WA3

Question 1

The objectivity theory states that accounting information recorded must be supported by reliable and verifiable evidence so that financial statements will be — — — and biases.

Answer 1

free from opinions

Question 2

The objectivity theory states that accounting information recorded must be supported by reliable and verifiable evidence so that — — will be free from opinions and biases.

Answer 2

financial statements

Question 3

The objectivity theory states that accounting information recorded must be — — reliable and verifiable evidence so that financial statements will be free from opinions and biases.

Answer 3

supported by

Question 4

The objectivity theory states that — — — must be supported by reliable and verifiable evidence so that financial statements will be free from opinions and biases.

Answer 4

accounting information recorded

Question 5

The objectivity theory states that accounting information recorded must be supported by reliable and verifiable evidence so that financial statements will be free from opinions and —.

Answer 5

biases

Question 6

The objectivity theory states that accounting information recorded must be supported by — and verifiable evidence so that financial statements will be free from opinions and biases.

Answer 6

reliable

Question 7

The objectivity theory states that accounting information recorded must be supported by reliable and — — so that financial statements will be free from opinions and biases.

Thus, transactions are recorded based on source documents as they serve as evidence that transactions have occurred.

Answer 7

verifiable evidence

Question 8

The purpose of an invoice is to inform credit customer of amount —.

Answer 8

owing

Question 9

There is invoice only if — purchase/ sale has taken place.

Answer 9

credit

Question 10

If payment is — upon delivery of goods/ provision of service, there will be no invoice.

Answer 10

immediate

Question 11

Debit note

Answer 11

To increase amount owing due to undercharge

Question 12

To increase amount owing due to undercharge

Answer 12

Debit note

Question 13

Invoice

Answer 13

To inform credit customer of amount owing

Question 14

To inform credit customer of amount owing

Answer 14

Invoice

Question 15

The purpose of a credit note is to — amount amount owing by credit customers due to returns or overcharge.

Answer 15

reduce

Question 16

The purpose of a credit note is to reduce amount amount owing by credit customers due to — or overcharge.

Answer 16

returns

Question 17

A — transaction must first have taken place before there can be a credit note.

Answer 17

credit

Question 18

Credit note

Answer 18

To reduce amount owing

Question 19

To inform credit customer of amount owing

Answer 19

Invoice

Question 20

To reduce amount owing

Answer 20

Credit note

Question 20

Debit note

Answer 20

To increase amount owing due to undercharge

Question 21

To increase amount owing due to undercharge

Answer 21

Debit note

Question 22

Invoice

Answer 22

To inform credit customer of amount owing

Question 23

The source document — will always be issued/ received before the source document credit note can be issued/ received.

Answer 23

invoice

Question 24

The source document invoice will always be issued/ received before the source document --- can be issued/ received.

Answer 24

credit note

Question 25

The purpose of a credit note is to --- amount owing.

Answer 25

reduce

Question 26

Receipt

Answer 26

To acknowledge that payment has been received

Question 27

To acknowledge that payment has been received

Answer 27

Receipt

Question 28

Capital expenditure refers amounts spent to --- and bring non-currents to their intended use. Capital expenditure also includes amounts spent to enhance the non-current assets.

Answer 28

buy

Question 29

Capital expenditure refers amounts spent to buy and bring non-currents to their --- use. Capital expenditure also includes amounts spent to enhance the non-current assets.

Answer 29

intended

Question 30

Capital expenditure refers amounts spent to buy and bring non-currents to their intended use. Capital expenditure also includes amounts spent to --- the non-current assets.

Answer 30

enhance

Question 31

Capital expenditure provide benefits for more than one year while revenue expenditure provide benefits which will be used within one year.

Answer 31

True

Question 32

Capital expenditure provide benefits which will be used within one year while revenue expenditure provide benefits for more than one year.

Answer 32

False

Question 33

Classify the following payment made by Atif Café. Bought a delivery van to deliver its famous muffins.

Answer 33

Capital Expenditure

Question 34

Classify the following payment made by Atif Café. Paid to paint business name and logo on its delivery van.

Answer 34

Capital Expenditure

Question 35

Classify the following payment made by Atif Café. Atif Café paid for annual road tax for its delivery van.

Answer 35

Revenue Expenditure

Question 35

Classify the following payment made by Atif Café. Atif Café paid for diesel for delivery van.

Answer 35

Revenue Expenditure

Question 36

Classify the following payment made by Atif Café. Atif Café paid for annual insurance for its delivery van.

Answer 36

Revenue Expenditure

Question 37

Classify the following payment made by Atif Café. Atif Café paid for repairs to the rear view mirror of its delivery van.

Answer 37

Revenue Expenditure

Question 38

Classify the following payment made by Atif Café. Atif Café paid for servicing and maintenance of its delivery van.

Answer 38

Revenue Expenditure

Question 39

Classify the following payment made by Atif Café. Atif Café paid to upgrade the engine of its delivery van to a more fuel efficient one.

Answer 39

Capital Expenditure

Question 40

Classify the following payment made by Atif Café. Atif Café bought a new air-conditioner for its café.

