Regulatory Framework

Question 1

What does the FRS 105 relate to?

Answer 1

Accounting rules for micro entities

Question 2

What does FRS 100 relate to?

Answer 2

Overall reporting framework

Question 3

What does FRS 102 relate to?

Answer 3

Accounting rules for most companies

Question 4

What must a set of accounts present in terms of the state of a company’s affairs?

Answer 4

A true and fair view

Question 5

What does GAAP stand for?

Answer 5

Generally accepted accounting principles

Question 6

Which principle does ‘financial statements free from material error and bias’ refer to?

Answer 6

Reliability

Question 7

What does ‘any error or omission that could influence the economic decisions of users’?

Answer 7

Materiality

Question 8

Which source is ‘debtors’ from?

Answer 8

Companies House 2006

Question 9

Which source are reporting period, statement of financial position and non-controlling interest from?

Answer 9

FRS 102

Question 10

What is a contingent asset?

Answer 10

Where the inflow is probably but not virtually certain

Question 11

What happens when inflow is only possible or remote for an asset?

Answer 11

It is not recognised and no disclosure is required

Question 12

What 3 conditions must be satisfied in terms of recognition under FRS 102?

Answer 12

Meet the definition of an asset, liability, income or expense

Must be probable that future economic benefit will flow to or from the entity

The item must have a cost or value that can be reliably measured

Question 13

Per FRS 102, going concern must take account of all available information about the future, which is at least 12 months from when?

Answer 13

The date the accounts are authorised

Question 14

What is equity?

Answer 14

The residual interest in the asset after deducting the liabilities

Question 15

What is the basic purpose of accounting standards?

Answer 15

To outline the accounting practice which the company is expected to follow for a particular transaction or event

Question 16

What are the requirements for a company to qualify as a micro entity per FRS 105?

Answer 16

Total assets <£316,000
Average employees <10
Turnover <£632,000

Question 17

Which out of CA 2006 and FRS 102 prescribed the diminution in the value of assets as a term?

Answer 17

Companies Act 2006

Question 18

How should a contingent liability be treated?

Answer 18

A contingent liability that is possible rather than probable should not be recognised in the accounts

Question 19

How should a not recognised contingent liability be treated?

Answer 19

It should not be included in the disclosure note

Question 20

Which regulation is the term reporting period from?

Answer 20

FRS 102

Question 21

Which regulation is the term non-controlling interest from?

Answer 21

FRS 102

Question 22

What is the principle of timeliness?

Answer 22

Information should be provided whilst it can still be used to aid decision makers

Question 23

What is the principle of prudence?

Answer 23

A degree of caution should be used

Question 24

What is the principle of reliability?

Answer 24

Information should be presented in a manner that is neutral

Question 25

What can be produced under section 1A of FRS 102?

Answer 25

Abridged accounts