1 Expenses classified by function would be categorised as:
O marketing expenses.
O borrowing expenses.
O selling and distribution expenses.
O all of the options listed.

2 Which of the following would not be classified as an administrative expense?
O Salaries and wages of sales staff.
O Stationery.
O Depreciation of office equipment.
O Rates.

3 Preparing financial statements on the basis of recognising transactions when they occur is referred to as:
O accrual accounting.
O management accounting.
O cash accounting.
O financial accounting

4 For a business selling magazine subscriptions and preparing financial reports on a monthly basis, when should it recognise the revenue
from the sale of annual subscriptions?
O When a customer pays the annual subscription.
O Monthly, on a straight-line basis over the 12 month subscription period.
O Evenly, from the month of payment up to the end of the current financial year.
O When the annual subscription period expires.

5 Which of the following are included in a statement of changes in equity?

O All changes in equity arising from equity contributions and dividends paid.
O All changes in equity arising from shares purchased.
O All changes in equity arising separately from non-owner changes in equity (e.g. profit).
O All options are included in a statement of changes in equity.

6 Equity is decreased by:
O liabilities.
O expenses.
O income.
O assets.