These are ACCA F3 (FA/FFA) Financial Accounting MCQs for Part-B of the Syllabus “The qualitative characteristics of financial information”.

These multiple-choice questions (MCQs) are designed to help ACCA F3 students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

Students should not attempt these MCQs until they have finished the entire chapter.
All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F3 (FA/FFA) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:	ACCA – Associations of Chartered Certified Accountants
Fundamental Level:	Knowledge, FIA – Foundation in Accounting
Subject:	Financial Accounting
Paper:	F3 – FA/FFA
Chapter:	The qualitative characteristics of financial information
Chapter Number:	02 of the Practice and Exam Kit
Syllabus Area:	B – “The qualitative characteristics of financial information”
Questions Type:	CBE MCQs
Exam Section:	Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part B of the Syllabus; “The qualitative characteristics of financial information” of ACCA F3 (FA/FFA) Financial Accounting Module.

Time

These MCQs are not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate

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Students will get their F3 CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

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Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “( select all those which are correct/ or incorrect)“.
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Type numbers: Type your answer in numbers as per the requirement of the question.

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F3 - Chapter 2 - Part A - MCQs

Course: ACCA - FIA
Subject: F3 (FA/FFA) Financial Accounting
Syllabus Area: B - The qualitative characteristics of financial information
Chapter in Kit: 02 - The qualitative characteristics of financial information
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

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1 / 14

Listed below are some characteristics of financial information.

Relevance
Consistency
Faithful representation
Accuracy

Which TWO of these are qualitative characteristics of financial information according to the IASB's Conceptual Framework for Financial Reporting?

1 and 2

1 and 3

3 and 4

2 and 4

2 / 14

Sales revenue should be recognised when goods and services have been supplied; costs are incurred when goods and services have been received.

Which accounting concept governs the above?

The business entity concept

The materiality concept

The accruals concept

The duality concept

3 / 14

Which of the following statements about accounting concepts and the characteristics of financial
information are correct?

The concept of accruals requires transactions to be reflected in the financial statements once the cash or its equivalent is received or paid.
Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements.
Based on faithful representation, it may sometimes be necessary to exclude material information from financial statements due to difficulties establishing an accurate figure.

1 and 2 only

1 only

2 and 3 only

2 only

4 / 14

Which of the following accounting concepts means that similar items should receive a similar accounting treatment?

Conformity

Accruals

Consistency

Matching

5 / 14

Which ONE of the following statements describes faithful representation, a qualitative characteristic of faithful representation?

Revenue earned must be matched against the expenditure incurred in earning it.

Financial information should be complete, neutral and free from error.

The presentation and classification of items in the financial statements should stay the same from one period to the next.

Having information available to decision-makers in time to be capable of influencing their decisions.

6 / 14

Which one of the following is NOT a qualitative characteristic of financial information according to the Conceptual Framework for Financial Reporting?

Faithful representation

Timeliness

Relevance

Accruals

7 / 14

According to the IASB's Conceptual Framework for Financial Reporting, which TWO of the following are part of faithful representation?

It is neutral
It is relevant
It is presented fairly
It is free from material error

1 and 2

2 and 3

3 and 4

1 and 4

8 / 14

Which of the following statements about prudence is correct?

A prudent decision will mean lower expenditure

Prudence does not allow for overstatement of liabilities

Prudence requires assets to be carried at their lowest possible valuation

When prudence is applied, income is not recognised until the cash has been received

9 / 14

Which of the following statements is/are incorrect?

Companies should create provisions in times of company growth to be utilised in more difficult times, to smooth profits.

Companies should never change the presentation or classification of items in their financial statements, even if there is a significant change in the nature of operations.

10 / 14

According to the IASB Conceptual Framework which of the following is NOT an objective of financial statements?

Providing information regarding the financial position of a business

Providing information regarding the performance of a business

Enabling users to assess the performance of management to aid decision making

Providing reliable investment advice

11 / 14

Which accounting concept should be considered if the owner of a business takes goods from inventory for their own personal use?

The going concern concept

The business entity concept

The accruals concept

The materiality concept

12 / 14

Listed below are some comments on accounting concepts.

Financial statements always treat the business as a separate entity.
Materiality means that only items having a physical existence may be recognised as assets.
Provisions are estimates and therefore can be altered to make the financial results of a business more attractive to investors.

Which, if any, of these comments is correct, according to the IASB's Conceptual Framework for Financial Reporting?

3 only

1 only

2 only

None of them

13 / 14

The IASB's Conceptual Framework for Financial Reporting gives six qualitative characteristics of financial information. What are these six characteristics?

Accuracy, Faithful representation, Comparability, Verifiability, Timeliness and Understandability

Relevance, Faithful representation, Comparability, Verifiability, Timeliness and Understandability

Relevance, Comparability, Consistency, Verifiability, Timeliness and Understandability

Relevance, Faithful representation, Consistency, Verifiability, Timeliness and Understandability

14 / 14

Which accounting concept states that omitting or misstating this information could influence users of the financial statements?

The materiality concept

The going concern concept

The accruals concept

The consistency concept

Your score is

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F3 (FA/FFA) – Chapter 2 – PART B – CBE MCQs – ACCA