FAC 1601 FINANCIAL ACCOUNTING PRINCIPLES FOR LAW PRACTITIONERS
FAC 1601 FINANCIAL ACCOUNTING
PRINCIPLES FOR LAW PRACTITIONERS EXAM
2024/2025 (UNISA)
1. What is the primary purpose of financial accounting?
a) To record and track personal expenses
b) To provide information that is useful for making business decisions
c) To calculate tax liabilities for businesses
d) To manage day-to-day operations of a business
Answer: b) To provide information that is useful for making business decisions
2. The accounting equation is best represented by which of the following?
a) Assets = Liabilities + Equity
b) Revenue = Assets - Expenses
c) Liabilities = Assets + Equity
d) Equity = Revenue - Liabilities
Answer: a) Assets = Liabilities + Equity
3. Which of the following is classified as a current asset?
,FAC 1601 FINANCIAL ACCOUNTING PRINCIPLES FOR LAW PRACTITIONERS
a) Equipment
b) Accounts receivable
c) Land
d) Building
Answer: b) Accounts receivable
4. Depreciation is applied to which type of asset?
a) Current assets
b) Non-current liabilities
c) Non-current assets
d) Current liabilities
Answer: c) Non-current assets
5. What does the matching principle state?
a) Revenues should be recognized when earned
b) Expenses should be recognized when incurred
c) Revenues should be matched with the expenses that generate them
d) Assets should be equal to liabilities
Answer: c) Revenues should be matched with the expenses that generate them
,FAC 1601 FINANCIAL ACCOUNTING PRINCIPLES FOR LAW PRACTITIONERS
6. Which financial statement provides information on a company’s financial position at
a specific point in time?
a) Income statement
b) Balance sheet
c) Cash flow statement
d) Statement of changes in equity
Answer: b) Balance sheet
7. The accrual basis of accounting records revenues:
a) When cash is received
b) When services are performed, regardless of when cash is received
c) When cash is paid out
d) At the end of the accounting period
Answer: b) When services are performed, regardless of when cash is received
8. Which of the following would increase equity?
a) Paying off a liability
b) Earning revenue
, FAC 1601 FINANCIAL ACCOUNTING PRINCIPLES FOR LAW PRACTITIONERS
c) Incurring an expense
d) Purchasing an asset
Answer: b) Earning revenue
9. What type of account is "prepaid expenses"?
a) Liability
b) Asset
c) Equity
d) Revenue
Answer: b) Asset
10. A company issues shares. What impact does this have on the accounting equation?
a) Increases assets and decreases liabilities
b) Increases equity and increases assets
c) Decreases liabilities and decreases equity
d) Increases liabilities and decreases assets
Answer: b) Increases equity and increases assets
11. Which of the following transactions would not affect the accounting equation?
FAC 1601 FINANCIAL ACCOUNTING
PRINCIPLES FOR LAW PRACTITIONERS EXAM
2024/2025 (UNISA)
1. What is the primary purpose of financial accounting?
a) To record and track personal expenses
b) To provide information that is useful for making business decisions
c) To calculate tax liabilities for businesses
d) To manage day-to-day operations of a business
Answer: b) To provide information that is useful for making business decisions
2. The accounting equation is best represented by which of the following?
a) Assets = Liabilities + Equity
b) Revenue = Assets - Expenses
c) Liabilities = Assets + Equity
d) Equity = Revenue - Liabilities
Answer: a) Assets = Liabilities + Equity
3. Which of the following is classified as a current asset?
,FAC 1601 FINANCIAL ACCOUNTING PRINCIPLES FOR LAW PRACTITIONERS
a) Equipment
b) Accounts receivable
c) Land
d) Building
Answer: b) Accounts receivable
4. Depreciation is applied to which type of asset?
a) Current assets
b) Non-current liabilities
c) Non-current assets
d) Current liabilities
Answer: c) Non-current assets
5. What does the matching principle state?
a) Revenues should be recognized when earned
b) Expenses should be recognized when incurred
c) Revenues should be matched with the expenses that generate them
d) Assets should be equal to liabilities
Answer: c) Revenues should be matched with the expenses that generate them
,FAC 1601 FINANCIAL ACCOUNTING PRINCIPLES FOR LAW PRACTITIONERS
6. Which financial statement provides information on a company’s financial position at
a specific point in time?
a) Income statement
b) Balance sheet
c) Cash flow statement
d) Statement of changes in equity
Answer: b) Balance sheet
7. The accrual basis of accounting records revenues:
a) When cash is received
b) When services are performed, regardless of when cash is received
c) When cash is paid out
d) At the end of the accounting period
Answer: b) When services are performed, regardless of when cash is received
8. Which of the following would increase equity?
a) Paying off a liability
b) Earning revenue
, FAC 1601 FINANCIAL ACCOUNTING PRINCIPLES FOR LAW PRACTITIONERS
c) Incurring an expense
d) Purchasing an asset
Answer: b) Earning revenue
9. What type of account is "prepaid expenses"?
a) Liability
b) Asset
c) Equity
d) Revenue
Answer: b) Asset
10. A company issues shares. What impact does this have on the accounting equation?
a) Increases assets and decreases liabilities
b) Increases equity and increases assets
c) Decreases liabilities and decreases equity
d) Increases liabilities and decreases assets
Answer: b) Increases equity and increases assets
11. Which of the following transactions would not affect the accounting equation?
