[FIA/FA2: Tài liệu ôn thi] Session 1 (Phần 1)

Session 1 (Phần 1) sẽ ôn lại 4 dạng bài tập quan trọng môn Maintaining Financial Records (FA2) với chủ đề "The key accounting principles and characteristics" và "The principles and process of basic bookkeeping".

I. Tổng quan

Topic	Question types	Question index
		MCQ
The key accounting principles and characteristics	1. Qualitative accounting characteristics	1,2
	2. Principles of accounting	3.4
The principles and process of basic bookkeeping	1. The business equation	5,6,7
	2. The accounting equation	8,9

II. Dạng bài tập chi tiết

1. Topic 1: The key accounting principles and characteristics

1.1. Type 1: Qualitative accounting characteristics

Ref: Tóm tắt kiến thức Type 1: Qualitative accounting characteristics

Importance: Average

Question 1: Information may become less useful if there is a delay in reporting it. Which qualitative characteristic of financial information is described by this statement? A.      Comparability B.      Understandability C.      Verifiability D.     Timeliness

Guidance:

Identify the main idea of the statement → reminds of the different terms of qualitative characteristics by referring to the above diagram → then determine the correct answer.

 Answer: D

• Option D is correct. Timeliness refers to information that should be provided quickly enough to be of use in decision-making.

→ This matches with the question, as it states information becomes less useful if it is not provided quickly enough.

• Option A is incorrect. Comparability refers to the financial information that should be capable of being compared over time and with similar information about other entities.
• Option B is incorrect. Understandability refers to information that should be presented in a way that makes it understandable to users.
• Option C is incorrect. Verifiability refers to the accounting information that should be capable of being reproduced by the third party, given the same facts and assumptions.

Question 2: A number of users would broadly agree that faithful representation has been achieved. Which qualitative characteristic of financial information is described by this statement? A.      Comparability B.      Understandability C.      Verifiability D.     Relevance

Guidance:

Identify the main idea of the statement → reminds of the different terms of qualitative characteristics by referring to the above diagram → then determine the correct answer.

Answer: C

• Option C is correct. Verifiability refers to the accounting information that should be capable of being reproduced by the third party, given the same facts and assumptions.

→ This matches with the question, as it states a number of users (considered as the third party) agree to the information.

• Option A is incorrect. Comparability refers to the financial information that should be capable of being compared over time and with similar information about other entities.
• Option B is incorrect. Understandability refers to information that should be presented in a way that makes it understandable to users.
• Option D is incorrect. Relevance refers to financial information which influenced the decisions of users.

1.2. Type 2: Principles of accounting

Ref: Tóm tắt kiến thức Type 2: Principles of accounting

Importance: Average

Question 3: When the owner of a business takes goods from inventory for his own personal use, which of the following accounting principles should be considered? A.      Consistency B.      Going concern C.      Prudence D.     Business entity

 Guidance:

Identify the main idea of the statement → reminds of the different terms of qualitative characteristics by referring to the above diagram → then determine the correct answer.

 Answer: D

• Option D is correct. Business entity refers to accounting records that should record the transactions of the business entity, not the transactions of its

→ This matches with the question, as it states the transaction of the owner of the business (for personal use).

• Option A is incorrect. Consistency refers to Financial statements using the same accounting method, policies, and standards over time.
• Option B is incorrect. Going concern refers to the assumption that the business will continue operating in the foreseeable future.
• Option C is incorrect. Prudence refers to assets, liabilities, income, and expenses that must neither be overstated nor understated.

Question 4: A business owns a non-current asset that costs $4,000 and is recorded at its net book value in the financial statements. Which of the following accounting principles has been applied? A.      Going concern B.      Business entity C.      Consistency D.     Prudence

 Guidance:

Identify the main idea of the statement → reminds of the different terms of qualitative characteristics by referring to the above diagram → then determine the correct answer.

 Answer: A

• Option A is correct. Going concern refers to the assumption that the business will continue operating in the foreseeable future. The main significance of the going concern principle is that the assets of the business should not be valued at their 'break-up' value, which is the amount that they would sell for if they were sold off piecemeal and the business was thus broken up.

→ This matches with the question, as it states the non-current asset is recorded at its net book value, not at its break-up value.

• Option B is incorrect. Business entity refers to accounting records that should record the transactions of the business entity, not the transactions of its
• Option C is incorrect. Consistency refers to Financial statements using the same accounting method, policies, and standards over time.
• Option D is incorrect. Prudence refers to assets, liabilities, income, and expenses that must neither be overstated nor understated.

2. Topic 2: The principles and process of basic bookkeeping

2.1. Type 1: The business equation

Ref: Tóm tắt kiến thức Type 1: The business equation

Importance: High

Question 5: A trader's net profit for the year may be computed by using which of the following formulae? A.      Opening capital + Drawings – Capital introduced – Closing capital B.      Closing capital + Drawings – Capital introduced – Opening capital C.      Opening capital – Drawings + Capital introduced – Closing capital D.     Closing capital – Drawings + Capital introduced – Opening capital

 Guidance:

Remind of the business equation:

Opening net assets + Capital introduced + Profit (- Loss) – Drawings = Closing net assets Note: Net assets = Assets - Liabilities

If the business can establish the trader’s net assets at the beginning and end of the period, its profit/loss can be computed as follow:

Profit/Loss of the year = Closing net assets – Opening net assets – Capital introduced + Drawings

Answer: B

Re-arrange the elements in the equation of option B will result in the correct business equation.

Question 6: At the start of the year, the balance on David's net assets was $85,872. During the year David made drawings of $19,500 and the net loss for the year was $1,700. He introduced a capital of $5,300. What are David's net assets at the year-end? A.      $73,372 B.      $69,972 C.      $98,372 D.     $62,772

 Guidance:

Remind of the business equation:

Opening net assets + Capital introduced + Profit (- Loss) – Drawings = Closing net assets Note: Net assets = Assets - Liabilities

 Answer: B

Closing net assets = Opening net assets + Capital introduced + Profit (- Loss) – Drawings

Closing net assets = $85,872 + $5,300 - $1,700 - $19,500

Closing net assets = $69,972

Question 7: The profit made by a business in 20X7 was $35,400. The proprietor injected new capital of $10,200 during the year and withdrew a monthly salary of $500. If net assets at the end of 20X7 were $95,100, what was the proprietor's capital at the beginning of the year? A.      $43,500 B.      $55,500 C.      $63,900 D.     $126,300

 Guidance:

Remind of the business equation:

Opening net assets + Capital introduced + Profit (- Loss) – Drawings = Closing net assets Note: Net assets = Assets - Liabilities

Then re-arrange the elements in the business equation to find the opening net assets.

Note that the monthly withdrawal of $500 should be carefully computed for the whole 12 months in a year.

 Answer: B

Re-arrange the elements in the business equation to find the opening net assets:

Opening net assets = Closing net assets + Drawings – Profit (+ Loss) – Capital introduced

Opening net assets = $95,100 + $500 x 12 - $35,400 - $10,200

Opening net assets = $55,500

2.2. Type 2: The accounting equation

Ref: Tóm tắt kiến thức Type 2: The accounting equation

Importance: Average

Question 8: A business borrowed $1,700 from its bank and used the cash to buy a new computer. How was the accounting equation affected by these transactions?   Assets Liabilities A.        Unchanged Decreased B.        Unchanged Increased C.        Increased Increased D.       Increased Decreased

 Guidance:

Remind of the accounting equation:

Assets = Equity/Capital + Liabilities

The accounting equation should always be equal.

Note that in the question there may be more than 1 transaction, if so, students should do the steps of each transaction separately.

Answer: C

Analyze the answer separately with each transaction:

	$1,700 borrowed from the bank
Step 1	The transaction increases by $1,700 in cash.	The transaction increases $1,700 in bank loans.
Step 2	→ Record $1,700 debit in Cash account (Assets)	→ Record $1,700 credit in Bank Loan account (Liabilities)
Step 3	→ Increase Assets $1,700	→ Increase Liabilities $1,700

 

	$1,700 used to buy a new computer
Step 1	The transaction increases $1,700 of the computer.	The transaction decreases $1,700 in cash.
Step 2	→ Record $1,700 debit in Computer account (Assets)	→ Record $1,700 credit in Cash account (Assets)
Step 3	→ Increase Assets $1,700	→ Decrease Assets $1,700

The total impacts of the transactions are: Assets increases and Liabilities increases.

Question 9: The owner of a small business, which does not have an overdraft facility, draws out some money for personal use. Which of the following correctly states the effect of the drawings upon the accounting equation? A.      Assets increase, capital increases B.      Assets decrease, capital increases C.      Assets decrease, capital decreases D.     Assets decrease, liabilities decrease

 Guidance:

Remind of the accounting equation:

Assets = Equity/Capital + Liabilities

The accounting equation should always be equal.

Step 1	Determine the economic substance of the transactions
Step 2	Classify and record the transactions in the accounts of the financial statements → Make sure the accounting equation is equal
Step 3	Identify the impacts (increase, decrease, or unchanged) of the transactions to the accounting equation

 Answer: C

Analyze the transaction:

	Cash has drawn for personal use
Step 1	The transaction decreases capital	The transaction decreases the cash balance
Step 2	→ Record debit in the capital account (Equity/Capital)	→ Record credit in a cash account (Assets)
Step 3	→ Decrease Equity/Capital	→ Decrease Assets