Accounting concepts: five questions to try now
Real past-paper questions, the answer key from the mark scheme, and the explanation that goes with it. No account needed to answer them.
Question 1
An item is included in the financial statements because it affects their interpretation.
Which accounting concept is being applied?
Answer: B.
Question 2
A business has a practice of not conducting a physical count of unused stationery at the year end.
Which accounting concept has been applied for this practice?
Answer: B.
Question 3
A business purchased a pocket calculator for the use of the book-keeper. The accountant included it as an expense in the income statement.
Which accounting concept is applied?
Answer: B.
Question 4
A company does not include in the financial statements the value of skills gained by its employees from training programmes.
Which accounting concept is being applied?
Answer: C.
Question 5
An item is included in a financial statement because it affects the interpretation of financial statements.
Which accounting concept is being applied?
Answer: B.
What this practice covers
These questions are drawn from past CIE 9706 Accounting papers and filtered to accounting concepts. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
What examiners see students get wrong here
These are the errors that cost marks on accounting concepts, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Saying prudence means understating profit deliberately. It means not overstating it.
- Explaining a concept in the abstract when the question gives a scenario. Apply it to the scenario given.
- Using going concern to justify the accruals adjustments. Accruals is the concept behind those.
- Saying money measurement means everything is measured in money, without drawing the conclusion that some real assets are therefore excluded.
- Confusing realisation with the receipt of cash.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Accounting concepts revision notes.