Answer 40

Capital Expenditure

Question 41

Classify the following payment made by Atif Café. Atif Café paid for delivery of its new air-conditioner.

Answer 41

Capital Expenditure

Question 42

Classify the following payment made by Atif Café. Atif Café paid for installation of new air-conditioner.

Answer 42

Capital Expenditure

Question 43

Classify the following payment made by Atif Café. Atif Café paid for electricity to operate the new air-conditioner.

Answer 43

Revenue Expenditure

Question 44

Classify the following payment made by Atif Café. Atif Café bought a shop house to open a new café.

Answer 44

Capital Expenditure

Question 45

Classify the following payment made by Atif Café. Atif Café paid legal fees to lawyer to process the purchase of the shop house.

Answer 45

Capital Expenditure

Question 46

Classify the following payment made by Atif Café. Atif Café paid stamp duty for the purchase of the shop house. Note: Stamp duty is a one-time tax that must be paid to the government when a person/ business buys a property.

Answer 46

Capital Expenditure

Question 47

State the accounting concept applied when a low value item that last more than an accounting year is recorded as expense (i.e. recorded as revenue expenditure).

Answer 47

Materiality Concept

Question 48

The materiality theory states that a transaction is considered material if it --- --- --- to the decision-making process.

Answer 48

makes a difference

Question 49

The materiality theory states that a transaction is considered material if it makes a difference to the --- process.

Answer 49

decision-making

Question 50

The materiality theory states that a transaction is --- --- if it makes a difference to the decision-making process.

Answer 50

considered material

Question 51

The materiality theory states that a --- is considered material if it makes a difference to the decision-making process.

Answer 51

transaction

Question 52

Depreciation is the --- of cost of a non-current asset over its estimated useful life.

Answer 52

allocation

Question 53

Depreciation is the allocation of --- of a non-current asset over its estimated useful life.

Answer 53

cost

Question 54

Depreciation is the allocation of cost of a --- --- over its estimated useful life.

Answer 54

non-current asset

Question 55

Depreciation is the allocation of cost of a non-current asset over its --- --- ---

Answer 55

estimated useful life

Question 56

The four --- of depreciation are wear and tear, obsolescence, usage and legal limits.

Answer 56

causes

Question 57

The four causes of depreciation are --- --- ---, obsolescence, usage and legal limits.

Answer 57

wear and tear

Question 58

The four causes of depreciation are wear and tear, ---, usage and legal limits.

Answer 58

obsolescence

Question 59

The four causes of depreciation are wear and tear, obsolescence, --- and legal limits.

Answer 59

usage

Question 60

The four causes of depreciation are wear and tear, obsolescence, usage and --- ---.

Answer 60

legal limits

Question 61

A depreciation method is suitable if the amount of depreciation calculated using that method matches the --- --- of the non-current asset.

Answer 61

usage pattern

Question 62

Accumulated depreciation is an --- of the reduction in economic value of a non-current asset.

Answer 62

approximation

Question 63

Accumulated depreciation is an approximation of the --- --- --- --- of a non-current asset.

Answer 63

reduction in economic value

Question 64

Accumulated depreciation is an approximation of the reduction in economic value of a --- ---.

Answer 64

non-current asset

Question 65

Net book value represents the --- future economic value of a non-current asset

Answer 65

estimated

Question 66

Net book value represents the estimated --- --- --- of a non-current asset

Answer 66

future economic value

Question 67

Net book value represents the estimated future economic value of a --- ---.

Answer 67

non-current asset

Question 68

The prudence theory states that the --- --- --- should be the one that least overstates assets and profits and least understates liabilities and losses.

Answer 68

accounting treatment chosen

Question 69

The prudence theory states that the accounting treatment chosen should be the one that --- --- assets and profits and least understates liabilities and losses.

Answer 69

least overstates

Question 70

The prudence theory states that the accounting treatment chosen should be the one that least overstates --- --- --- and least understates liabilities and losses.

Answer 70

assets and profits

Question 71

The prudence theory states that the accounting treatment chosen should be the one that least overstates assets and profits and --- --- liabilities and losses.

Answer 71

least understates

Question 72

The prudence theory states that the accounting treatment chosen should be the one that least overstates assets and profits and least understates --- --- ---.

Answer 72

liabilities and losses

Question 73

The consistency theory states that once a business has chosen an --- ---, this method should be applied to all future financial periods to enable meaningful comparison of accounting information over time.

Answer 73

accounting method

Question 74

The consistency theory states that once a business has chosen an accounting method, this method should be applied to all future financial periods to enable meaningful comparison of accounting information --- ---.

Answer 74

over time

Question 75

The consistency theory states that once a business has chosen an accounting method, this method should be applied to all --- financial periods to enable meaningful comparison of accounting information over time.

Answer 75

future

Question 76

The consistency theory states that once a business has chosen an accounting method, this method should be applied to all future financial periods to enable --- --- of accounting information over time.

Answer 76

meaningful comparison

Question 77

The --- theory states that once a business has chosen an accounting method, this method should be applied to all future financial periods to enable meaningful comparison of accounting information over time.

Answer 77

consistency