Question 1

Which of the following is NOT an expense of a company?

Accepted Answer

A)  Cost of goods sold 
B)  Dividends paid to shareholders 
C)  Interest for the period 
D)  Depreciation on factory 
A)  Cost of goods sold 
B)  Dividends paid to shareholders 
C)  Interest for the period 
D)  Depreciation on factory

Question 2

Which of the following is NOT an expense of a company?

Accepted Answer

A)  Cost of goods sold 
B)  Repayment of principal on a loan 
C)  Repayment of interest on a loan 
D)  Sales commission 
A)  Cost of goods sold 
B)  Repayment of principal on a loan 
C)  Repayment of interest on a loan 
D)  Sales commission

Question 3

Which of the following statements about a balance sheet is true?

Accepted Answer

A)  A balance sheet presents the financial performance of a company for a period of time. 
B)  A balance sheet presents the company's financial position at a point in time. 
C)  A balance sheet shows which source of finance produced each asset. 
D)  A balance sheet includes all the resources of a company. 
A)  A balance sheet presents the financial performance of a company for a period of time. 
B)  A balance sheet presents the company's financial position at a point in time. 
C)  A balance sheet shows which source of finance produced each asset. 
D)  A balance sheet includes all the resources of a company.

Question 4

Which of the following is a liability?

Accepted Answer

A)  Retained profits 
B)  Prepaid advertising 
C)  Accumulated depreciation 
D)  Expenses payable 
A)  Retained profits 
B)  Prepaid advertising 
C)  Accumulated depreciation 
D)  Expenses payable

Question 5

The balance sheet of Hemp Ltd at 30 June 2016 showed: noncurrent assets $500 000; noncurrent liabilities $320 000; total liabilities $400 000; and shareholders' equity $300 000. What was the working capital of Hemp Ltd at 30 June 2016?

Accepted Answer

A)  $120 000 
B)  $180 000 
C)  $200 000 
D)  $300 000 
A)  $120 000 
B)  $180 000 
C)  $200 000 
D)  $300 000

Question 6

A company buys 100 computers for $1000 and sells 80 for $1200. What is gross profit?

Accepted Answer

A)  $16 000 
B)  $20 000 
C)  $40 000 
D)  None of the answers provided 
A)  $16 000 
B)  $20 000 
C)  $40 000 
D)  None of the answers provided

Question 7

Use the information given below (as at 30 June 2016) to answer the following question.
 
Assume no dividends were declared during the year. If the balance of retained profits at the start of the year was $50 000, what was the profit for the year?

Accepted Answer

A)  $30 000 
B)  $80 000 
C)  $50 000 
D)  $40 000 
A)  $30 000 
B)  $80 000 
C)  $50 000 
D)  $40 000

Question 8

In which of the following circumstances is revenue NOT earned by a company?

Accepted Answer

A)  In return for goods supplied, a customer paid $1000 in cash. 
B)  In return for goods supplied, a customer promised to pay $1000 later. 
C)  In return for goods supplied, a customer gave the company $1000 in equipment. 
D)  A customer paid $500 deposit for goods to be supplied in the next accounting period. 
A)  In return for goods supplied, a customer paid $1000 in cash. 
B)  In return for goods supplied, a customer promised to pay $1000 later. 
C)  In return for goods supplied, a customer gave the company $1000 in equipment. 
D)  A customer paid $500 deposit for goods to be supplied in the next accounting period.

Question 9

During 2016, Lift Ltd earned revenues of $500 and incurred expenses of $650. Retained profits at 1 January 2016 were $400, and at 31 December 2016 they were $225. What was the net profit or loss of Lift Ltd for the year?

Accepted Answer

A)  Net profit $150 
B)  Net profit $500 
C)  Net loss $150 
D)  Net loss $500 
A)  Net profit $150 
B)  Net profit $500 
C)  Net loss $150 
D)  Net loss $500

Question 10

Given only the following information, calculate net profit.

Accepted Answer

A)  $40 000 
B)  $60 000 
C)  $70 000 
D)  $90 000 
A)  $40 000 
B)  $60 000 
C)  $70 000 
D)  $90 000

Question 11

Which of the following statements is NOT true?

