ACCA AK Financial Accounting 1

Question 1

The double-entry bookkeeping principle states that:

Accepted Answer

Every debit entry must have a corresponding equal credit entry

Answer

Double-entry bookkeeping requires every transaction to be recorded as both a debit and a credit of equal amount, maintaining the accounting equation: Assets = Liabilities + Equity.

Question 2

Which of the following accounts would normally have a credit balance?

Accepted Answer

Bank overdraft

Answer

A bank overdraft is a liability — the business owes money to the bank. Liabilities carry credit balances; assets normally carry debit balances.

Question 3

A trial balance is used to:

Accepted Answer

Check that total debits equal total credits in the ledger

Answer

A trial balance lists all ledger account balances and confirms that the total of debit balances equals the total of credit balances, verifying mathematical accuracy.

Question 4

Which accounting concept states that similar items should be treated consistently from one period to the next?

Accepted Answer

Consistency concept

Answer

The consistency concept requires that accounting methods and policies are applied consistently from period to period, enabling meaningful comparison of financial statements.

Question 5

Depreciation is an application of which accounting concept?

Accepted Answer

Matching (accruals) concept

Answer

Depreciation applies the matching (accruals) concept by allocating the cost of a non-current asset over the periods that benefit from its use, matching cost to related revenue.

ACCA Applied Knowledge Practice Test

ACCA Applied Knowledge Practice Test

ACCA AK Financial Accounting 1