ICAEW ACA Accounting Exam Updated
Actual Question and Answer (2026/2027)
| Complete Prep
• Books of Original Entry . CORRECT ANSWER: 1. Cash Book
2. Sales Day Book (Credit Sales)
3. Purchases Day Book (Credit Purchases)
4. Petty Cash Book
5. Journal Book
6. The Payroll
• Statement of Financial Position . CORRECT ANSWER: SOFP
- Snapshot of assets controlled, liabilities owned and capital at a point in time
• Statement of Profit and Loss . CORRECT ANSWER: Income and expenses over a
period of time
• The Business entity concept . CORRECT ANSWER: Business transactions should be
kept separate from the personal transaction of the owner
• Qualitative characteristics of financial information . CORRECT ANSWER: Two
fundamental concepts
1. Relevance [Assists users in evaluating past and predicting future events + Materiality]
2. Faithful Representation [Neutral; Free from Error; Complete]
Four Enhancing Characteristics
1. Verifiability [Can be proven]
2. Timeliness [In time to influence decisions of users]
3. Understandability [Readily understandable by people with reasonable knowledge]
4. Comparability [Consistency]
• Accrual basis of accounting . CORRECT ANSWER: - Items recognized as assets,
liabilities, equity, income and expenses (elements of FS) when they satisfy definitions
and recognition criteria for those elements in conceptual framework
- Transactions recognized when they occur
!! Income earned must be matched against the expenditure incurred in earning it
• Accrual Concept . CORRECT ANSWER: Effects of transactions reognized when they
occur - not when cash received/paid
• IFAC Code of Ethics . CORRECT ANSWER: 1. Integrity
2. Objectivity
3. Professional Competence and Due Care
, 4. Confidentiality
5. Professional Behavior
• Accounting Equation . CORRECT ANSWER: Assets = Capital + Liabilities
same:
Assets - Liabilities = Capital + Profit - Drawings
• ICAEW Code of Ethics . CORRECT ANSWER: - Demonstrate highest standards of
professional conduct and take public interest into consideration
- Maintain reputation of accounting profession
• Payroll cost . CORRECT ANSWER: Total Payroll cost = Gross Pay + Employer NI +
Employer Pension
• Net Pay by Employer . CORRECT ANSWER: Gross Pay
- Employees NI
- PAYE
= Net Pay
• Trial Balance Definition . CORRECT ANSWER: A list of balances from each ledger
account split into debits and credits
• Cost of sales [function] . CORRECT ANSWER: Opening inventory + Purchases +
Carriage Inwards - Closing Inventory
• Carriage Inwards vs. Outwards . CORRECT ANSWER: Carriage inwards: added to
cost of purchases therefore included in COS and Gross Profit
Carriage outwards: distribution cost deducted from gross profit in Statement of Profit
and Loss
• Net Realizable Value . CORRECT ANSWER: NRV of an item is net selling proceeds
after all cost needing to be incurred to sell item have been deducted
• Closing and Opening Inventory Entries . CORRECT ANSWER: Closing:
Dr. Inventory
Cr. Cost of Sales
Opening:
Dr. Cost of Sales
Cr. Inventory
• Inventory Drawings Entry . CORRECT ANSWER: Dr. Drawings
Cr. Purchases
Actual Question and Answer (2026/2027)
| Complete Prep
• Books of Original Entry . CORRECT ANSWER: 1. Cash Book
2. Sales Day Book (Credit Sales)
3. Purchases Day Book (Credit Purchases)
4. Petty Cash Book
5. Journal Book
6. The Payroll
• Statement of Financial Position . CORRECT ANSWER: SOFP
- Snapshot of assets controlled, liabilities owned and capital at a point in time
• Statement of Profit and Loss . CORRECT ANSWER: Income and expenses over a
period of time
• The Business entity concept . CORRECT ANSWER: Business transactions should be
kept separate from the personal transaction of the owner
• Qualitative characteristics of financial information . CORRECT ANSWER: Two
fundamental concepts
1. Relevance [Assists users in evaluating past and predicting future events + Materiality]
2. Faithful Representation [Neutral; Free from Error; Complete]
Four Enhancing Characteristics
1. Verifiability [Can be proven]
2. Timeliness [In time to influence decisions of users]
3. Understandability [Readily understandable by people with reasonable knowledge]
4. Comparability [Consistency]
• Accrual basis of accounting . CORRECT ANSWER: - Items recognized as assets,
liabilities, equity, income and expenses (elements of FS) when they satisfy definitions
and recognition criteria for those elements in conceptual framework
- Transactions recognized when they occur
!! Income earned must be matched against the expenditure incurred in earning it
• Accrual Concept . CORRECT ANSWER: Effects of transactions reognized when they
occur - not when cash received/paid
• IFAC Code of Ethics . CORRECT ANSWER: 1. Integrity
2. Objectivity
3. Professional Competence and Due Care
, 4. Confidentiality
5. Professional Behavior
• Accounting Equation . CORRECT ANSWER: Assets = Capital + Liabilities
same:
Assets - Liabilities = Capital + Profit - Drawings
• ICAEW Code of Ethics . CORRECT ANSWER: - Demonstrate highest standards of
professional conduct and take public interest into consideration
- Maintain reputation of accounting profession
• Payroll cost . CORRECT ANSWER: Total Payroll cost = Gross Pay + Employer NI +
Employer Pension
• Net Pay by Employer . CORRECT ANSWER: Gross Pay
- Employees NI
- PAYE
= Net Pay
• Trial Balance Definition . CORRECT ANSWER: A list of balances from each ledger
account split into debits and credits
• Cost of sales [function] . CORRECT ANSWER: Opening inventory + Purchases +
Carriage Inwards - Closing Inventory
• Carriage Inwards vs. Outwards . CORRECT ANSWER: Carriage inwards: added to
cost of purchases therefore included in COS and Gross Profit
Carriage outwards: distribution cost deducted from gross profit in Statement of Profit
and Loss
• Net Realizable Value . CORRECT ANSWER: NRV of an item is net selling proceeds
after all cost needing to be incurred to sell item have been deducted
• Closing and Opening Inventory Entries . CORRECT ANSWER: Closing:
Dr. Inventory
Cr. Cost of Sales
Opening:
Dr. Cost of Sales
Cr. Inventory
• Inventory Drawings Entry . CORRECT ANSWER: Dr. Drawings
Cr. Purchases
