Subject: FPSC Past Papers

Explanation
 Assets refers to things which have future economic value and bank overdraft is the amount withdrawn in excess of the amount deposited in bank. So, inflow of economic benefits is referred to as Income.

Explanation
Equity as a degree of residual ownership in a firm or asset after subtracting all debts associated with that asset. Equity represents the shareholders' stake in the company, identified on a company's balance sheet.

Explanation
Revenue is  income, especially when of an organization and of a substantial nature.

Explanation
Returns inwards are goods returned to the selling entity by the customer, such as for warranty claims or outright returns of goods for a credit. For the customer, this results in the following accounting transaction: A debit (reduction) of accounts payable. A credit (reduction) of purchased inventory.

Explanation
Larger number of manager subordinates and higher level manager are termed as broader responsibility center.

Explanation
A manager who is responsible for only cost of company belongs to cost center.

Explanation
Each adjusting entry has a dual purpose :  to make the income statement report the proper revenue or expense and  to make the balance sheet report the proper asset or liability.

Explanation
Accounts payable is the money a company owes its vendors, while accounts receivable is the money that is owed to the company, typically by customers.

Explanation

Explanation
The purpose of adjusting entries is to convert cash transactions into the accrual accounting method.

Explanation
 Assets refers to things which have future economic value and bank overdraft is the amount withdrawn in excess of the amount deposited in bank. So, inflow of economic benefits is referred to as Income.

Explanation
Equity as a degree of residual ownership in a firm or asset after subtracting all debts associated with that asset. Equity represents the shareholders' stake in the company, identified on a company's balance sheet.

Explanation
Revenue is  income, especially when of an organization and of a substantial nature.

Explanation
Returns inwards are goods returned to the selling entity by the customer, such as for warranty claims or outright returns of goods for a credit. For the customer, this results in the following accounting transaction: A debit (reduction) of accounts payable. A credit (reduction) of purchased inventory.

Explanation
Larger number of manager subordinates and higher level manager are termed as broader responsibility center.

Explanation
A manager who is responsible for only cost of company belongs to cost center.

Explanation
Each adjusting entry has a dual purpose :  to make the income statement report the proper revenue or expense and  to make the balance sheet report the proper asset or liability.

Explanation
Accounts payable is the money a company owes its vendors, while accounts receivable is the money that is owed to the company, typically by customers.

Explanation

Explanation
The purpose of adjusting entries is to convert cash transactions into the accrual accounting method.

Explanation
 Assets refers to things which have future economic value and bank overdraft is the amount withdrawn in excess of the amount deposited in bank. So, inflow of economic benefits is referred to as Income.

Explanation
Equity as a degree of residual ownership in a firm or asset after subtracting all debts associated with that asset. Equity represents the shareholders' stake in the company, identified on a company's balance sheet.

Explanation
Revenue is  income, especially when of an organization and of a substantial nature.

Explanation
Returns inwards are goods returned to the selling entity by the customer, such as for warranty claims or outright returns of goods for a credit. For the customer, this results in the following accounting transaction: A debit (reduction) of accounts payable. A credit (reduction) of purchased inventory.

Explanation
Larger number of manager subordinates and higher level manager are termed as broader responsibility center.

Explanation
A manager who is responsible for only cost of company belongs to cost center.

Explanation
Each adjusting entry has a dual purpose :  to make the income statement report the proper revenue or expense and  to make the balance sheet report the proper asset or liability.

Explanation
Accounts payable is the money a company owes its vendors, while accounts receivable is the money that is owed to the company, typically by customers.

Explanation

Explanation
The purpose of adjusting entries is to convert cash transactions into the accrual accounting method.

Explanation
Unearned income i s income from investments and other sources unrelated to employment. Examples of unearned income include interest from savings accounts, bond interest, alimony, and dividends from stock.

Explanation
Expense is  the cost incurred in or required for something.

Explanation
It is also called the Original cost method, Fixed Installment method or Equal Installment method.

Explanation
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life

Explanation
Book value is the net value of a firm's assets found on its balance sheet, and it is roughly equal to the total amount all shareholders would get if they liquidated the company.

Explanation
Obsolescence is the state of being which occurs when an object, service, or practice is no longer maintained, required, or degraded even though it may still be in good working order.

Explanation
In financial planning, most high option price wil l lead to  longer option period . option period is a time frame or period of time, which is valid for an option to be exercised before or on the expiration date. 

Explanation
Depreciation represents how much of an asset's value has been used up. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use.

Explanation
The straight-line method of depreciation assumes  a constant rate of depreciation . It calculates how much a specific asset depreciates in one year, and then depreciates the asset by that amount every year after that. 

Explanation
A deferred tax liability is a tax that is assessed or is due for the current period but has not yet been paid—meaning that it will eventually come due.

Explanation
Unearned income i s income from investments and other sources unrelated to employment. Examples of unearned income include interest from savings accounts, bond interest, alimony, and dividends from stock.

Explanation
Expense is  the cost incurred in or required for something.

Explanation
It is also called the Original cost method, Fixed Installment method or Equal Installment method.

Explanation
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life

Explanation
Book value is the net value of a firm's assets found on its balance sheet, and it is roughly equal to the total amount all shareholders would get if they liquidated the company.

Explanation
Obsolescence is the state of being which occurs when an object, service, or practice is no longer maintained, required, or degraded even though it may still be in good working order.

Explanation
In financial planning, most high option price wil l lead to  longer option period . option period is a time frame or period of time, which is valid for an option to be exercised before or on the expiration date. 

Explanation
Depreciation represents how much of an asset's value has been used up. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use.

Explanation
The straight-line method of depreciation assumes  a constant rate of depreciation . It calculates how much a specific asset depreciates in one year, and then depreciates the asset by that amount every year after that. 

Explanation
A deferred tax liability is a tax that is assessed or is due for the current period but has not yet been paid—meaning that it will eventually come due.

Explanation
Unearned income i s income from investments and other sources unrelated to employment. Examples of unearned income include interest from savings accounts, bond interest, alimony, and dividends from stock.

Explanation
Expense is  the cost incurred in or required for something.

Explanation
It is also called the Original cost method, Fixed Installment method or Equal Installment method.

Explanation
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life

Explanation
Book value is the net value of a firm's assets found on its balance sheet, and it is roughly equal to the total amount all shareholders would get if they liquidated the company.