QUESTION: 161

FY owns bakery T. Which of the following are examples of FY's liabilities?

Standing order with flour supplier
Mortgage on bakery shop
Regular bread order fulfilled for local school
Shop building itself
Business loan
Ovens

Answer(s): A,B,E

M Ltd owns property costing $80,000 ($50,000 for the land and $30,000 for the building).

The company's accounting policy is to depreciate buildings at the rate of 5% per annum on the straight-line basis.

After five years, what is the net book value of freehold land and building in the financial accounts of M Ltd?

$87,500
$72,500
$60,000
$78,500

Answer(s): B

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QUESTION: 163

Which of the following statements concerning the statements of cashflows are INCORRECT?

They only deal with payment and receipt of money
They are primary financial statements
Companies with a negative cash flow shown in cash flow statements cannot be profitable
Statements of cash flow allow users to identify cash flow issues
They are the same as statements of comprehensive income

Answer(s): C,E

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QUESTION: 164

External auditors are primarily responsible for:

Checking the accuracy of all entries in the accounting system
Preparing the financial accounts
Detecting errors and fraud
Determining that the accounts show a fair representation of the affairs of the company

Answer(s): D

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