ICAEW ACA Accounting Exam
Questions and Answers
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.
Questions and Answers
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.
