ICAEW ACA Accounting Exam Updated
Actual Question and Answer (2026/2027)
| Detailed Rationales
• Accounting . CORRECT ANSWER: Collecting, recording, summarising and
communicating financial information.
• Revenue expenditure . CORRECT ANSWER: Expenses incurred in everyday trading.
• Cost of sales . CORRECT ANSWER: Direct costs incurred in selling goods or
services adjusted for movements in inventory.
• Gross profit . CORRECT ANSWER: The excess of revenue over cost of sales.
• Other expenses . CORRECT ANSWER: All other costs incurred by the business.
• Net profit . CORRECT ANSWER: The excess of revenue over total expenses.
• Capital expenditure . CORRECT ANSWER: Purchase/improvement of tangible non-
current assets.
• Non-current assets . CORRECT ANSWER: Assets used over a period of more than 1
year.
• Current assets . CORRECT ANSWER: Assets that continually flow through the
business and are generally used within 1 year.
• Intangible assets . CORRECT ANSWER: Assets that have no physical existence but
still have an ongoing value to the business.
• Tangible assets . CORRECT ANSWER: Physical objects that can be seen/touched.
• Liability . CORRECT ANSWER: A present obligation arising from past events,
settlement of which will result in an economic outflow of resources.
• Current liabilities . CORRECT ANSWER: Amounts repayable within 1 year.
• Non-current liabilities . CORRECT ANSWER: Amounts repayable after more than 1
year.
• Debit . CORRECT ANSWER: Money coming in.
• Credit . CORRECT ANSWER: Money going out of a bank account.
, • Invoice . CORRECT ANSWER: A contractual request for payment at a later date.
• Receipt . CORRECT ANSWER: Records a cash transaction (payment or sale).
• Credit note . CORRECT ANSWER: Effectively a reverse invoice used when goods
are returned.
• Statement . CORRECT ANSWER: Records all invoices, credit notes and any
payments made, stating a balance of how much a business owes another business.
• Book of prime entry . CORRECT ANSWER: The first place we record a transaction.
• Cash book . CORRECT ANSWER: Records cash transactions in or out of the bank
account.
• Sales day book . CORRECT ANSWER: Records credit sales only (list of sales
invoices).
• Purchase day book . CORRECT ANSWER: Records credit purchases only (list of
purchase invoices).
• Petty cash book . CORRECT ANSWER: Records small cash transactions.
• Journal . CORRECT ANSWER: Records everything else, including correction of
errors and year-end adjustments.
• Double entry . CORRECT ANSWER: For every debit (DR) we record an equal and
opposite credit (CR).
• Adjustment . CORRECT ANSWER: A change made when an assumption about
customer payments is incorrect.
• Cr Sales Income . CORRECT ANSWER: Credit Sales Income when a customer does
not pay early as assumed.
• Dr Sales Income . CORRECT ANSWER: Debit Sales Income when a customer pays
early contrary to assumptions.
• Dr Receivables . CORRECT ANSWER: Debit Receivables when a cash refund is
given.
• Cr Cash . CORRECT ANSWER: Credit Cash when a cash refund is issued.
• Control Account . CORRECT ANSWER: An account showing how much we owe or
are owed in the statement of financial position.
Actual Question and Answer (2026/2027)
| Detailed Rationales
• Accounting . CORRECT ANSWER: Collecting, recording, summarising and
communicating financial information.
• Revenue expenditure . CORRECT ANSWER: Expenses incurred in everyday trading.
• Cost of sales . CORRECT ANSWER: Direct costs incurred in selling goods or
services adjusted for movements in inventory.
• Gross profit . CORRECT ANSWER: The excess of revenue over cost of sales.
• Other expenses . CORRECT ANSWER: All other costs incurred by the business.
• Net profit . CORRECT ANSWER: The excess of revenue over total expenses.
• Capital expenditure . CORRECT ANSWER: Purchase/improvement of tangible non-
current assets.
• Non-current assets . CORRECT ANSWER: Assets used over a period of more than 1
year.
• Current assets . CORRECT ANSWER: Assets that continually flow through the
business and are generally used within 1 year.
• Intangible assets . CORRECT ANSWER: Assets that have no physical existence but
still have an ongoing value to the business.
• Tangible assets . CORRECT ANSWER: Physical objects that can be seen/touched.
• Liability . CORRECT ANSWER: A present obligation arising from past events,
settlement of which will result in an economic outflow of resources.
• Current liabilities . CORRECT ANSWER: Amounts repayable within 1 year.
• Non-current liabilities . CORRECT ANSWER: Amounts repayable after more than 1
year.
• Debit . CORRECT ANSWER: Money coming in.
• Credit . CORRECT ANSWER: Money going out of a bank account.
, • Invoice . CORRECT ANSWER: A contractual request for payment at a later date.
• Receipt . CORRECT ANSWER: Records a cash transaction (payment or sale).
• Credit note . CORRECT ANSWER: Effectively a reverse invoice used when goods
are returned.
• Statement . CORRECT ANSWER: Records all invoices, credit notes and any
payments made, stating a balance of how much a business owes another business.
• Book of prime entry . CORRECT ANSWER: The first place we record a transaction.
• Cash book . CORRECT ANSWER: Records cash transactions in or out of the bank
account.
• Sales day book . CORRECT ANSWER: Records credit sales only (list of sales
invoices).
• Purchase day book . CORRECT ANSWER: Records credit purchases only (list of
purchase invoices).
• Petty cash book . CORRECT ANSWER: Records small cash transactions.
• Journal . CORRECT ANSWER: Records everything else, including correction of
errors and year-end adjustments.
• Double entry . CORRECT ANSWER: For every debit (DR) we record an equal and
opposite credit (CR).
• Adjustment . CORRECT ANSWER: A change made when an assumption about
customer payments is incorrect.
• Cr Sales Income . CORRECT ANSWER: Credit Sales Income when a customer does
not pay early as assumed.
• Dr Sales Income . CORRECT ANSWER: Debit Sales Income when a customer pays
early contrary to assumptions.
• Dr Receivables . CORRECT ANSWER: Debit Receivables when a cash refund is
given.
• Cr Cash . CORRECT ANSWER: Credit Cash when a cash refund is issued.
• Control Account . CORRECT ANSWER: An account showing how much we owe or
are owed in the statement of financial position.
