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Question 1:

In a joint venture, the accounting for transactions is based on:

The discretion of the managing co-venturer Standard accounting principles only The laws of the country where the venture is located The agreement between the co-venturers

Question 2:

In the written down value method, the depreciation rate is applied to the:

Original cost of the asset Book value at the beginning of the year Salvage value of the asset Market value of the asset

Question 3:

After assessing its accounts, a company decides to increase its provision for doubtful debts from 5% to 6% of its debtors, which are ?400,000. What is the revised provision amount?

22000 20000 26000 24000

Question 4:

A reserve is considered to be:

A mandatory deduction required by law A charge against profits for a known liability An amount set aside to cover future expenses An appropriation of profits for a specific purpose

Question 5:

The depletion method allocates the cost of a natural resource based on:

The market value of the resource The original cost of the resource The time it is used The number of units extracted

Question 6:

The main purpose of creating a provision for discount on creditors is to:

Reduce the taxable income of the business Increase the value of creditors Reflect the expected reduction in the amount payable Cover the cost of future expenses

Question 7:

The creation of a provision for bad and doubtful debts results in:

An increase in the total assets A decrease in the net profit No impact on the net profit An increase in the net profit

Question 8:

In a joint venture, the co-venturer's share of profit or loss is:

Determined by the managing co-venturer Based on the predetermined ratio agreed upon The same for all co-venturers regardless of their contribution Equal to their share of investment

Question 9:

Which method of depreciation charges the same amount each year?

Depletion method Straight-line method Written down value method Annuity method

Question 10:

Two co-venturers, E and F, agree to share profits and losses in the ratio of 3:2. If the joint venture incurs a loss of ?50,000, what is F's share of the loss?

25000 30000 15000 20000

Quiz: Financial Accounting