Question 14

What is the best statement regarding Accounting Entities:

a.Monetary transactions of an accounting entity must be kept separate from those of its owners

b.An accounting entity is automatically considered a reporting entity

c.Accounting entities have external users who require general-purpose financial reports

d.An accounting entity is a Company structure, for which financial transactions occur and accounting records are maintained

Question 15

What is the best statement regarding accounting errors:

a.An accounting error is a fraudulent discrepancy in financial documentation

b.Accounting errors will cause the trial balance to be incomplete

c.Common practice is to correct accounting errors within 90 days of identifying the error

d.The most common error are clerical errors, transposition errors and balancing errors.

Question 16

Under accrual accounting, which of the following is not correct?

a.Expenses are recorded when an invoice is paid

b.Expenses are matched with the related revenues

c.Income is recorded when cash is received.

d.Adjusting entries are not necessary.

Question 17

What is the best statement regarding Accounting Entities:

a.Monetary transactions of an accounting entity must be kept separate from those of its owners

b.An accounting entity is automatically considered a reporting entity

c. Accounting entities have external users who require general-purpose financial reports

d.An accounting entity is a Company structure, for which financial transactions occur and accounting records are maintained

Question 18

Choose the best statement concerning balance sheets

a.the balance sheet can be referred to as the statement of financial position and is based on the accounting equation, assets = liabilities + equity

b.the balance sheet can be referred to as the statement of financial performance and is based on the accounting equation, assets = liabilities + equity

c.the balance sheet can be referred to as the statement of financial performance and is based on the profit equation, profit = revenue - expenses

d.the balance sheet can be referred to as the statement of financial position and is based on the profit equation, profit = revenue - expenses

Question 19

The income statement:

a.can be referred to as the statement of financial position and is based on the accounting equation, assets = liabilities + equity

b.can be referred to as the statement of financial position and is based on the profit equation, profit = revenue - expenses

c.can be referred to as the statement of financial performance and is based on the profit equation, profit = revenue - expenses

d.can be referred to as the statement of financial performance and is based on the accounting equation, assets = liabilities + equity

Question 20

IASB stands for:

a.International Auditing Standards Board

b.International Accounting Standards Board

c.International Assurance Standards Board

d.Ireland Accounting Standard Board