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Free BA3 Exam Braindumps
Fundamentals of Financial Accounting Questions 161–165 (page: 34)

Updated On: 9-Feb-2026
Page 34 of 80
PDF with 393 Questions

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

  1. Standing order with flour supplier
  2. Mortgage on bakery shop
  3. Regular bread order fulfilled for local school
  4. Shop building itself
  5. Business loan
  6. 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?

  1. $87,500
  2. $72,500
  3. $60,000
  4. $78,500

Answer(s): B



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

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

Answer(s): C,E



External auditors are primarily responsible for:

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

Answer(s): D



Life membership fees payable to a club or society are usually dealt with by:

  1. Crediting the total received to the income and expenditure account in the year in which they are received
  2. Debiting the total received to the income and expenditure account in the year in which they are received
  3. Debiting the total received to a Life Memberships account and transferring a proportion each year to the income and expenditure account
  4. Crediting the total received to a Life Memberships account and transferring a proportion each year to the income and expenditure account

Answer(s): D



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