Accepted Answer

A)  If total assets owned by a business total $110 000 and owners' equity totals $30 000, then liabilities total $80 000. 
B)  If total assets decreased by $30 000 during a specific period and owners' equity decreased by $35 000 during the same period, the period's change in total liabilities was a $65 000 increase. 
C)  If total assets decreased by $50 000 during a specific period and owners' equity decreased by $40 000 during the same period, the period's change in total liabilities was a $10 000 decrease. 
D)  If total assets increased by $75 000 during a specific period and liabilities decreased by $10 000 during the same period, the period's change in total owners' equity was an
$85 000 increase. 
A)  If total assets owned by a business total $110 000 and owners' equity totals $30 000, then liabilities total $80 000. 
B)  If total assets decreased by $30 000 during a specific period and owners' equity decreased by $35 000 during the same period, the period's change in total liabilities was a $65 000 increase. 
C)  If total assets decreased by $50 000 during a specific period and owners' equity decreased by $40 000 during the same period, the period's change in total liabilities was a $10 000 decrease. 
D)  If total assets increased by $75 000 during a specific period and liabilities decreased by $10 000 during the same period, the period's change in total owners' equity was an
$85 000 increase.

Question 12

What is total revenue for the period in which: (i) credit sales are $100 000 of which $30 000 was received at year-end; (ii) $10 000 cash was received from customers for work done in the previous year; (iii) $12 000 was received from customers for work to be done in the next accounting period?

Accepted Answer

A)  $30 000. 
B)  $100 000. 
C)  $110 000. 
D)  $112 000. 
A)  $30 000. 
B)  $100 000. 
C)  $110 000. 
D)  $112 000.

Question 13

Which of the following statements is NOT true?

Accepted Answer

A)  If total assets decreased by $30 000 during the period and shareholders' equity decreased by $20 000, liabilities decreased by $10 000 for the period. 
B)  If total assets decreased by $50 000 during the period and shareholders' equity decreased by $30 000, liabilities decreased by $80 000 for the period. 
C)  If the total assets owned by a company were $80 000 and shareholders' equity totalled $35 000 for the period, liabilities are $45 000. 
D)  If total assets increased by $45 000 for the period and liabilities decreased by $20 000, shareholders' equity increased by $65 000. 
A)  If total assets decreased by $30 000 during the period and shareholders' equity decreased by $20 000, liabilities decreased by $10 000 for the period. 
B)  If total assets decreased by $50 000 during the period and shareholders' equity decreased by $30 000, liabilities decreased by $80 000 for the period. 
C)  If the total assets owned by a company were $80 000 and shareholders' equity totalled $35 000 for the period, liabilities are $45 000. 
D)  If total assets increased by $45 000 for the period and liabilities decreased by $20 000, shareholders' equity increased by $65 000.

Question 14

Sales less cost of goods sold equals:

Accepted Answer

A)  gross profit. 
B)  net profit. 
C)  net assets. 
D)  net sales. 
A)  gross profit. 
B)  net profit. 
C)  net assets. 
D)  net sales.

Question 15

Which of the following statements is true?

Accepted Answer

A)  If the liabilities owed by a business total $450 000, then the assets also total $450 000. 
B)  If the assets owned by a business total $500 000, then shareholders' equity also totals $500 000. 
C)  If the assets owned by a business total $90 000 and liabilities total $50 000, then shareholders' equity totals $40 000. 
D)  If the assets owned by a business total $90 000 and liabilities total $50 000, then shareholders' equity totals $140 000. 
A)  If the liabilities owed by a business total $450 000, then the assets also total $450 000. 
B)  If the assets owned by a business total $500 000, then shareholders' equity also totals $500 000. 
C)  If the assets owned by a business total $90 000 and liabilities total $50 000, then shareholders' equity totals $40 000. 
D)  If the assets owned by a business total $90 000 and liabilities total $50 000, then shareholders' equity totals $140 000.

Question 16

Use the information given below (as at 30 June 2016) to answer the following question.
 
Assume no dividends were declared during the year. What is the balance of total assets at 30 June 2016?

Accepted Answer

A)  $200 000 
B)  $210 000 
C)  $290 000 
D)  $310 000 
A)  $200 000 
B)  $210 000 
C)  $290 000 
D)  $310 000

Question 17

Bruce operates a coffee stall at the university. On 30 June 2016, he has $400 in his business bank account, the stall and equipment are worth $5200, ingredients on hand cost $60 and paper cups cost $10. Students owe him $120 and he owes his suppliers $370. He also owes his mother $4100, which enabled him to get started. What is Bruce's owners' equity?

Accepted Answer

A)  $400 
B)  $1320 
C)  $4000 
D)  $5420 
A)  $400 
B)  $1320 
C)  $4000 
D)  $5420

Question 18

To which balance sheet grouping does the item 'bank loan repayable in three years' belong?

Accepted Answer

A)  Current asset 
B)  Noncurrent asset 
C)  Current liability 
D)  Noncurrent liability 
A)  Current asset 
B)  Noncurrent asset 
C)  Current liability 
D)  Noncurrent liability

Question 19

To which balance sheet grouping does the item 'accounts payable' belong?

