Correct Answer:
B. The business is a separate accounting unit from its owner
Owner's personal transactions are kept separate from the business transactions.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
The business entity concept states that:
Related MCQs
The Federal Consolidated Fund includes:
A.
Only income tax
B.
All revenues received by the Federal Government, loans raised and money received in repayment of loans
C.
Only foreign aid
D.
Only trust money
Correct answer is:
B. All revenues received by the Federal Government, loans raised and money received in repayment of loans
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A stock split:
A.
Reduces the number of shares
B.
Raises new capital
C.
Distributes cash to shareholders
D.
Increases the number of shares and reduces the price per share without changing total equity
Correct answer is:
D. Increases the number of shares and reduces the price per share without changing total equity
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The statement of financial position (balance sheet) shows:
A.
Income and expenses for a period
B.
Cash flows for a period
C.
Assets, liabilities and equity at a particular date
D.
Changes in equity only
Correct answer is:
C. Assets, liabilities and equity at a particular date
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Fiscal policy is the use of:
A.
Interest rates and money supply by the central bank
B.
Exchange rate controls only
C.
Government spending and taxation to influence the economy
D.
Foreign aid only
Correct answer is:
C. Government spending and taxation to influence the economy
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An impairment loss arises when:
A.
The asset's market price rises
B.
Depreciation is charged
C.
The carrying amount of an asset exceeds its recoverable amount
D.
An asset is fully depreciated
Correct answer is:
C. The carrying amount of an asset exceeds its recoverable amount
Do you agree with this answer?
A Medium Term Budgetary Framework (MTBF) is:
A.
A multi-year (usually three-year) expenditure planning framework
B.
A monthly cash plan
C.
A tax collection target
D.
A foreign loan agreement
Correct answer is:
A. A multi-year (usually three-year) expenditure planning framework
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