Presented below are the assumptions made and characteristics of information used in this chapter. 1. Accounting entity assumption 2. Going concern assumption 3. Accrual basis assumption 4. Period assumption 5. Relevance 6. Faithful representation 7. Comparability 8. Verifiability 9. Materiality 10. Timeliness 11. Understandability Identify by number the accounting assumption or characteristic that describes each situation below. Type the number of the correct assumption or characteristic into the field provided. Do not use a number more than once. (a) Repair tools are expensed when purchased. These repair tools have a useful life of more than one accounting period.

Briefly explain the various types of accounting errors. (14 marks)b) What are the characteristics of good accounting information?(6 marks)*END*

Accounting information is considered to be relevant when itGroup of answer choicesCan be depended on to represent the economic conditions and events that it is intended to represent.Is capable of making a difference in a decisionIn understandable by reasonably informed users of accounting informationIs verifiable and neutral

What two primary qualitative characteristics make accounting information useful?

Question 1True or false: “Accounting information is useful to employees to understand firm stability and negotiate employment contracts.”1 pointTrueFalse

Select the incorrect statement in relation to financial accounting.(1) It provides the information useful to stakeholders for their decision making.(2) It follows accounting standards and laws.(3) It uses historical and estimated information.(4) It is prepared once in a financial year.(5) It is one of the main types of accounting. (……)02. Which of the following contains accounting professional environment forces?(1) Accounting software, electronic system, information technology(2) Population growth, inflation, interest rate(3) Interest rate, inflation, tax(4) Employment opportunities, income distribution, population density(5) Accounting professional organizations, accounting standards, accounting concepts03. Total assets and total liabilities of Isai Nila business on 01.03.2022 were Rs. 125 000 and Rs. 50 000respectively. The following transactions took place during March 2022.- Owner paid bank loan installment Rs. 11 200 from his own fund. This payment includes equalbank loan interest for January, February and March Rs. 1 200.- Owner drew Rs. 5 000.- Inventory costing Rs. 20 000 was sold for Rs. 35 000 on credit basis.What is value of net assets on 31.03.2022?(1) Rs. 101 200 (2) Rs. 95 800 (3) Rs. 100 800(4) Rs. 85 000 (5) Rs. 96 200⚫ Use the following information to answer the questions 4 – 5.Akilan business purchased goods for Rs. 44 000 on credit basis from Aathi business including 10% VAT.Out of these goods, goods at value Rs. 22 000 including 10% VAT were returned to Aathi business. 50%of remaining goods were sold for Rs. 33 000 to Athira business, including VAT 10%. Rs. 31 000 wasreceived in cash from Athira business from the receivables and the remaining receivable amount waswritten off as bad debt.For Examiner’s Use onlyFor paper IQ.Nos. Marks01 – 1516 - 25Totalnjhz;ilkhdhW ntspf;fs epiyak; elhj;Jk;,uz;lhk; jtizg; guPl;ir - 2022Conducted by Field Work Centre, Thondaimanaru2st Term Examination - 2022FWCTime: 3 Hours & 10 MinutesAccounting - IGrade :- 12 (2023)Index Number: .....................................Grade - 12 (2023) – 2023 FWC - 2 - Accounting- I04. Select the answer which contains the correct order of source documents used to be recorded the abovetransactions in the accounting books of Akilan business.(1) purchase invoice, credit note, sales invoice, receipt, journal voucher(2) purchase invoice, debit note, sales invoice, voucher, journal voucher(3) purchase invoice, credit note, receipt, journal voucher, sales invoice(4) sales invoice, debit note, purchase invoice, receipt, journal voucher(5) purchase invoice, debit note, sales invoice, receipt, journal voucher05. What is balance of VAT account after the above transactions?(1) Rs. 800 credit (2) Rs. 800 debit (3) Rs. 1 000 credit(4) Rs. 1 000 debit (5) Rs. 900 debit06. What is increase or decrease in net assets due to the above transactions?(1) Rs. 11 000 (2) Rs. 9 000 (3) Rs. 10 100(4) Rs. 5 000 (5) Rs. 12 10007. A business carries out all business transactions through bank account. Monthly bank statement of thisbusiness showed Rs. 270 000 credit balance on 30.06.2022. The values of cheques deposited but notrealized and issued but not presented on this date were Rs. 85 000 and Rs. 45 000 respectively. The cashbalance on 30.06.2022 is,(1) Rs. 225 000 debit (2) Rs. 23 000 debit (3) Rs. 270 000 debit(4) Rs. 310 000 debit (5) Rs. 355 000 debit⚫ Use the following information to answer the questions 8 – 9.Debtor list balance of Tharaki business was Rs. 58 000. This balance was not equal to debtor controlaccount balance. The reasons for the difference were as follows.- Discount allowed Rs. 3 500 was recorded in cash receipt journal as Rs. 3 000.- Interest levied on debtor Rs. 4 400 was recorded in debtor ledger as Rs. 400 and in interest leviedaccount as Rs. 4 000.- Set off Rs. 3 000 was recorded in debit side of both accounts in general ledger.- Bad debt Rs. 2 400 was recorded as Rs. 400 in debtor ledger and as Rs. 2 000 in bad debt account.08. The balance of adjusted debtor control account and the balance of debtor control account before rectifyingerrors are,(1) Rs. 66 500, Rs. 59 500 (2) Rs. 61 000, Rs. 55 500 (3) Rs. 59 500, Rs. 58 500(4) Rs. 59 500, Rs. 66 000 (5) Rs. 59 500, Rs. 55 50009. The balance of suspense account generated in trial balance due to the above errors is,(1) Rs. 6 000 credit (2) Rs. 6 000 debit (3) Rs. 64 000 debit(4) Rs. 5 600 credit (5) Rs. 5 600 debit10. The accounting concepts which provide the base for recognition of the lower of either cost or net realizablevalue of inventory as the value of inventory are,(1) materiality and matching concepts (2) matching and timely concepts(3) prudence and realization concepts (4) prudence and historical cost concepts(5) prudence and matching concepts