ACA [ICAEW] – ACCOUNTING questions with correct answers

Books of Original Entry - 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 - Answer SOFP - Snapshot of assets controlled, liabilities owned and capital at a point in time Statement of Profit and Loss - Answer Income and expenses over a period of time The Business entity concept - Answer Business transactions should be kept separate from the personal transaction of the owner Qualitative characteristics of financial information - 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