FAC 1502 MOCK UPDATED ACTUAL EXAM QUESTIONS CORRECT ANSWERS GRADED A
PLUS
Question:
PLANNING DECISIONS.
Answer:
Financial information is used to determine future actions. Historical information provided by the
accounting process serves as a basis for forecasting.
Question:
CONTROL.
Answer:
Using financial information to evaluate the results of financial activities.
Question:
THE FUNCTION OF ACCOUNTING.
Answer:
1. The value added to the networth of a person/entity during a particular period. 2. The accumulated
networth of that person/entity
Question:
PROFIT ENTITIES.
Answer:
Sole traders; Partnerships; Close Corporations; Companies
Question:
,NON-PROFIT ENTITES.
Answer:
Clubs; Charitable Organisations; Churches; Educational Institutions; Trusts
Question:
PUBLIC SECTOR.
Answer:
The Government; Provinces; Departments; Boards and Commissions; Municipalities
Question:
USERS OF FINANCIAL INFORMATION.
Answer:
1. Investors - Providers of capital. Concerned with the risk involved in their investment. Need
information to decide whether to invest, hold, or withdraw funds. 2. Employees - Interested in
entity's stability and profitability for benefits and job security. 3. Lenders - Use financial
information to determine if loans can be paid back with interest. 4. Suppliers and other trade
creditors - Use informations for assurance that amounts owed are paid on time. 5. Customers - Need
to know the state of the entity for reliability. 6. Government and their agencies - Use financial
information for taxation, policies, and statistical purposes. 7. Public - Entities often contribute to the
local economy by employing people and local structures:
Question:
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME.
Answer:
Financial results --> Financial Performance (financial period) -- > Financial Position
Question:
STATEMENT OF CHANGES IN EQUITY.
Answer:
, Reflects the profit or total comprehensive income and reflects the capital or equity.
Question:
STATEMENT OF FINANCIAL POSITION.
Answer:
Reflects the networth of the entity at a specific time. Determined in terms of assets and interests.
Affected by the entity's economic resources, structure, liquidity, solvency, capacity to adapt to
economic changes.
Question:
STATEMENT OF CASH FLOWS.
Answer:
The ability to generate cash will determine whether the entity will be able to meet its economic
comittments.
Question:
DOMAINS OF ACCOUNTING.
Answer:
1. Financial accounting: External users - Creditors; Clients; Banking institutions. 2. Management
accounting: Internal users - Management; Personnel
Question:
ACCOUNTING PRINCIPLES.
Answer:
The techniques used in the practice of accounting. Conceptual and Theoretical.
Question:
ACCOUNTING POLICY.
PLUS
Question:
PLANNING DECISIONS.
Answer:
Financial information is used to determine future actions. Historical information provided by the
accounting process serves as a basis for forecasting.
Question:
CONTROL.
Answer:
Using financial information to evaluate the results of financial activities.
Question:
THE FUNCTION OF ACCOUNTING.
Answer:
1. The value added to the networth of a person/entity during a particular period. 2. The accumulated
networth of that person/entity
Question:
PROFIT ENTITIES.
Answer:
Sole traders; Partnerships; Close Corporations; Companies
Question:
,NON-PROFIT ENTITES.
Answer:
Clubs; Charitable Organisations; Churches; Educational Institutions; Trusts
Question:
PUBLIC SECTOR.
Answer:
The Government; Provinces; Departments; Boards and Commissions; Municipalities
Question:
USERS OF FINANCIAL INFORMATION.
Answer:
1. Investors - Providers of capital. Concerned with the risk involved in their investment. Need
information to decide whether to invest, hold, or withdraw funds. 2. Employees - Interested in
entity's stability and profitability for benefits and job security. 3. Lenders - Use financial
information to determine if loans can be paid back with interest. 4. Suppliers and other trade
creditors - Use informations for assurance that amounts owed are paid on time. 5. Customers - Need
to know the state of the entity for reliability. 6. Government and their agencies - Use financial
information for taxation, policies, and statistical purposes. 7. Public - Entities often contribute to the
local economy by employing people and local structures:
Question:
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME.
Answer:
Financial results --> Financial Performance (financial period) -- > Financial Position
Question:
STATEMENT OF CHANGES IN EQUITY.
Answer:
, Reflects the profit or total comprehensive income and reflects the capital or equity.
Question:
STATEMENT OF FINANCIAL POSITION.
Answer:
Reflects the networth of the entity at a specific time. Determined in terms of assets and interests.
Affected by the entity's economic resources, structure, liquidity, solvency, capacity to adapt to
economic changes.
Question:
STATEMENT OF CASH FLOWS.
Answer:
The ability to generate cash will determine whether the entity will be able to meet its economic
comittments.
Question:
DOMAINS OF ACCOUNTING.
Answer:
1. Financial accounting: External users - Creditors; Clients; Banking institutions. 2. Management
accounting: Internal users - Management; Personnel
Question:
ACCOUNTING PRINCIPLES.
Answer:
The techniques used in the practice of accounting. Conceptual and Theoretical.
Question:
ACCOUNTING POLICY.
