ICAEW ACA Accounting Exam Updated
Actual Question and Answer (2026/2027)
| Grade A+
• Types of Business Entity . CORRECT ANSWER: • Sole trader
• Partnership
• Limited Liability Companies
• SOFP . CORRECT ANSWER: A list of assets and liabilities of the business.
• SPL . CORRECT ANSWER: The revenue and expense of a business for the
accounting period.
• Purpose of SOFP . CORRECT ANSWER: To show the total value of the net assets of
the business at the end of a period.
• Purpose of SPL . CORRECT ANSWER: To show the amount of profit and loss that
the business has made during that period.
• Stakeholders for financial information . CORRECT ANSWER: • Managers/Directors
• Owners of the company
• Trade contracts
• Finance providers
•HMRC
• Capital Expenditure . CORRECT ANSWER: Expenditure which results in the
acquisition of non-current assets or an improvement or enhancement of their earning
capacity (>1yr) (NCA)
• Revenue Expenditure . CORRECT ANSWER: Expenditure which is incurred either for
trade purposes (e.g. items for resale) or to maintain the existing earning capacity of
non-current assets (e.g repairing)
• Code of Ethics (IFAC) . CORRECT ANSWER: • Professional Behaviour
• Objectivity
• Professional Competence & due care
• Confidentiality
• Integrity
• Business entity concept . CORRECT ANSWER: A business is a separate entity from
its owner.
• Capital . CORRECT ANSWER: How much the business owes back to the owner.
, • Year-end capital Equation . CORRECT ANSWER: Bal. at start of year + net profit +
capital inj. - drawings
• Share capital Equation . CORRECT ANSWER: Bal. at start of year + Further
investment in shares by new stakeholders
• Retained Earnings Equation . CORRECT ANSWER: Bal. at start of year + Profit -
dividends
• Accounting equation . CORRECT ANSWER: Assets = Liability + Capital
• Cost of Sales/Inventory Equation . CORRECT ANSWER: Opening inv. + Purchases -
Closing inventory
• Types of discounts . CORRECT ANSWER: • Trade (Bulk Buy)
• Early settlement (Prompt)
• Total Staff Costs Equation . CORRECT ANSWER: Gross salaries + Employer's NICs
• Components of Gross Salary . CORRECT ANSWER: • Net Salary
• Income tax (PAYE)
• National Insurance
• Conceptual Framework . CORRECT ANSWER: Sets out the concepts that underline
the preparation & presentation of financial statements.
• Objective of Financial Statements . CORRECT ANSWER: To provide information
about the reporting entity, that is useful to a wide variety of users in making economic
decisions about an entity.
• Qualitative characteristics of Conceptual Framework . CORRECT ANSWER: •
Relevance
• Faithful Representation
• Ways of enhancing Qualitative characteristics . CORRECT ANSWER: • Comparability
• Verifiability
• Timelines
• Understandability
• Accruals concept . CORRECT ANSWER: It requires that transactions and events are
recognised when they occur, not when cash is received or paid.
• Going concern concept . CORRECT ANSWER: • The entity is viewed as continuing
its operations for the foreseeable future.
Actual Question and Answer (2026/2027)
| Grade A+
• Types of Business Entity . CORRECT ANSWER: • Sole trader
• Partnership
• Limited Liability Companies
• SOFP . CORRECT ANSWER: A list of assets and liabilities of the business.
• SPL . CORRECT ANSWER: The revenue and expense of a business for the
accounting period.
• Purpose of SOFP . CORRECT ANSWER: To show the total value of the net assets of
the business at the end of a period.
• Purpose of SPL . CORRECT ANSWER: To show the amount of profit and loss that
the business has made during that period.
• Stakeholders for financial information . CORRECT ANSWER: • Managers/Directors
• Owners of the company
• Trade contracts
• Finance providers
•HMRC
• Capital Expenditure . CORRECT ANSWER: Expenditure which results in the
acquisition of non-current assets or an improvement or enhancement of their earning
capacity (>1yr) (NCA)
• Revenue Expenditure . CORRECT ANSWER: Expenditure which is incurred either for
trade purposes (e.g. items for resale) or to maintain the existing earning capacity of
non-current assets (e.g repairing)
• Code of Ethics (IFAC) . CORRECT ANSWER: • Professional Behaviour
• Objectivity
• Professional Competence & due care
• Confidentiality
• Integrity
• Business entity concept . CORRECT ANSWER: A business is a separate entity from
its owner.
• Capital . CORRECT ANSWER: How much the business owes back to the owner.
, • Year-end capital Equation . CORRECT ANSWER: Bal. at start of year + net profit +
capital inj. - drawings
• Share capital Equation . CORRECT ANSWER: Bal. at start of year + Further
investment in shares by new stakeholders
• Retained Earnings Equation . CORRECT ANSWER: Bal. at start of year + Profit -
dividends
• Accounting equation . CORRECT ANSWER: Assets = Liability + Capital
• Cost of Sales/Inventory Equation . CORRECT ANSWER: Opening inv. + Purchases -
Closing inventory
• Types of discounts . CORRECT ANSWER: • Trade (Bulk Buy)
• Early settlement (Prompt)
• Total Staff Costs Equation . CORRECT ANSWER: Gross salaries + Employer's NICs
• Components of Gross Salary . CORRECT ANSWER: • Net Salary
• Income tax (PAYE)
• National Insurance
• Conceptual Framework . CORRECT ANSWER: Sets out the concepts that underline
the preparation & presentation of financial statements.
• Objective of Financial Statements . CORRECT ANSWER: To provide information
about the reporting entity, that is useful to a wide variety of users in making economic
decisions about an entity.
• Qualitative characteristics of Conceptual Framework . CORRECT ANSWER: •
Relevance
• Faithful Representation
• Ways of enhancing Qualitative characteristics . CORRECT ANSWER: • Comparability
• Verifiability
• Timelines
• Understandability
• Accruals concept . CORRECT ANSWER: It requires that transactions and events are
recognised when they occur, not when cash is received or paid.
• Going concern concept . CORRECT ANSWER: • The entity is viewed as continuing
its operations for the foreseeable future.
