Question 1

A prepayment consumed during a period is:

Accepted Answer

A)  an item that is an expense of a given period but not necessarily a cash payment for that period. 
B)  an item that may be a cash payment for that period and also an expense for that period. 
C)  an item that that may be expensed in the current period. 
D)  any of the above. 
A)  an item that is an expense of a given period but not necessarily a cash payment for that period. 
B)  an item that may be a cash payment for that period and also an expense for that period. 
C)  an item that that may be expensed in the current period. 
D)  any of the above.

Question 2

The 'Get Out There' Tour Company had equity of $60 000 at the beginning of the year. After a successful tourist season, dividends of $50 000 were paid and equity at the end of the year was $185 000. The profit for the year was:

Accepted Answer

A)  $125 000 
B)  $175 000 
C)  $185 000 
D)  $235 000 
A)  $125 000 
B)  $175 000 
C)  $185 000 
D)  $235 000

Question 3

The statement of comprehensive income reports revenues and expenses for the period but does not report income.

Accepted Answer

A) True 
 B)False

Question 4

Ian bought some goods in May for $600 and sold them in the following August for $950. For the financial year ending on 30 June, which of the following statements is correct?

Accepted Answer

A)  Ian has expenses amounting to $600. 
B)  Ian has revenues amounting to $950. 
C)  Ian has a profit of $350. 
D)  Ian has assets of $600. 
A)  Ian has expenses amounting to $600. 
B)  Ian has revenues amounting to $950. 
C)  Ian has a profit of $350. 
D)  Ian has assets of $600.

Question 5

In relation to income, revenue and expenses, which of the following statements is incorrect?

Accepted Answer

A)  Revenue is the inflows from ordinary activities while income is revenue plus all gains. 
B)  The difference between revenue and cost of goods sold (i.e. cost of sales) is referred to as gross profit (loss). 
C)  Income and expenses do not impact the equation Assets = Liabilities + Owners' Equity. 
D)  Income increases equity while expenses decrease it. 
A)  Revenue is the inflows from ordinary activities while income is revenue plus all gains. 
B)  The difference between revenue and cost of goods sold (i.e. cost of sales) is referred to as gross profit (loss). 
C)  Income and expenses do not impact the equation Assets = Liabilities + Owners' Equity. 
D)  Income increases equity while expenses decrease it.

Question 6

Which of the following transactions for July represents revenue for the month?

Accepted Answer

A)  Collected $1000 in advance for architectural services to be provided in August. 
B)  Completed architectural services for $30 000, payable in seven days. 
C)  Borrowed $60 000 from the bank, repayable over two years. 
D)  Collected cash of $5000 from an account receivable outstanding since February. 
A)  Collected $1000 in advance for architectural services to be provided in August. 
B)  Completed architectural services for $30 000, payable in seven days. 
C)  Borrowed $60 000 from the bank, repayable over two years. 
D)  Collected cash of $5000 from an account receivable outstanding since February.

Question 7

Chamber's Tube & Rim Company reported Retained Profits of $20 000 at the end of the year. The accompanying statement of comprehensive income for the year ending 31 December reported $10 000 in income and $20 000 in expenses. The balance of Retained Profits at the beginning of the year must have been:

Accepted Answer

A)  $50 000. 
B)  $40 000. 
C)  $30 000. 
D)  $20 000. 
A)  $50 000. 
B)  $40 000. 
C)  $30 000. 
D)  $20 000.

Question 8

Where the expenses of an entity exceed income for a period, a loss results.

Accepted Answer

A) True 
 B)False

Question 9

Revenues indicate:

Accepted Answer

A)  the sales price of goods and services sold during a period. 
B)  how much cash was received from sales during a period. 
C)  the cost of resources consumed in producing and selling goods and services sold during a period. 
D)  the net profit earned during a period. 
A)  the sales price of goods and services sold during a period. 
B)  how much cash was received from sales during a period. 
C)  the cost of resources consumed in producing and selling goods and services sold during a period. 
D)  the net profit earned during a period.

Question 10

The essential difference between an asset and an expense revolves around whether the economic benefits involved lie in the future or the past.

Accepted Answer

A) True 
 B)False

Question 11

The statement of changes in equity includes transactions with owners.

Accepted Answer

A) True 
 B)False

Question 12

The statement of comprehensive income shows the results of operations over a period of time, and the balance sheet shows the financial condition of a business at a specific date.

Accepted Answer

A) True 
 B)False

Question 13

Jeremy received $50 as a gift and $120 from his a job as a waiter. He then spent $15 on a silver ring. What is Jeremy's revenue?

Accepted Answer

A)  $50 
B)  $120 
C)  $170 
D)  $155 
A)  $50 
B)  $120 
C)  $170 
D)  $155

Question 14

Which of the following pairs of items would normally be classified as expenses?

