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Question 19 of 74 2 Poin If an accrued expense (i.e. accrued salaries) of R2 700 at year-end were recorded as a prepaid expense, the net profit would be: A. Overstated by R5 400 B. Understated by R5 400 C. Overstated by R2 700 D. Understated by R2 700 Question 21 of 74 1 Points A statement of financial position would disclose prepaid expenses as: O A. Non-current assets B. Non-current liabilities C. Current liabilities D. Current assets Reset Selection Question 20 of 74 2 Pc Which of the following statement is correct when the accounting records are maintained on the accrual basis: A. Expenditure should be accounted for only to the extent they have been paid for B. Income should be accounted for only when received C. Income and expenditure relating to the accounting period should be fully accounted for even if income is still to be received and expenditure is yet to be paid for D. Income should be accounted on accrual basis and expenditure on cash basis Question 23 of 74 1 Points Which one of the following is not regarded as a non- profit organisation: A. Educational institutions B. Financial institution C. Sports clubs OD. Professional bodies Question 24 of 74 1 Points In a statement of income and expenditure the following transactions are recorded: A. Capital nature only B. Equity nature only C. Income of only revenue nature and expenditure of revenue nature D. Both revenue and capital nature Question 25 of 74 1 Points The purpose of a statement of income and expenditure is to reveal: O A. Cash on hand B. Net profit OC. Surplus or deficiency OD. Capital account Question 26 of 74 1 Points A donation received by a school for organising an annual function is recorded as a: A. Revenue receipt B. Earned income C. Asset OD. Capital receipt Reset Selection Question 27 of 74 1 Points An amount received from the sale of refreshments by a club should be recorded as: OA. A capital receipt B. A revenue receipt C. An asset D. Earned income Question 28 of 74 1 Points Membership fees received in advance during the current year are recorded as: O A. None of the above B. An asset OC. An income D. A liability Reset Selection Question 30 of 74 1 Points Entrance fees that are capitalised are regarded as a receipt. O A. Capital B. Revenue C. Personal D. Real Reset Selection Question 31 of 74 1 Points Membership fees are treated as receipt. O A. Real B. Capital C. Personal D. Revenue Reset Selection Question 32 of 74 1 Points Membership fees outstanding will be disclosed as on the face of the statement of financial position. O A. None of the above B. Equity C. Assets D. Liabilities Reset Selection Question 35 of 74 1 Points A statement of cash flows includes: OA. Investing activities OB. All of the above O C. Financing activities D. Operating activities Question 36 of 74 1 Points In the statement of cash flows, when a firm invests in fixed assets and long-term financial investments, the result will be: A. An increase in liabilities B. A decrease in cash C. An increase in cash D. An increase in equity Question 38 of 74 1 Points The proceeds from the sale of assets from investing activities in the cash flow statement: A. Increases cash B. Increases liabilities C. Increases investments D. Decreases cash Question 39 of 74 1 Points The cash flow statement indicate: A. Only cash inflows to the entity B. Only cash outflows from the entity OC. Cash paid to suppliers D. Both cash inflows and cash outflows Reset Selection