Financial Accounting Flashcards
6 cards from real ACCA AK practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Financial Accounting flashcards as text
The double-entry bookkeeping principle states that:
Answer: Every debit entry must have a corresponding equal credit entry
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.
Which of the following accounts would normally have a credit balance?
Answer: Bank overdraft
A bank overdraft is a liability — the business owes money to the bank. Liabilities carry credit balances; assets normally carry debit balances.
A trial balance is used to:
Answer: Check that total debits equal total credits in the ledger
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.
Which accounting concept states that similar items should be treated consistently from one period to the next?
Answer: Consistency concept
The consistency concept requires that accounting methods and policies are applied consistently from period to period, enabling meaningful comparison of financial statements.
Depreciation is an application of which accounting concept?
Answer: Matching (accruals) concept
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.
Which of the following is a capital expenditure?
Answer: Purchasing a new delivery vehicle
Capital expenditure creates or enhances a non-current asset (the delivery vehicle) which provides economic benefit over more than one period. The others are revenue expenditure.