mock test

Question 1

what is shown on an income statement

Answer 1

results of transactions during the accounting period

Question 2

what is shown on a balance sheet

Answer 2

financial position at a particular point in time

Question 3

from which financial document can a solvency margin be calculated

Answer 3

balance sheet

Question 4

what does depreciation represent

Answer 4

cost of an asset apportioned over the financial period during which the company will benefit from the use of that asset

Question 5

what does the double entry accounting principle for recording insurance transactions reflect

Answer 5

earned an amount of income which is balanced by an increase in cash

Question 6

what does capital adequacy represent

Answer 6

quality and level of capital required to run the business

Question 7

what scope of risks is likely to be affected by financial issues and the selling of an office

Answer 7

group

Question 8

in which financial statement within the report will receipts of new loans be shown

Answer 8

cash flow from financing activity

Question 9

what information is used to calculate return on equity

Answer 9

profit after tax and capital

Question 10

what does liquidity ratio show

Answer 10

relationship of liabilities to cash and investments

Question 11

how do financial accounts differ from management accounts

Answer 11

financial accounts record the financial impact of events whereas management accounts provide forecasts