ACCA Applied Skills Practice Questions — All Questions
AllFinancial AccountingManagement AccountingFinancial Reporting (IFRS)Audit & AssuranceFinancial Management
4 questions
Financial Reporting (IFRS)
The going concern assumption means financial statements assume the entity will:
- a.Continue operating for the foreseeable future✓
- b.Be sold immediately
- c.Stop trading next month
- d.Never pay tax
Going concern assumes continued operation for the foreseeable future.
Financial Reporting (IFRS)
Under the accruals concept, revenue and costs are recognized when:
- a.Cash changes hands
- b.The year ends
- c.Tax is due
- d.Earned or incurred, not when cash is received or paid✓
Accruals recognize items when earned/incurred regardless of cash timing.
Financial Reporting (IFRS)
Which is a fundamental qualitative characteristic of useful financial information (IFRS Framework)?
- a.Complexity
- b.Length
- c.Optimism
- d.Faithful representation✓
Relevance and faithful representation are the fundamental qualitative characteristics.
Financial Reporting (IFRS)
Prudence in accounting means:
- a.Ignoring losses
- b.Not overstating assets or income, and not understating liabilities✓
- c.Recognizing gains early
- d.Overstating profits
Prudence exercises caution so assets/income are not overstated.