FREE ACCA Applied Knowledge Questions and Answers

Question 1

In a business organization, what is the primary role of management?

Accepted Answer

Formulating business strategies

Answer

Setting accounting policies

Answer

Ensuring compliance with tax laws

Answer

Recording financial transactions

Question 2

Which financial statement shows a company’s financial position at a specific point in time?

Accepted Answer

Balance Sheet

Answer

Income Statement

Answer

Statement of Cash Flows

Answer

Statement of Changes in Equity

Question 3

Which costing method allocates overheads based on activities?

Accepted Answer

Activity-based costing

Answer

Absorption costing

Answer

Marginal costing

Answer

Process costing

Question 4

What is the purpose of budgeting in management accounting?

Accepted Answer

To forecast future financial performance

Answer

To prepare financial statements

Answer

To manage daily transactions

Answer

To record historical costs

Question 5

Which of the following is an example of a current liability?

Accepted Answer

Trade payables

Answer

Long-term loan

Answer

Mortgage

Answer

Equipment lease