Exam (elaborations)
ACA [ICAEW] – ACCOUNTING 2024 SOLVED QUESTIONS WITH 100% CORRECT ANSWERS!!
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ACA [ICAEW] – ACCOUNTING 2024 SOLVED QUESTIONS WITH 100% CORRECT ANSWERS!!
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ACA [ICAEW] – ACCOUNTING 2024 SOLVED QUESTIONS WITH 100% CORRECT ANSWERS!!Books of Original Entry Answer- 1. Cash Book
2. Sales Day Book (Credit Sales)
3. Purchases Day Book (Credit Purchases)
4. Petty Cash Book
5. Journal Book
6. The Payroll
Statement of Financial Position Answer- SOFP
- Snapshot of assets controlled, liabilities owned and capital at a point in time
Statement of Profit and Loss Answer- Income and expenses over a period of time
The Business entity concept Answer- Business transactions should be kept separate from the personal transaction of the owner
Qualitative characteristics of financial information Answer- Two fundamental concepts
1. Relevance [Assists users in evaluating past and predicting future events + Materiality]
2. Faithful Representation [Neutral; Free from Error; Complete]
Four Enhancing Characteristics
1. Verifiability [Can be proven]
2. Timeliness [In time to influence decisions of users]
3. Understandability [Readily understandable by people with reasonable knowledge]
4. Comparability [Consistency]
Accrual basis of accounting Answer- - Items recognized as assets, liabilities, equity, income and expenses (elements of FS) when they satisfy definitions and recognition criteria for those elements in conceptual framework
- Transactions recognized when they occur
!! Income earned must be matched against the expenditure incurred in earning it Accrual Concept Answer- Effects of transactions reognized when they occur - not when cash received/paid
IFAC Code of Ethics Answer- 1. Integrity
2. Objectivity
3. Professional Competence and Due Care
4. Confidentiality
5. Professional Behavior
Accounting Equation Answer- Assets = Capital + Liabilities
same:
Assets - Liabilities = Capital + Profit - Drawings
ICAEW Code of Ethics Answer- - Demonstrate highest standards of professional conduct and take public interest into consideration
- Maintain reputation of accounting profession
Payroll cost Answer- Total Payroll cost = Gross Pay + Employer NI + Employer Pension
Net Pay by Employer Answer- Gross Pay
- Employees NI
- PAYE
= Net Pay
Trial Balance Definition Answer- A list of balances from each ledger account split into debits and credits
Cost of sales [function] Answer- Opening inventory + Purchases + Carriage Inwards
- Closing Inventory
Carriage Inwards vs. Outwards Answer- Carriage inwards: added to cost of purchases therefore included in COS and Gross Profit
Carriage outwards: distribution cost deducted from gross profit in Statement of Profit and Loss
Net Realizable Value Answer- NRV of an item is net selling proceeds after all cost needing to be incurred to sell item have been deducted
Closing and Opening Inventory Entries Answer- Closing:
Dr. Inventory
Cr. Cost of Sales
Opening:
Dr. Cost of Sales
Cr. Inventory
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