Question 1

Which of the following may be a liability of a business enterprise?

Accepted Answer

A)  Share capital 
B)  Wages payable 
C)  Retained profits 
D)  Marketable security 
A)  Share capital 
B)  Wages payable 
C)  Retained profits 
D)  Marketable security

Question 2

Use the information given below to answer the following question.
 
What is the net profit for 2016?

Accepted Answer

A)  $70 000 
B)  $62 000 
C)  $104 000 
D)  $112 000
) 
A)  $70 000 
B)  $62 000 
C)  $104 000 
D)  $112 000
)

Question 3

Which of the following statements is NOT true?

Accepted Answer

A)  Judgements need to be made in determining profit. 
B)  Attempts are made to measure incomplete transactions. 
C)  The impact of transactions is recognised when cash is received or paid. 
D)  Estimates are made of certain balance sheet items. 
A)  Judgements need to be made in determining profit. 
B)  Attempts are made to measure incomplete transactions. 
C)  The impact of transactions is recognised when cash is received or paid. 
D)  Estimates are made of certain balance sheet items.

Question 4

Assets are initially recorded at cost. What assumption/concept underlies this procedure?

Accepted Answer

A)  Accounting entity 
B)  Monetary 
C)  Historical cost 
D)  Going concern 
A)  Accounting entity 
B)  Monetary 
C)  Historical cost 
D)  Going concern

Question 5

A company's assets are differentiated from the senior manager's. What assumption/concept underlies this procedure?

Accepted Answer

A)  Accounting entity 
B)  Monetary 
C)  Historical cost 
D)  Going concern 
A)  Accounting entity 
B)  Monetary 
C)  Historical cost 
D)  Going concern

Question 6

Mike's Mulching (MM) had the following assets and liabilities:
 
Shareholders' equity would be:

Accepted Answer

A)  $2300. 
B)  $31 000. 
C)  $13 300. 
D)  None of the answers provided. 
A)  $2300. 
B)  $31 000. 
C)  $13 300. 
D)  None of the answers provided.

Question 7

LPR is a company that commenced business on 1 January 2016. Below are the balances in the 30 June 2016 financial statements.
 
What is the net profit for the period ending 30 June 2016?

Accepted Answer

A)  $2000 
B)  $4000 
C)  $5000 
D)  $7000 
A)  $2000 
B)  $4000 
C)  $5000 
D)  $7000

Question 8

Financial performance means:

Accepted Answer

A)  providing information about the cash position of an entity. 
B)  setting out the enterprise's set of financial resources and obligations at a point in time. 
C)  identifying, measuring and communicating economic information to allow informed decisions. 
D)  generating new resources from day-to-day operations over a period of time. 
A)  providing information about the cash position of an entity. 
B)  setting out the enterprise's set of financial resources and obligations at a point in time. 
C)  identifying, measuring and communicating economic information to allow informed decisions. 
D)  generating new resources from day-to-day operations over a period of time.

Question 9

Use the information given below at 30 June 2016 to answer the following question.
 
What is the balance of shareholder equity?

Accepted Answer

A)  $200 000 
B)  $360 000 
C)  $660 000 
D)  None of the answers provided 
A)  $200 000 
B)  $360 000 
C)  $660 000 
D)  None of the answers provided

Question 10

The Great Drink Company, in preparing its balance sheet, excludes the general manager's personal motor vehicle (not used in the business) because of which of the following accounting assumption?

Accepted Answer

A)  The historical cost assumption 
B)  The reliability assumption 
C)  The accounting entity assumption 
D)  The accounting period assumption 
A)  The historical cost assumption 
B)  The reliability assumption 
C)  The accounting entity assumption 
D)  The accounting period assumption

Question 11

A balance sheet:

Accepted Answer

A)  lists the assets and liabilities at present cash values. 
B)  shows how the resources of an entity change during a period of time. 
C)  shows all facts affecting the financial position of the entity. 
D)  lists the assets, liabilities and owners' equity at a specific point in time. 
A)  lists the assets and liabilities at present cash values. 
B)  shows how the resources of an entity change during a period of time. 
C)  shows all facts affecting the financial position of the entity. 
D)  lists the assets, liabilities and owners' equity at a specific point in time.

Question 12

During 2016, a company makes credit sales of $500 000, of which $375 000 is collected at year-end. It pays $200 000 in expenses and owes $25 000 for electricity used during 2016. What would the profit be if cash accounting rather than accrual accounting was used?

Accepted Answer

A)  $150 000 
B)  $175 000 
C)  $275 000 
D)  $300 000 
A)  $150 000 
B)  $175 000 
C)  $275 000 
D)  $300 000

Question 13

Which of the following statements about an income statement is NOT true?

Accepted Answer

A)  An income statement provides information on an organisation's profitability at a certain point in time. 
B)  An income statement includes revenues earned during a period, and expenses incurred in earning the revenues. 
C)  The expenses may include depreciation. 
D)  For revenue to be included, it is not necessary for cash to have been received. 
A)  An income statement provides information on an organisation's profitability at a certain point in time. 
B)  An income statement includes revenues earned during a period, and expenses incurred in earning the revenues. 
C)  The expenses may include depreciation. 
D)  For revenue to be included, it is not necessary for cash to have been received.

Question 14

Which type of information would be of least interest to employees?

Accepted Answer

A)  Proposed expansion of the business 
B)  Long-term financial stability 
C)  Dividends declared 
D)  Profitability 
A)  Proposed expansion of the business 
B)  Long-term financial stability 
C)  Dividends declared 
D)  Profitability

Question 15

Which of the following statements about an income statement is true?

