ICAEW ACA Accounting Exam Questions and Answers 100% Pass

ICAEW ACA Accounting Exam Questions and Answers 100% Pass Accounting - Answer- A way of recording, analysing and summarising transactions of an entity. Statement of Profit and Loss - Answer- It reflects the performance of a business over a period of time. Statement of Financial Position - Answer- It reflects the position of a business at a point in time. Users of Accounting - Answer- Any organisation/business/individual who needs to keep track of their income, expenses, assets and liabilities. Types of Business Entity - Answer- • Sole trader • Partnership • Limited Liability Companies SOFP - Answer- A list of assets and liabilities of the business. SPL - Answer- The revenue and expense of a business for the accounting period. Purpose of SOFP - Answer- To show the total value of the net assets of the business at the end of a period. Purpose of SPL - Answer- To show the amount of profit and loss that the business has made during that period. Stakeholders for financial information - Answer- • Managers/Directors • Owners of the company • Trade contracts • Finance providers •HMRC Capital Expenditure - Answer- Expenditure which results in the acquisition of non- current assets or an improvement or enhancement of their earning capacity (>1yr) (NCA) Revenue Expenditure - 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) - Answer- • Professional Behaviour • Objectivity • Professional Competence & due care • Confidentiality • Integrity Business entity concept - Answer- A business is a separate entity from its owner. Capital - Answer- How much the business owes back to the owner. Year-end capital Equation - Answer- Bal. at start of year + net profit + capital inj. - drawings Share capital Equation - Answer- Bal. at start of year + Further investment in shares by new stakeholders Retained Earnings Equation - Answer- Bal. at start of year + Profit - dividends Accounting equation - Answer- Assets = Liability + Capital Cost of Sales/Inventory Equation - Answer- Opening inv. + Purchases - Closing inventory Types of discounts - Answer- • Trade (Bulk Buy) • Early settlement (Prompt) Total Staff Costs Equation - Answer- Gross salaries + Employer's NICs Components of Gross Salary - Answer- • Net Salary • Income tax (PAYE) • National Insurance Conceptual Framework - Answer- Sets out the concepts that underline the preparation & presentation of financial statements. Objective of Financial Statements - Answer- To provide information about the reporting entity, that is useful to a wide variety of users