ACF 100: Book keeping Questions With Complete Solutions

Accountability correct answer: Management's responsibility to provide an account/report on the way in which the resource entrusted to them have been used. Appropriation Account correct answer: The profit or loss for the period is typically apportioned between the partners using an appropriation account. Typically included at the base of the statement of profit and loss Available-for-sale Assets correct answer: Investments denominated in money or in paper i.e shares and bonds that the entity holds for financial gain and which will be sold by the entity in the future SOFP/Balance Sheet correct answer: Statement that identifies the net worth of the entity. Provides information on what the entity owns (assets) and what the entity owes (liabilities) Comparatives correct answer: Prior year figures Cost of Services correct answer: Includes expenses directly related to the goods/services sold by the business Current Assets correct answer: (i) cash and cash equivalents expected to turn into cash in 12 months (ii) other assets expected to turn into cash in 12 months (iii) all assets intended for sale/consumption as part of the entity's normal trading activities of the business Current Liabilities correct answer: obligations that the entity has to meet in the future. Liabilities that are due to be settled within 12 months that are incurred as part of the firm#s normal trading activities are called current liabilities. Economic Decision-Making correct answer: Facilitates efficient and effective allocation of resources Expenses correct answer: Decreases in economic benefits during the accounting period in the form of outflows of depletion. (Yearly running costs)