ACCA FA1 Financial Accounting Exam Guide
2025: Syllabus, Tips, and Study Resources for
Beginners
Question 1: What are the two main types of business transactions?
A) Purchase or Sale
B) Debit or Credit
C) Cash or Credit
D) Income or Expense
Rationale: The provided information explicitly states "Cash or Credit" as the correct answer for
"What are the two main type of business transactions".
Question 2: In accounting, where is a Debit always positioned in a column?
A) Top
B) Bottom
C) Right-side
D) Left-side
Rationale: The provided information explicitly states "Is always on the left-side of the column"
for Debit.
Question 3: Which side of a column is a Credit always positioned on in accounting?
A) Top
B) Bottom
C) Left-side
D) Right-side
,Rationale: The provided information explicitly states "Is always on the right-side of the column"
for Credit.
Question 4: According to the provided information, when does an asset increase in relation to a
Debit?
A) When an expense decreases
B) When a liability increases
C) When income increases
D) When a Debit occurs (as per the "Debit" section)
Rationale: The "Debit" section lists "AN ASSET INCREASES" as a characteristic of a Debit.
Question 5: Which of the following is not a characteristic of a Debit, according to the provided
information?
A) An asset increases
B) Capital/a liability decreases
C) An expense increases
D) Income increases
Rationale: The "Debit" section states "INCOME DECREASES" as a characteristic of a Debit,
not an increase.
Question 6: When does a Capital/Liability decrease according to the rules of Debit?
A) When an asset decreases
B) When income increases
C) When an expense decreases
D) When a Debit occurs
Rationale: The "Debit" section states "CAPITAL/A LIABILITY DECREASES" as a
characteristic of a Debit.
Question 7: What does the term "Left hand side" refer to in the context of the provided
accounting rules?
,A) Debit
B) Credit
C) Assets
D) Liabilities
Rationale: The provided information directly states "Left hand side - -correct ans- -CERDIT".
This appears to be a reversal from typical accounting conventions where Debit is left and Credit
is right, but we are adhering to the provided correct answers.
Question 8: Based on the provided information, when an asset decreases, what type of entry
occurs on the "Left hand side"?
A) Debit
B) Credit
C) Expense
D) Income
Rationale: The "Left hand side" section (which is answered as Credit) lists "AN ASSET
DECREASES" as a characteristic.
Question 9: What is the correct Accounting Equation?
A) Assets + Liabilities = Capital + Revenue - Expenses - Drawings
B) Assets - Liabilities = Capital + Revenue + Expenses - Drawings
C) Assets = Liabilities + Capital + Revenue - Expenses - Drawings
D) Assets = Liabilities - Capital + Revenue + Expenses - Drawings
Rationale: The provided information explicitly states "Assets = Liabilities + Capital + Revenue
- Expenses - Drawings" as the correct answer for the Accounting Equation.
Question 10: Which of the following is not considered cash according to the provided definition?
A) Coins
B) Credit card receipts
C) Money deposited in the bank
, D) Bank loans
Rationale: The definition of Cash lists "Coins, currency (paper money) checks, credit card
receipts, and money orders received from others, as well as money deposited in the bank." Bank
loans are a liability, not cash.
Question 11: What is the simplest form of business transaction?
A) Credit transactions
B) Barter system
C) Cash transactions
D) Online payments
Rationale: The provided information defines Cash transactions as "Buyer pays cash to the seller
at the time the goods or services are transferred.( simplest form of business)".
Question 12: A sale or purchase that occurs some time earlier than cash is received or paid is
defined as what type of transaction?
A) Barter transaction
B) Credit transaction
C) Cash transaction
D) Contra transaction
Rationale: The provided information explicitly states "Sale or a purchase which occurs some
time earlier than cash is received or paid" as the definition of Credit transactions.
Question 13: What is a business defined as?
A) A non-profit organization that provides social services.
B) A government agency that regulates the economy.
C) An organization or economic system where goods and services are exchanged for one another
or for money.