Accepted Answer

A)  Current asset 
B)  Noncurrent asset 
C)  Current liability 
D)  Noncurrent liability 
A)  Current asset 
B)  Noncurrent asset 
C)  Current liability 
D)  Noncurrent liability

Question 20

Which of the following statements about accumulated depreciation is true?

Accepted Answer

A)  Accumulated depreciation is the amount of depreciation recognised at the date of disposal of the asset. 
B)  Cost less accumulated depreciation gives net book value. 
C)  Accumulated depreciation represents the depreciation charge for the current period. 
D)  Accumulated depreciation is ignored when an asset is sold. 
A)  Accumulated depreciation is the amount of depreciation recognised at the date of disposal of the asset. 
B)  Cost less accumulated depreciation gives net book value. 
C)  Accumulated depreciation represents the depreciation charge for the current period. 
D)  Accumulated depreciation is ignored when an asset is sold.

Which of the following is NOT an expense of a company?

Which of the following is NOT an expense of a company?

Which of the following statements about a balance sheet is true?

Which of the following is a liability?

The balance sheet of Hemp Ltd at 30 June 2016 showed: noncurrent assets $500 000; noncurrent liabilities $320 000; total liabilities $400 000; and shareholders' equity $300 000. What was the working capital of Hemp Ltd at 30 June 2016?

A company buys 100 computers for $1000 and sells 80 for $1200. What is gross profit?

Use the information given below (as at 30 June 2016) to answer the following question. Assume no dividends were declared during the year. If the balance of retained profits at the start of the year was $50 000, what was the profit for the year?

In which of the following circumstances is revenue NOT earned by a company?

During 2016, Lift Ltd earned revenues of $500 and incurred expenses of $650. Retained profits at 1 January 2016 were $400, and at 31 December 2016 they were $225. What was the net profit or loss of Lift Ltd for the year?

Given only the following information, calculate net profit.

Which of the following statements is NOT true?

What is total revenue for the period in which: (i) credit sales are $100 000 of which $30 000 was received at year-end; (ii) $10 000 cash was received from customers for work done in the previous year; (iii) $12 000 was received from customers for work to be done in the next accounting period?

Which of the following statements is NOT true?

Sales less cost of goods sold equals:

Which of the following statements is true?

Use the information given below (as at 30 June 2016) to answer the following question. Assume no dividends were declared during the year. What is the balance of total assets at 30 June 2016?

To which balance sheet grouping does the item 'bank loan repayable in three years' belong?

To which balance sheet grouping does the item 'accounts payable' belong?

Which of the following statements about accumulated depreciation is true?

Introduction to Financial Accounting

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Internal Control and Cash

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters

Exam 2: Measuring and Evaluating Financial Position and Financial Performance

Which of the following is NOT an expense of a company?

Which of the following is NOT an expense of a company?

Which of the following statements about a balance sheet is true?

Which of the following is a liability?

The balance sheet of Hemp Ltd at 30 June 2016 showed: noncurrent assets $500 000; noncurrent liabilities $320 000; total liabilities $400 000; and shareholders' equity $300 000. What was the working capital of Hemp Ltd at 30 June 2016?

A company buys 100 computers for $1000 and sells 80 for $1200. What is gross profit?

Use the information given below (as at 30 June 2016) to answer the following question. Assume no dividends were declared during the year. If the balance of retained profits at the start of the year was $50 000, what was the profit for the year?

In which of the following circumstances is revenue NOT earned by a company?

During 2016, Lift Ltd earned revenues of $500 and incurred expenses of $650. Retained profits at 1 January 2016 were $400, and at 31 December 2016 they were $225. What was the net profit or loss of Lift Ltd for the year?

Given only the following information, calculate net profit.

Which of the following statements is NOT true?

What is total revenue for the period in which: (i) credit sales are $100 000 of which $30 000 was received at year-end; (ii) $10 000 cash was received from customers for work done in the previous year; (iii) $12 000 was received from customers for work to be done in the next accounting period?

Which of the following statements is NOT true?

Sales less cost of goods sold equals:

Which of the following statements is true?

Use the information given below (as at 30 June 2016) to answer the following question. Assume no dividends were declared during the year. What is the balance of total assets at 30 June 2016?

To which balance sheet grouping does the item 'bank loan repayable in three years' belong?

To which balance sheet grouping does the item 'accounts payable' belong?

Which of the following statements about accumulated depreciation is true?

Introduction to Financial Accounting

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Internal Control and Cash

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters