ALL 50 questions are compulsory and MUST be attempted Please use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to each multiple choice question. Each question is worth 2 marks.

1 Which of the following is an example of capital expenditure? 

A Paying for refurbishment as part of upgrading a building 
B Paying carriage outwards in respect of selling goods 
C Paying legal fees in order to recover customer debts 
D Paying bonuses to production operatives

What is inventory

Inventory

Inventories are assets:

(a) held for sale in the ordinary course of business;

(b) in the process of production for such sale; or

(c) in the form of materials or supplies to be consumed in the production process or in the rendering of services. (IAS2)

What is expense

*Expenses

*Expenses refer to costs incurred in conducting business.

*Technically, expenses are "decreases in economic benefits during the accounting period in the form of decreases in assets or increases in liabilities that result in decreases in equity, other than those relating to distributions to equity participants".

Journal / Double entry

Double Entry is recorded in a manner that the Accounting Equation is always in balance. 

Assets - Liabilities = Capital

1. Purchase of machine by cash

Debit	Machine (Increase in Asset)  balance sheet
Credit	Cash (Decrease in Asset) balance sheet

2. Payment of utility bills

Debit	Utility Expense (Increase in Expense) balance sheet
Credit	Cash (Decrease in Asset) balance sheet

What is Liabilities

*Liabilities

1.According to IASB Framework liability is defined as follows:

A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits (IASB Framework)

What is a non-current asset?

What are Assets?

A thing, person or a quality which is useful or beneficial is termed as an asset, giving this definition a financial turn assets are things tangible or non-tangible that hold economic value and are held by businesses to extract future benefits. The value of asset is adjudged by the amount it can fetch in monetary terms & that is further used in the assets column of a company’s balance sheet.

What is sundry Expense

The word “Sundry” is used for items which are not important enough to be mentioned individually. Sundry expenses are costs incurred for small things which can not be categorized under a specific heading. They are usually infrequent, considerably low, miscellaneous in nature & are not classified under a specific ledger account.

Debit & credit entry

Business transactions are events that have a monetary impact on the financial statements of an organization. When accounting for these transactions, we record numbers in two accounts, where the debit column is on the left and the credit column is on the right.

What Is Debit & Credit Note

Debit Note and Credit Note are used while the return of goods is made between two businesses.Debit Note is issued by the purchaser, at the time of returning the goods to the vendor, and the vendor issues a Credit Note to inform that the returned goods have been received by him. 

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