Financial Accounting Solutions EXAM WITH ACTUAL QUESTION AND CORRECT ANSWERS NEWEST
2025
Imprest system - CORRECT ANSWER-A system where an accountant pays for expenses, maintains and
provides records of the expenses at a regular interval.
Capital expenditure - CORRECT ANSWER-Expenditure for obtaining, developing, and improving long-
term assets and not for day-to-day running expenses.
Trial balance errors - CORRECT ANSWER-Errors of transposition, omission, principle, commission, or
compensating errors that cause the trial balance totals to be unequal.
Materiality concept - CORRECT ANSWER-Requires the accountant to give special accounting
treatment to items of significant value.
Petty cash imprest system - CORRECT ANSWER-A system that helps to control petty cash by making
available a fixed amount of money at a regular interval.
Quantity and early settlement discount - CORRECT ANSWER-Discounts given to customers for
purchasing in large quantities or settling invoices early.
Debit note - CORRECT ANSWER-A document issued by a supplier to a buyer, indicating the amount
owed for goods or services returned.
Materiality, substance over form, money measurement - CORRECT ANSWER-Accounting concepts
where materiality allows recognition of only items with physical existence, substance over form
shows legal form in statements, and money measurement recognizes items measurable in monetary
terms.
, Journal entry for share issue - CORRECT ANSWER-Debit Bank, Credit Share Capital and Share
Premium for the proceeds received from issuing shares at a premium.
Share capital - CORRECT ANSWER-The portion of a company's equity that has been obtained by
selling shares in the company to a shareholder.
Share premium - CORRECT ANSWER-The additional amount received by a company above the face
value of its shares when they are issued.
Bank - CORRECT ANSWER-A financial institution where customers can deposit and withdraw money,
typically offering savings accounts, loans, and mortgages.
Statement of Financial Position - CORRECT ANSWER-A financial statement that shows a company's
assets, liabilities, and equity at a specific point in time
Statement of Income and Expenditure - CORRECT ANSWER-Financial statement showing income and
expenses over a period
International Accounting Standards Board (IASB) - CORRECT ANSWER-An independent standard-
setting body that promotes the use and application of international financial reporting standards.
Books of prime entry - CORRECT ANSWER-Original record in which transactions are first recorded
before being classified and entered into the general ledger.
IAS16-Property, Plant and Equipment - CORRECT ANSWER-An accounting standard that deals with
the recognition, measurement, and disclosure of property, plant, and equipment.
Sole trader - CORRECT ANSWER-An individual who owns and operates a business alone, assuming all
responsibilities and keeping all profits.
Partnership business - CORRECT ANSWER-A business structure in which two or more individuals
manage and operate a business in accordance with the terms and objectives set out in a Partnership
Deed.
Trade receivables control account - CORRECT ANSWER-An account that records the total amount of
accounts receivable owed to a business by its customers.
2025
Imprest system - CORRECT ANSWER-A system where an accountant pays for expenses, maintains and
provides records of the expenses at a regular interval.
Capital expenditure - CORRECT ANSWER-Expenditure for obtaining, developing, and improving long-
term assets and not for day-to-day running expenses.
Trial balance errors - CORRECT ANSWER-Errors of transposition, omission, principle, commission, or
compensating errors that cause the trial balance totals to be unequal.
Materiality concept - CORRECT ANSWER-Requires the accountant to give special accounting
treatment to items of significant value.
Petty cash imprest system - CORRECT ANSWER-A system that helps to control petty cash by making
available a fixed amount of money at a regular interval.
Quantity and early settlement discount - CORRECT ANSWER-Discounts given to customers for
purchasing in large quantities or settling invoices early.
Debit note - CORRECT ANSWER-A document issued by a supplier to a buyer, indicating the amount
owed for goods or services returned.
Materiality, substance over form, money measurement - CORRECT ANSWER-Accounting concepts
where materiality allows recognition of only items with physical existence, substance over form
shows legal form in statements, and money measurement recognizes items measurable in monetary
terms.
, Journal entry for share issue - CORRECT ANSWER-Debit Bank, Credit Share Capital and Share
Premium for the proceeds received from issuing shares at a premium.
Share capital - CORRECT ANSWER-The portion of a company's equity that has been obtained by
selling shares in the company to a shareholder.
Share premium - CORRECT ANSWER-The additional amount received by a company above the face
value of its shares when they are issued.
Bank - CORRECT ANSWER-A financial institution where customers can deposit and withdraw money,
typically offering savings accounts, loans, and mortgages.
Statement of Financial Position - CORRECT ANSWER-A financial statement that shows a company's
assets, liabilities, and equity at a specific point in time
Statement of Income and Expenditure - CORRECT ANSWER-Financial statement showing income and
expenses over a period
International Accounting Standards Board (IASB) - CORRECT ANSWER-An independent standard-
setting body that promotes the use and application of international financial reporting standards.
Books of prime entry - CORRECT ANSWER-Original record in which transactions are first recorded
before being classified and entered into the general ledger.
IAS16-Property, Plant and Equipment - CORRECT ANSWER-An accounting standard that deals with
the recognition, measurement, and disclosure of property, plant, and equipment.
Sole trader - CORRECT ANSWER-An individual who owns and operates a business alone, assuming all
responsibilities and keeping all profits.
Partnership business - CORRECT ANSWER-A business structure in which two or more individuals
manage and operate a business in accordance with the terms and objectives set out in a Partnership
Deed.
Trade receivables control account - CORRECT ANSWER-An account that records the total amount of
accounts receivable owed to a business by its customers.
