L3 Principles, sole traders & partnerships

Question 1

"the difference between the value of the business as a whole and the net assets & liabilities"

Accepted Answer

describes good will

Question 2

Financial information must correspond to the effect of transactions or events, free from error:

Accepted Answer

describes faithful representation

Question 3

which items are recorded in the statement of financial position "Least liquid first"

Accepted Answer

Assets

Question 4

"an incorporated form of partnership with a separate legal entity, members can limit liability"

Accepted Answer

describes a limited liability partnership

Question 5

Which principle: "personal assets and liabilities of the owner are kept separate from business"

Accepted Answer

business entity

Question 6

Which principle states "some items in accounts are of such low value not worth listing..."

Accepted Answer

materiality

Question 7

Accountants use depreciation as it fits with the accounting concept of

Accepted Answer

Accruals

Question 8

In the partners current account which of the following entries would you find on the DR side?

Accepted Answer

drawings

Question 9

How do you calculate basic "cost of goods sold"?

Accepted Answer

open stock + purchases - closing stock = cost of goods sold

Question 10

How does the COGS calculation develop to incorporate carriage in and purchase returns?

Accepted Answer

open inv + purch + carr in - purch rets - closing inv = COGS

Question 11

A partnership has a profit sharing ratio of 2:2:1, what is that in percentages?

Accepted Answer

40%, 40%, 20%

Question 12

Mark up is a profit percentage or fraction

Accepted Answer

added to the buying or cost price

Question 13

which principle states "assume the business will continue to trade for foreseeable future"

Accepted Answer

going concern

Question 14

which accounting characteristic "statements can be compared with those from previous years"

Accepted Answer

comparability

Question 15

In the partners current account which of the following transactions would appear on the CR side

Accepted Answer

interest on capital

Questions 15