Accepted Answer

A)  An income statement provides information on an organisation's profitability at a certain point in time. 
B)  An income statement deducts liabilities from assets to determine shareholders' equity. 
C)  The expenses relate to cash payments. 
D)  For revenue to be included, it is not necessary for cash to have been received. 
A)  An income statement provides information on an organisation's profitability at a certain point in time. 
B)  An income statement deducts liabilities from assets to determine shareholders' equity. 
C)  The expenses relate to cash payments. 
D)  For revenue to be included, it is not necessary for cash to have been received.

Question 16

Which financial statement assumption relates to the procedure where a $200 paper shredder with a five-year useful life is treated as an expense?

Accepted Answer

A)  Monetary 
B)  Accounting period 
C)  Materiality 
D)  Historical cost 
A)  Monetary 
B)  Accounting period 
C)  Materiality 
D)  Historical cost

Question 17

Use the information given below at 30 June 2016 to answer the following question.
 
What is the balance of total assets at 30 June 2016?

Accepted Answer

A)  $400 000 
B)  $420 000 
C)  $580 000 
D)  None of the answers provided 
A)  $400 000 
B)  $420 000 
C)  $580 000 
D)  None of the answers provided

Question 18

Which type of information would be of most interest to shareholders?

Accepted Answer

A)  Profitability 
B)  Long-term financial stability 
C)  Pollution of waterways adjacent to the firm's factory 
D)  Continuity of orders for the firm's products 
A)  Profitability 
B)  Long-term financial stability 
C)  Pollution of waterways adjacent to the firm's factory 
D)  Continuity of orders for the firm's products

Question 19

Financial statements provide useful information for shareholders to:

Accepted Answer

A)  understand day-to-day activities. 
B)  decide whether to buy, sell or hold shares of companies. 
C)  decide whether to lend money to the business entity. 
D)  create business planning strategies. 
A)  understand day-to-day activities. 
B)  decide whether to buy, sell or hold shares of companies. 
C)  decide whether to lend money to the business entity. 
D)  create business planning strategies.

Question 20

Which of the following may be an asset of a business enterprise?

Accepted Answer

A)  Retained profits 
B)  Inventory 
C)  Provision for warranty repairs 
D)  Shareholders' equity 
A)  Retained profits 
B)  Inventory 
C)  Provision for warranty repairs 
D)  Shareholders' equity

Which of the following may be a liability of a business enterprise?

Use the information given below to answer the following question. What is the net profit for 2016?

Which of the following statements is NOT true?

Assets are initially recorded at cost. What assumption/concept underlies this procedure?

A company's assets are differentiated from the senior manager's. What assumption/concept underlies this procedure?

Mike's Mulching (MM) had the following assets and liabilities: Shareholders' equity would be:

LPR is a company that commenced business on 1 January 2016. Below are the balances in the 30 June 2016 financial statements. What is the net profit for the period ending 30 June 2016?

Financial performance means:

Use the information given below at 30 June 2016 to answer the following question. What is the balance of shareholder equity?

The Great Drink Company, in preparing its balance sheet, excludes the general manager's personal motor vehicle (not used in the business) because of which of the following accounting assumption?

A balance sheet:

During 2016, a company makes credit sales of $500 000, of which $375 000 is collected at year-end. It pays $200 000 in expenses and owes $25 000 for electricity used during 2016. What would the profit be if cash accounting rather than accrual accounting was used?

Which of the following statements about an income statement is NOT true?

Which type of information would be of least interest to employees?

Which of the following statements about an income statement is true?

Which financial statement assumption relates to the procedure where a $200 paper shredder with a five-year useful life is treated as an expense?

Use the information given below at 30 June 2016 to answer the following question. What is the balance of total assets at 30 June 2016?

Which type of information would be of most interest to shareholders?

Financial statements provide useful information for shareholders to:

Which of the following may be an asset of a business enterprise?

Measuring and Evaluating Financial Position and Financial Performance

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 1: Introduction to Financial Accounting

Which of the following may be a liability of a business enterprise?

Use the information given below to answer the following question. What is the net profit for 2016?

Which of the following statements is NOT true?

Assets are initially recorded at cost. What assumption/concept underlies this procedure?

A company's assets are differentiated from the senior manager's. What assumption/concept underlies this procedure?

Mike's Mulching (MM) had the following assets and liabilities: Shareholders' equity would be:

LPR is a company that commenced business on 1 January 2016. Below are the balances in the 30 June 2016 financial statements. What is the net profit for the period ending 30 June 2016?

Financial performance means:

Use the information given below at 30 June 2016 to answer the following question. What is the balance of shareholder equity?

The Great Drink Company, in preparing its balance sheet, excludes the general manager's personal motor vehicle (not used in the business) because of which of the following accounting assumption?

A balance sheet:

During 2016, a company makes credit sales of $500 000, of which $375 000 is collected at year-end. It pays $200 000 in expenses and owes $25 000 for electricity used during 2016. What would the profit be if cash accounting rather than accrual accounting was used?

Which of the following statements about an income statement is NOT true?

Which type of information would be of least interest to employees?

Which of the following statements about an income statement is true?

Which financial statement assumption relates to the procedure where a $200 paper shredder with a five-year useful life is treated as an expense?

Use the information given below at 30 June 2016 to answer the following question. What is the balance of total assets at 30 June 2016?

Which type of information would be of most interest to shareholders?

Financial statements provide useful information for shareholders to:

Which of the following may be an asset of a business enterprise?

Measuring and Evaluating Financial Position and Financial Performance

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