Accepted Answer

A)  Ordinary dividends and salaries paid 
B)  Salaries paid and interest paid on loans 
C)  Discount received and interest paid on loans 
D)  Amortisation of goodwill and loan payable 
A)  Ordinary dividends and salaries paid 
B)  Salaries paid and interest paid on loans 
C)  Discount received and interest paid on loans 
D)  Amortisation of goodwill and loan payable

Question 15

On 1 January, Erin, a manufacturer of fine furniture, entered into an agreement with a customer to make a chair that was to be made to meet the unique specifications of the customer. The customer paid a $20 deposit on the chair at that date. Erin finished making the chair on 31 January. The customer took delivery on that day, and agreed to pay Erin the outstanding balance of $3860 in two instalments on 28 February and 31 March. When would Erin normally recognise the revenue as having been earned, from a historical cost accounting perspective?

Accepted Answer

A)  1 January 
B)  31 January 
C)  28 February 
D)  31 March 
A)  1 January 
B)  31 January 
C)  28 February 
D)  31 March

Question 16

Earnings management enhances the decision usefulness of financial reporting.

Accepted Answer

A) True 
 B)False

Question 17

The following balances were taken from the accounting records of Singapore Enterprises Ltd as at 31 December.

Accepted Answer

(a)
Singapore Enterprises Ltd

Question 18

Profitability means having enough funds on hand to pay debts as they fall due.

Accepted Answer

A) True 
 B)False

Question 19

Physicians, Inc. subscribes to three magazines and paid $140, $90 and $76 respectively, on 1 July. The subscriptions are for one year and are recorded in Prepaid Subscriptions when paid. Six months later on 31 December, what amount is recorded for 'magazine expense' and what is the balance of the Prepaid Subscription account? Magazine Expense Prepaid Subscriptions

Accepted Answer

A)  $153 $153 
B)  $306 $306 
C)  $25.50 $153 
D)  $25.50 $306 
A)  $153 $153 
B)  $306 $306 
C)  $25.50 $153 
D)  $25.50 $306

Question 20

Jeremy received $50 as a gift and $120 from his a job as a waiter. He then spent $15 on a silver ring. What is Jeremy's income?

Accepted Answer

A)  $50 
B)  $120 
C)  $170 
D)  $155 
A)  $50 
B)  $120 
C)  $170 
D)  $155

A prepayment consumed during a period is:

The 'Get Out There' Tour Company had equity of $60 000 at the beginning of the year. After a successful tourist season, dividends of $50 000 were paid and equity at the end of the year was $185 000. The profit for the year was:

The statement of comprehensive income reports revenues and expenses for the period but does not report income.

Ian bought some goods in May for $600 and sold them in the following August for $950. For the financial year ending on 30 June, which of the following statements is correct?

In relation to income, revenue and expenses, which of the following statements is incorrect?

Which of the following transactions for July represents revenue for the month?

Where the expenses of an entity exceed income for a period, a loss results.

Revenues indicate:

The essential difference between an asset and an expense revolves around whether the economic benefits involved lie in the future or the past.

The statement of changes in equity includes transactions with owners.

The statement of comprehensive income shows the results of operations over a period of time, and the balance sheet shows the financial condition of a business at a specific date.

Jeremy received $50 as a gift and $120 from his a job as a waiter. He then spent $15 on a silver ring. What is Jeremy's revenue?

Which of the following pairs of items would normally be classified as expenses?

Earnings management enhances the decision usefulness of financial reporting.

The following balances were taken from the accounting records of Singapore Enterprises Ltd as at 31 December.

Profitability means having enough funds on hand to pay debts as they fall due.

Jeremy received $50 as a gift and $120 from his a job as a waiter. He then spent $15 on a silver ring. What is Jeremy's income?

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Cash Flows

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters

Exam 6: Presentation of Financial Performance and the Worksheet

A prepayment consumed during a period is:

The 'Get Out There' Tour Company had equity of $60 000 at the beginning of the year. After a successful tourist season, dividends of $50 000 were paid and equity at the end of the year was $185 000. The profit for the year was:

The statement of comprehensive income reports revenues and expenses for the period but does not report income.

Ian bought some goods in May for $600 and sold them in the following August for $950. For the financial year ending on 30 June, which of the following statements is correct?

In relation to income, revenue and expenses, which of the following statements is incorrect?

Which of the following transactions for July represents revenue for the month?

Where the expenses of an entity exceed income for a period, a loss results.

Revenues indicate:

The essential difference between an asset and an expense revolves around whether the economic benefits involved lie in the future or the past.

The statement of changes in equity includes transactions with owners.

The statement of comprehensive income shows the results of operations over a period of time, and the balance sheet shows the financial condition of a business at a specific date.

Jeremy received $50 as a gift and $120 from his a job as a waiter. He then spent $15 on a silver ring. What is Jeremy's revenue?

Which of the following pairs of items would normally be classified as expenses?

Earnings management enhances the decision usefulness of financial reporting.

The following balances were taken from the accounting records of Singapore Enterprises Ltd as at 31 December.

Profitability means having enough funds on hand to pay debts as they fall due.

Jeremy received $50 as a gift and $120 from his a job as a waiter. He then spent $15 on a silver ring. What is Jeremy's income?

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Cash Flows

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters