ACCA practice questions for (Asset and liability) FA1 practice question

ACCA practice questions for (Asset and liability) FA1 practice question

ACCA practice questions will help you to understand your knowledge on chapter Asset and liability. Practice for these questions and know in which area you need to do more practice.

Q1. Resources that a business or economic body owns or controls is___?

Choose correct option

1. Liability
2. Capital
3. Asset
4. Revenue

Q2. Asset that can be changed into cash easily, Which asset?

1. Non current asset
2. Current asset
3. Fixed asset
4. Mixed asset

Q3. Current asset has usually a life between __?

1. 1 to 2 years
2. 3 years
3. 5 years
4. 6 months to 1 year

Q4. Which two of the following are examples of Current asset (CA)?

1. Inventory
2. furniture
3. payable
4. Cash

Q5. NCL or non current asset has usually life between ___?

1. 6 months
2. 8 months
3. less then 1 year
4. more then 1 year

Q6. A liability is an __?

1. Obligation
2. Asset
3. Account
4. Entity

Q7. Liability is based on ____ event?

1. Future
2. Past
3. Present
4. poor

Q8. Obligations which is liable to pay within 1 year is a ___?

1. Current liability
2. Non current liability
3. Unlimited liability

Q9. Which of the following is a current liability?

1. Revenue
2. payable
3. loan
4. tax payable within 5 years

Q10. Obligation which take 1 to 5 years to pay or more is known as?

1. Current liability
2. Non current liability
3. Poor liability
4. Temporary liability

Q11. Asset is equal to?

1. Capital + Liability
2. NCL + liability
3. Liability + Current asset
4. Current asset + Capital

Q12. contain two parts (A) $ (B).

(A) Y puts $50000 cash and a new car worth $40000 in his new business, calculate his capital?

1. 50000
2. 100000
3. 40000
4. 90000

(B) choose the double entry for Q11.

1. Cash debit $90000, capital credit with $90000
2. Cash debit $50000, car debit $40000, capital credit with $90000.
3. Car debit $40000, capital credit $40000

Q13. Honey has a capital of 3000 during year he invest 2000 in business and make a profit on sale for 1000 and he is liable to pay a supplier of 2000. At the year end he withdrew 500.

Calculate asset

1. 8000
2. 7500
3. 8500
4. 2000

Q14. The amount which is taken by the owner from his business for his personal use.

Choose the correct option.

1. Liability
2. Capital
3. Drawings
4. Withdrew

Q15. Payable means?

1. Present obligation
2. NCL
3. Asset
4. Revenue

Q16. Receivable means?

1. Asset
2. Capital
3. Liability
4. Expense

Q17. The is spending that leads to the purchase of fixed assets or an increase in their earnings potential.

This is the definition of?

1. Revenue expenditure
2. Capital expenditure
3. Expense
4. Current asset

Q18. To sustain non-current assets’ present earning capability. This represent

1. Capital expenditure
2. Revenue expenditure
3. Expense
4. Capital

Q19. Repair and maintenance are the examples of ?

1. Capital expenditure
2. Revenue expenditure
3. Service
4. Overheads

Q20. Machinery and automobiles are examples of ?

1. Capital expenditure
2. Revenue expenditure
3. Service
4. Overheads

Q21. If revenue expenditure is classified as capital expenditure, it will cause

1. Overstate profit
2. Understate profit
3. No effect
4. Increase liability

Answers

1. Asset
2. Current asset
3. 6 months to 1 year
4. inventory and cash
5. more then 1 year
6. Obligation
7. Past
8. Current liability
9. payable
10. Non current liability
11. Capital + Liability
12. (a) 90000 (b) Cash debit $50000, car debit $40000, capital credit with $90000
13. 7500
14. Drawings
15. Present obligation
16. Asset
17. Capital expenditure
18. Revenue expenditure
19. Revenue expenditure
20. Capital expenditure
21. Overstate profit

Q12 part B

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Read before doing these ACCA practice questions

Asset and liability (Accounting Equations)

Business transaction and documentation-FA1(ACCA)

ACCA-FA1 practice questions-chapter 1