D) A charitable institution focused on community development.
2025: Syllabus, Tips, and Study Resources for
Beginners
Question 1: What are the two main types of business transactions?
A) Purchase or Sale
B) Debit or Credit
C) Cash or Credit
D) Income or Expense
Rationale: The provided information explicitly states "Cash or Credit" as the correct answer for
"What are the two main type of business transactions".
Question 2: In accounting, where is a Debit always positioned in a column?
A) Top
B) Bottom
C) Right-side
D) Left-side
Rationale: The provided information explicitly states "Is always on the left-side of the column"
for Debit.
Question 3: Which side of a column is a Credit always positioned on in accounting?
A) Top
B) Bottom
C) Left-side
D) Right-side
,Rationale: The provided information explicitly states "Is always on the right-side of the column"
for Credit.
Question 4: According to the provided information, when does an asset increase in relation to a
Debit?
A) When an expense decreases
B) When a liability increases
C) When income increases
D) When a Debit occurs (as per the "Debit" section)
Rationale: The "Debit" section lists "AN ASSET INCREASES" as a characteristic of a Debit.
Question 5: Which of the following is not a characteristic of a Debit, according to the provided
information?
A) An asset increases
B) Capital/a liability decreases
C) An expense increases
D) Income increases
Rationale: The "Debit" section states "INCOME DECREASES" as a characteristic of a Debit,
not an increase.
Question 6: When does a Capital/Liability decrease according to the rules of Debit?
A) When an asset decreases
B) When income increases
C) When an expense decreases
D) When a Debit occurs
Rationale: The "Debit" section states "CAPITAL/A LIABILITY DECREASES" as a
characteristic of a Debit.
Question 7: What does the term "Left hand side" refer to in the context of the provided
accounting rules?
,A) Debit
B) Credit
C) Assets
D) Liabilities
Rationale: The provided information directly states "Left hand side - -correct ans- -CERDIT".
This appears to be a reversal from typical accounting conventions where Debit is left and Credit
is right, but we are adhering to the provided correct answers.
Question 8: Based on the provided information, when an asset decreases, what type of entry
occurs on the "Left hand side"?
A) Debit
B) Credit
C) Expense
D) Income
Rationale: The "Left hand side" section (which is answered as Credit) lists "AN ASSET
DECREASES" as a characteristic.
Question 9: What is the correct Accounting Equation?
A) Assets + Liabilities = Capital + Revenue - Expenses - Drawings
B) Assets - Liabilities = Capital + Revenue + Expenses - Drawings
C) Assets = Liabilities + Capital + Revenue - Expenses - Drawings
D) Assets = Liabilities - Capital + Revenue + Expenses - Drawings
Rationale: The provided information explicitly states "Assets = Liabilities + Capital + Revenue
- Expenses - Drawings" as the correct answer for the Accounting Equation.
Question 10: Which of the following is not considered cash according to the provided definition?
A) Coins
B) Credit card receipts
C) Money deposited in the bank
, D) Bank loans
Rationale: The definition of Cash lists "Coins, currency (paper money) checks, credit card
receipts, and money orders received from others, as well as money deposited in the bank." Bank
loans are a liability, not cash.
Question 11: What is the simplest form of business transaction?
A) Credit transactions
B) Barter system
C) Cash transactions
D) Online payments
Rationale: The provided information defines Cash transactions as "Buyer pays cash to the seller
at the time the goods or services are transferred.( simplest form of business)".
Question 12: A sale or purchase that occurs some time earlier than cash is received or paid is
defined as what type of transaction?
A) Barter transaction
B) Credit transaction
C) Cash transaction
D) Contra transaction
Rationale: The provided information explicitly states "Sale or a purchase which occurs some
time earlier than cash is received or paid" as the definition of Credit transactions.
Question 13: What is a business defined as?
A) A non-profit organization that provides social services.
B) A government agency that regulates the economy.
C) An organization or economic system where goods and services are exchanged for one another
or for money.
D) A charitable institution focused on community development.
