ACCA Definitions FA1 & MA1 Questions With Complete Solutions

Absorption costing correct answer: focuses on the total cost of producing one unit of output, includes fixed production overheads in valuation cost of production. Account correct answer: is a location where all items relating to one particular group are recorded. For example, cash items are recorded in the cash account. Account code correct answer: is a unique group of numbers and/or letters that is used to identify an item and classify it into a particular group. Accounts receivable correct answer: These are accounts for customers who are given credit terms - ie they have the goods in advance of payment. They then owe the business money and this money is receivable by the business Accounting equation correct answer: is a formula underlying the statement of financial position. It is: ASSETS - LIABILITIES = CAPITAL. The expanded accounting equation is derived from it as: ASSETS+DRAWINGS+EXPENDITURE = CAPITAL+LIABILITIES+INCOME Aged receivables correct answer: Analysis showing all the outstanding amounts of money owed by each customer divided by the date it is due, so it is clear how overdue the amounts are. Aged payables correct answer: Analysis showing all the outstanding amounts of money owed to each supplier and how overdue it is. Analysed cash book correct answer: This type of cash book analyses the money coming in and