Cima C02 Exam Question No 4

Question No 4:

A company includes in inventory goods received before the year end, but for which invoices are not received until after the year end. This is in accordance with

A. The historical cost convention.
B. The accruals concept.
C. The consistency concept.
D. The materiality concept.

Answer: B

Cima C02 Exam Question No 3

Question No 3:

Which one of the following should be accounted for as capital expenditure?

A. Cost of painting a building.
B. The replacement of windows in a building.
C. The purchase of a car by a garage for re-sale.
D. Legal fees incurred on the purchase of a building.

Answer: D

Cima C02 Exam Question No 2

Question No 2:

Which one of the following sentences does NOT explain the distinction between financial accounts and management accounts?

A. Financial accounts are primarily for external users and management accounts are primarily for internal users.
B. Financial accounts are normally produced annually and management accounts are normally produced monthly.
C. Financial accounts are more accurate than management accounts.
D. Financial accounts are audited by management where as management accounts are audited by external auditors.

Answer: D

Cima C02 Exam Question No 1

Question No 1:

The difference between an income statement and an income and expenditure account is that:

A. An income and expenditure account is an international term for an Income statement.
B. An income statement is prepared for a business and an income and expenditure account is prepared for a not-for-profit making organization.
C. An income statement is prepared on an accruals basis and an income and expenditure account is prepared on a cash flow basis.
D. An income statement is prepared for a manufacturing business and an income and expenditure account is prepared for a non-manufacturing business.

Answer: B