Section 1 Revision Questions Accounting Principles and Concepts

Jul 17, 2026

Uploaded by Asher

Section 1 revision questions cover core accounting principles and practical bookkeeping topics used for assessment and self-study. Content includes how accounting standards improve financial reporting, the going concern and business entity concepts, and the debit-and-credit recording logic. The material also addresses defining assets and liabilities, effects on the accounting equation from credit purchases, non-current assets and depreciation using the reducing balance method, and disposal profit/loss factors. Additional sections cover control accounts and reconciliations, trial balance purpose and adjustments, inventory valuation, accruals and prepayments, and key elements of final accounts and partnership accounting, plus multiple-choice concept checks.

LanguageEnglish

CategoryExam

FormatPDF

Pages16

Reading Time40 min

AccessFree to download

# Section 1 REVISION QUESTIONS ACCOUNTING PRINCIPLES AND CONCEPTS 1 State two ways in which accounting standards (IASs and IFRSs)improve financialaccounting.(3marks) 2 Briefly explain the going concern concept.(2 marks) 3 The Conceptual Framework for Financial Reporting states that in order to be useful,financial information should have the following fundamental and enhancing qualitativecharacteristics: (i) relevance (ii)faithful representation (iii)comparability (iv) verifiability (v) timelines,and (vi) understandability Briefly explain any two of these qualitative characteristics. (4 marks) ## 4 Briefly explain the business entity concept and its impact on the recording of transactions. (2 marks) ## 5 Explain why every transaction is recorded using both a debit entry and a credit entry. (3marks) # BASIC BOOKKEEPING 6 Define the terms 'asset'and 'liability',and provide one example of each.(4 marks) 7 Explain how each element of the accounting equation is affected when goods for resale arepurchased on credit.(3 marks) 少 NON-CURRENT ASSETS AND DEPRECIATION 8 Give three reasons why there may be a difference between the assets listed on the non-current asset register and the physical presence of assets.(3marks) 9 Your friend,a self-employed motor mechanic,has recently disposed of an old set of rampsfrom his garage.He is unsure how he can calculate whether he has made a profit or loss onthe disposal of this asset. Briefly explain to him what factors he would need to account for in calculating the profit orloss on sale.(4 marks) 10 Work out the annual depreciation charge for five years,for a non-current asset costing$15,000,to be depreciated at a rate of 25%using the reducing balance method.(4 marks) # CONTROL ACCOUNTS,RECONCILIATIONS AND ERRORS 11 You are helping a friend,a self-employed hairdresser,with her financial record keeping.Younotice that she has posted the purchase of a new set of adjustable chairs for the salon tothe repairs account.You bring this error to her attention. Briefly explain what type of error this is and why it is important to correct this posting in theaccounts.(3 marks) 12 A friend of yours in business as an hotelier says whenever she receives a bank statementthe balance rarely agrees with that shown in her cash book. Briefly explain the reason for such differences.(3 marks) ## 13 Identify and explain two reasons for maintaining control accounts.(4 marks) # ADJUSTMENTS TO THE TRIAL BALANCE (2 marks) 14 Explain the main purpose of a trial balance. 15 Briefly explain the differences between a bad debt and a doubtful debt and the accountingtreatment of each.(4 marks) 16 The inventory sheet of a business retailing children's clothes showed a batch of summert-shirts at a cost of $300.It seems clear that these will be later included in a sale and willbeexpected to realise $180. Briefly explain at what value they should be correctly shown in the inventory valu

Jul 17, 2026

Uploaded by Asher