A business purchased a motor car on 1 July 20X3 for $20,000. It is to be depreciated at 20 per cent per year on the straight
line basis, assuming a residual value at the end of five years of $4,000, with a proportionate depreciation charge in the years
of purchase and disposal.The $20,000 cost was correctly entered in the cash book but posted to the debit of the motor
vehicles repairs account.
How will the business profit for the year ended 31 December 20X3 be affected by the error?
Repairs cost overstated Depreciation understated ((20,000 - 4,000) x 20% x Profit understated
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Which accounting concept should be considered if the owner of a business takes goods from inventory for his own personal
use?
Which accounting concept should be considered if the owner of a business takes goods from inventory for his own personal
use?
According to the IASB's Conceptual Framework for Financial Reporting, which TWO of the following are part of faithful
representation?1 It is neutral2 It is relevant3 It is presented fairly4 It is free from material error
Which of the following accounting concepts means that similar items should receive a similar accounting treatment?
Listed below are some characteristics of financial information.1 Relevance2 Consistency3 Faithful representation4 Accuracy
Which of these are qualitative characteristics of financial information according to the IASB's Conceptual Framework for
Financial Reporting?
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