Definitions

Question 1

Retained Profit

Answer 1

The accumulation of profits and losses over the years, less any dividends. (Undistributed profits)

Question 2

An asset

Answer 2

A resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise

1) control
2) past events
3) economic benefits

Question 3

A liability

Answer 3

A present obligation of the enterprise arising from past events, the settlement of which is expected to follow in an out flow from the enterprise of resources embodying economic benefits

1) present obligation
2) past event
3) economic benefits

Question 4

Equity

Answer 4

The residual value in the assets of an entity after deducting all its liabilities

Question 5

Income

Answer 5

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from owners.

Question 6

Expenses

Answer 6

Decreases in economic benefits during the accounting period in the forms of outflows or depletion’s of assets or increases of liabilities that result in decreases of equity, other than those a relating to distribution to owners.

Question 7

Cash

Answer 7

Cash in hand and demanded deposits

Question 8

Cash equivalents

Answer 8

Short term, highly liquid investments which are readily convertible into known amounts of cash

Question 9

Fair value

Answer 9

The amount for which an asset could be exchanged between knowledgeable willing parties in an arms length transaction.

Question 10

Depreciation

Answer 10

Systematic allocation of the depreciable amount of an asset over its useful life

Question 11

Intangible assets

Answer 11

A resource controlled by an entity as a result of past events from which future economic benefits are expected to flow for more than one accounting period.

Question 12

Amortisation

Answer 12

‘Depreciation’ for an asset with a finate lift.

Question 13

Carrying amount

Answer 13

Amount at which an asset is recognised after the deduction of depreciation or amortisation

Question 14

Impairment loss

Answer 14

When The carrying amount exceeds its recoverable amount

Question 15

Fair value

Answer 15

Price that would be received to sell an asset or paid to transfer a liability in a transaction in the martlet at a measurable date

Question 16

Recoverable amount

Answer 16

Value of an asset calculated as the higher of the value in use and its fair value less costs to sell.

Question 17

Value in use

Answer 17

Present value of future cash flows through the use of the asset

Question 18

Lease

Answer 18

A contract that conveys the right to use an asset for a period of time in exchange for consideration

Question 19

Right of use asset

Answer 19

An asset that represents a lessees right to use an underlying asset for a period of time

Question 20

Short term lease

Answer 20

A lease with a term of 12 month or less

Question 21

Lessee

Answer 21

The entity that obtains the right to use an asset

Question 22

Lessor

Answer 22

The entity that provides the asset in the exchange for receiving consideration

Question 23

Contingent liability

Answer 23

Obligation is only possible or cannot be measured reliably.

Question 24

Contingent asset

Answer 24

An asset arising from past events who’s existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within control of the entity.

Question 25

Revenue

Answer 25

Income arising in the course of an entity’s ordinary activities

Question 26

Parent company

Answer 26

The acquirer, an entity that controls another

Question 27

Subsidiary company

Answer 27

Acquiree, and entity that’s is controlled by another

Question 28

Acquisition date

Answer 28

Date at which control is gained by

Question 29

Acquisition method

Answer 29

Measures the cost of assets and liabilities being acquired and usually results in the recognition of goodwill

Question 30

Business combinations

Answer 30

Formation of a group though acquisition

Question 31

Fair value

Answer 31

The price that would be received/paid to sell or transfer an asset or liability in an ordinary transaction

Question 32

Goodwill

Answer 32

The excess of the cost of the acquisition over fair value of assets and liabilities

Question 33

Property, plant and equipment

Answer 33

Any tangible asset that is held for use, and is expected to be used for more than one accounting period.

Question 34

Inventory

Answer 34

Assets held for sale or use in the ordinary course of business

Question 35

Provision

Answer 35

A liability of uncertain timing or amount.