the wrong side of the control account. The correct debit balance on the control account iss (a). $7,700. (b). $8,100. (c). $9,300. (d). $8,900. B, Sayhan, Errol and Ales are in partnership, preparing financial statements is at 31 August each year and sharing profits 4:3:1. Sayhan retired on 20 April 2020, and Errol and Alev continued, sharing profits 3:1 respectively. The business's profit for appropriation (arising evenly over the 12 months to 31 August 2020) was 5121, 248. For the year to 31 August 2020 Errol's profit there is: (a).$30.312. (). 545,468. (c). $60,624. (d). $90,936. 9. Which of the following statement is not true? (a). A single-entry system tracks Assets, Liabilities, or Owners Equities but does not monitor revenues and expenses, (b). The single-entry approach is very similar to the check register that individuals use to keep track of checks deposits, and balances for a personal checking account. (c). Single-entry bookkeeping and accounting can be adequate for a small business practicing cash basis accounting. (D). If the single entry bookkeeper mistakenly enters, may, a revenue inflow as $10,090 when the correct value is $1,000, the error may go unnoticed until the firm receives a bank statement with an unexpected low account balance. 10. Marks Service Co. (MSC) is a computer service centre. For the month, MSC had the following operating statistics Sales $450,000 Operating income $25,000 Net profit after taxes $8,000 Total assets $500,000 Shareholders" equity $200,000 Cost of capital 6% Based on the above information, which one of the following statements is true? MSC ha a (a). Return on investment of 4% (b). Residual income of $(5,000) (c). Return on investment of 16% (). Residual income of $(22,000) 3
