Accounting concepts

Practice

Recall it first, then use it — testing yourself builds the memory, where rereading the notes above only feels easier.

Recall and application shuffled together — you have to work out what each item wants before you can answer it, which is the part the exam actually tests. Both kinds feed the same spacing schedule, so anything you miss comes back sooner.

Say the answer out loud before flipping — that attempt is where the learning happens, even when you get it wrong.

Exam-style only. Instant feedback, shuffled each attempt, best score saved on this device.

What actually comes up

Three questions every year, always built around ONE small NZ business. The same pattern repeats: justify an element's classification using its three characteristics and a named recognition criterion, apply a concept (going concern, accrual basis, capital vs revenue expenditure) to a real transaction, and discuss a qualitative characteristic's effect on the owner's decision — always finishing with one limitation.

Across 4 years

The pattern — what to prepare

The 2025 paper ↗ Marking schedule ↗

Question One

Kool Kicks gives staff shoes worth $2,000/year (a staff expense); a burst pipe requires inventory to be revalued from $20,000 to $6,000 (historical cost $54,000).

• a Justify why staff shoes are reported as an expense, using the three characteristics of the expense definition and the recognition criterion of faithful representation. Merit
• b Justify how the damaged inventory should be reported under the lower-of-cost-or-net-realisable-value policy, explaining relevance and one limitation of the revaluation. Excellence

Question Two

Kool Kicks buys

• a Explain how the new treadmills and lease illustrate going concern. Achieved
• b Justify how the treadmills will be reported using the characteristics/definition of an asset. Merit
• c Justify the depreciation methods used, explaining the definition of depreciation and why units of use suits the treadmills better than straight line. Excellence

Question Three

Kool Kicks received $2,400 in deposits for limited-edition shoes to be delivered in May; a monthly revenue summary splits general vs limited-edition sales.

• a Justify the treatment of the deposits under the accrual basis — the impact on Income Statement revenue and the classification in the Statement of Financial Position. Merit
• b Discuss how splitting revenue into general and limited-edition sales helps the owner's decision-making, using materiality. Excellence

The 2024 paper ↗ Marking schedule ↗

Question One

GAG buys

• a Justify how the new equipment is reported, using the concept of capital expenditure to justify the classification and dollar amount. Merit
• b Justify why the invoice increases liabilities, explaining how accounts payable meets all liability characteristics and the recognition criterion of probable outflow. Excellence

Question Two

GAG offers two membership payment plans but reports all fees as one revenue line; an advertisement offers 12/18/24-month memberships; Georgie gifts branded backpacks to a fun run, her children, and herself.

• a In accordance with materiality, justify whether reporting membership fees as one total negatively impacts decision-making. Excellence
• b Explain how the membership advertisement illustrates going concern. Achieved
• c Discuss how gifting backpacks is reported, explaining the accounting entity concept and the characteristics of an expense. Excellence

Question Three

A two-year Income Statement extract shows revenue and profit growth; a debtors note shows accounts receivable less a 1% doubtful-debts allowance.

• a Discuss the usefulness of the two-year Income Statement extract for decision-making, using reporting period and comparability, and how it could inform a membership-fee pricing decision. Excellence
• b Justify how the accounts receivable note aids decision-making, using faithful representation, the predictive value of relevance, and one limitation. Excellence

The 2023 paper ↗ Marking schedule ↗

Question One

Movie MatriX's income splits into non-3D tickets, 3D tickets, and 3D glasses sales across two years; a customer survey and monthly income summary are given.

• a(i) Explain how non-3D ticket revenue meets the characteristics of income. Achieved
• a(ii) In accordance with materiality, justify whether 3D glasses sales should be reported separately in the Income Statement. Merit
• b Discuss the importance of the survey and monthly summary for profitability decisions, using relevance (predictive AND confirmatory value) and timeliness. Excellence

Question Two

A 3D projector imported from Germany cost NZ$45,000 plus NZ$4,000 delivery/installation (NZ$49,000 total); depreciated by straight line (8% p.a.) or units of use (

• a Explain how the 3D projector is reported, using monetary measurement and historical cost. Achieved
• b(i) Explain how depreciation on the projector meets the characteristics of an expense. Merit
• b(ii) Justify why units of use is the most appropriate method for Movie MatriX to depreciate the 3D projector. Excellence
• c Explain one limitation of using the projector's carrying amount as a basis for decision-making. Merit

Question Three

A quarterly insurance premium of $9,000 means $39,000 has been paid by balance date, including one month prepaid; the Statement of Cash Flows shows a $4,100 overdraft.

• a Justify how the prepaid insurance is reported, explaining the accrual basis and the classification/amount of the prepayment. Merit
• b Justify why the Statement of Cash Flows matters to a potential lender, explaining its purpose, how the overdraft meets the recognition criterion of faithful representation of a liability, and how it may influence lending decisions. Excellence

The 2022 paper ↗ Marking schedule ↗

Question One

FWT's Income Statement extract shows sales rising from $85,500 to $95,200 and profit from

• a Discuss the usefulness of the Income Statement extract for decision-making, explaining the concepts of comparability and understandability, and how Frankie could use the information to make a decision in the 2023 financial year. Excellence
• b Justify how the food truck spending will be reported in the Income Statement and/or Statement of Financial Position, explaining the concepts of revenue expenditure and capital expenditure, and how the food truck meets the recognition criterion of faithful representation for an asset. Excellence

Question Two

Frankie supplied food free of charge at his daughter's graduation party; the costs (food and wages) totalled

• a Discuss how and why the graduation-party spending will be reported, explaining whether or not the costs meet EACH characteristic of an expense, and the entity concept. Excellence
• b Justify how reporting accounts receivable enhances decision-making, explaining how it meets the characteristics of an asset, the qualitative characteristic of relevance, and one limitation to consider. Excellence

Question Three

A trial-balance extract shows $3,000 interest on an 8% p.a. loan of $40,000 (due September 2028), with a further $200 interest due at balance date but not yet paid.

• a Discuss how the loan will be reported in the Statement of Financial Position, explaining how it meets the characteristics of a liability and the going concern concept. Merit
• b Justify how the $200 interest due will be reported in the Income Statement and Statement of Financial Position, explaining the concepts of period reporting and accrual basis, and how the impacted accounts are classified and why. Excellence

Grades above are read from each year's own Achievement/Merit/Excellence evidence, condensed to the actual task — the schedules also grade holistically per question on a 0–8 scale, not a fixed mark per bullet.

Past exams & resources

⏱ Timed opens the paper and starts a countdown matching the exam length. Official NZQA PDFs. If a link 404s, that year’s paper may sit under a slightly different code: browse the NZQA subject page.