Questions from Financial Accounting

Q: Explain the relevance of inventory in the determination of gross profit.

Explain the relevance of inventory in the determination of gross profit.

Q: Explain each of the entries in the following inventory account:

Explain each of the entries in the following inventory account:

Q: Explain the nature of non-current assets.

Explain the nature of non-current assets.

Q: ‘Although the straight-line method of depreciation is the simplest

‘Although the straight-line method of depreciation is the simplest to apply, it may not always be the most appropriate.’ Explain and discuss.

Q: In the year to 31 December 20X9, Amy bought a new

In the year to 31 December 20X9, Amy bought a new non-current asset and made the following payments in relation to it: Required a. State and justify the cost figure that should be used as the basis...

Q: a. Explain the difference between capital expenditure and revenue expenditure.

a. Explain the difference between capital expenditure and revenue expenditure. b. What criteria would you use to decide whether expenditure should be classified as relating to a non-current asset?

Q: Briefly explain the circumstances in which each of the following would be

Briefly explain the circumstances in which each of the following would be regarded as a non- current asset: (a) Tools; (b) Investments; and (c) Advertising expenditure.

Q: a. Explain the difference between tangible and intangible non-current

a. Explain the difference between tangible and intangible non-current assets. b. What is goodwill and how does it usually arise in a statement of financial position?

Q: a. Describe how non-current assets are valued under historical

a. Describe how non-current assets are valued under historical cost accounting. b. How would your account for expenditure on double-glazing? Explain your reasons.

Q: Explain fully the nature of depreciation.

Explain fully the nature of depreciation.