ICAEW Foundational accounting Terms Questions and ascertained Answers 2023/2024

ICAEW Foundational accounting Terms Questions and ascertained Answers 2023/2024 Accounting - correct answer a way of recording, analyzing and summarizing transactions of an entity. Statement of profit and loss - correct answer it reflects the performance of a business over a period of time. Statement of financial position - correct answer it reflects the position of a business at a point in time. Users of accounting - correct answer any organization/business/individual who needs to keep track of their income, expenses, assets and liabilities. 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