AAT L4 Financial Statements (Companies)

Question 1

Under FRS 102, which of the following is included in the primary financial statements of a limited company?

Accepted Answer

A statement of cash flows, statement of financial position, income statement, and statement of changes in equity

Answer

A complete set of financial statements under FRS 102 comprises a statement of financial position, statement of comprehensive income (or income statement + OCI), statement of changes in equity, statement of cash flows, and notes.

Question 2

Under Companies Act 2006, the filing deadline for private company accounts at Companies House is:

Accepted Answer

9 months after the accounting reference date

Answer

Private limited companies must file accounts at Companies House within 9 months of their accounting reference date. Public companies have 6 months.

Question 3

Goodwill arising on the acquisition of a subsidiary must be:

Accepted Answer

Capitalised and amortised over its useful economic life under FRS 102

Answer

Under FRS 102, goodwill on consolidation is capitalised as an intangible asset and amortised over its useful economic life. If useful life cannot be estimated reliably, it is amortised over a maximum of 10 years.

Question 4

The statement of changes in equity reconciles:

Accepted Answer

Opening and closing equity balances by showing all movements including profit, dividends, and share issues

Answer

The statement of changes in equity shows how shareholders' equity changed during the period: opening balance + profit for the year + other comprehensive income − dividends + share issues ± other movements = closing balance.

Question 5

Under FRS 102, internally generated goodwill:

Accepted Answer

Cannot be recognised as an intangible asset

Answer

FRS 102 (consistent with IFRS) prohibits recognition of internally generated goodwill — only goodwill arising on business combinations can be recognised.

AAT Level 4 Practice Test

AAT Level 4 Practice Test

AAT L4 Financial Statements (Companies)