Question 1

A cost ought to be recognised as an asset when:

Accepted Answer

A)  it is probable that it will provide future economic benefits. 
B)  it may provide future economic benefits. 
C)  it involves drawings by the owner. 
D)  the cash has been paid. 
A)  it is probable that it will provide future economic benefits. 
B)  it may provide future economic benefits. 
C)  it involves drawings by the owner. 
D)  the cash has been paid.

Question 2

Capitalising a cost for the period instead of recording it as an expense of the period will understate profit for the period.

Accepted Answer

A) True 
 B)False

Question 3

The statement of comprehensive income shows financial information:

Accepted Answer

A)  at a point in time. 
B)  over a period of time. 
C)  at the time of the originating transaction. 
D)  at the time of sale of an item. 
A)  at a point in time. 
B)  over a period of time. 
C)  at the time of the originating transaction. 
D)  at the time of sale of an item.

Question 4

Merchandise inventory costing $10 000 was sold to customers on credit for $15 000. What amount of revenue and cash flow resulted from the sale of the inventory? RevenueCash Flow

Accepted Answer

A)  $5000 $15 000 
B)  $10 000 $10 000 
C)  $15 000 $0 
D)  $5000$0 
A)  $5000 $15 000 
B)  $10 000 $10 000 
C)  $15 000 $0 
D)  $5000$0

Question 5

Which of the following would not result in the recording of an expense?

Accepted Answer

A)  Receipt of a bill from the telephone company 
B)  Recording of wages paid to managers 
C)  Drawings by the owner for personal expenses 
D)  Receipt of a bill for electricity used 
A)  Receipt of a bill from the telephone company 
B)  Recording of wages paid to managers 
C)  Drawings by the owner for personal expenses 
D)  Receipt of a bill for electricity used

Question 6

Determine the profit earned by a business owner for the month ending 31 May who recorded the following transactions during May:

Accepted Answer

A)  $1500 
B)  $1300 
C)  $1200 
D)  $5000 
A)  $1500 
B)  $1300 
C)  $1200 
D)  $5000

Question 7

The core business of Greenmango Ltd involves the sale of anti-virus software. The following took place during the financial year ended 30 June. The company earned $25 000 000 from the sale of software; $3 000 000 from update downloads; and $50 000 in interest from investing on the short-term money market. The company also received a $2000 discount arising out of the early settlement of a liability; and issued shares in exchange for $500 000 cash during the year.

Accepted Answer

The answer of The core business of Greenmango Ltd involves...

Question 8

Income has the effect of increasing assets and increasing owners' equity.

Accepted Answer

A) True 
 B)False

Question 9

Revenue has the effect of:

Accepted Answer

A)  increasing assets and decreasing liabilities. 
B)  increasing assets and owners' equity. 
C)  increasing assets and decreasing owners' equity. 
D)  leaving the entire balance sheet unchanged. 
A)  increasing assets and decreasing liabilities. 
B)  increasing assets and owners' equity. 
C)  increasing assets and decreasing owners' equity. 
D)  leaving the entire balance sheet unchanged.

Question 10

Company XYZ recorded net profit after tax of $150m for the period. In addition it recognised the following changes in fair values for the period: Available-for-sale securities + $10 million
Cash flow hedges - $5 million
Land + $85 million
What would be the amount of total comprehensive income for the period?

Accepted Answer

A)  $90 million 
B)  $95 million 
C)  $150 million 
D)  $240 million 
A)  $90 million 
B)  $95 million 
C)  $150 million 
D)  $240 million

Question 11

An essential characteristic of an expense is a decrease in economic benefits.

Accepted Answer

A) True 
 B)False

Question 12

A drawing by an owner has the effect of:

Accepted Answer

A)  increasing assets and decreasing owners' equity. 
B)  decreasing assets and owners' equity. 
C)  decreasing assets and increasing owners' equity. 
D)  leaving the entire balance sheet unchanged. 
A)  increasing assets and decreasing owners' equity. 
B)  decreasing assets and owners' equity. 
C)  decreasing assets and increasing owners' equity. 
D)  leaving the entire balance sheet unchanged.

Question 13

An expense is a decrease in assets or an increase in liabilities, and will result in a decrease in owners' equity.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an essential characteristic of an expense?

Accepted Answer

A)  Decreases in future economic benefits 
B)  Contribution to owners 
C)  Increases in assets or reduction in liabilities 
D)  Increase in future economic benefits 
A)  Decreases in future economic benefits 
B)  Contribution to owners 
C)  Increases in assets or reduction in liabilities 
D)  Increase in future economic benefits

A cost ought to be recognised as an asset when:

Capitalising a cost for the period instead of recording it as an expense of the period will understate profit for the period.

The statement of comprehensive income shows financial information:

Merchandise inventory costing $10 000 was sold to customers on credit for $15 000. What amount of revenue and cash flow resulted from the sale of the inventory? RevenueCash Flow

Which of the following would not result in the recording of an expense?

Determine the profit earned by a business owner for the month ending 31 May who recorded the following transactions during May:

Income has the effect of increasing assets and increasing owners' equity.

Revenue has the effect of:

An essential characteristic of an expense is a decrease in economic benefits.

A drawing by an owner has the effect of:

An expense is a decrease in assets or an increase in liabilities, and will result in a decrease in owners' equity.

Which of the following is an essential characteristic of an expense?

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 cost ought to be recognised as an asset when:

Capitalising a cost for the period instead of recording it as an expense of the period will understate profit for the period.

The statement of comprehensive income shows financial information:

Merchandise inventory costing $10 000 was sold to customers on credit for $15 000. What amount of revenue and cash flow resulted from the sale of the inventory? RevenueCash Flow

Which of the following would not result in the recording of an expense?

Determine the profit earned by a business owner for the month ending 31 May who recorded the following transactions during May:

Income has the effect of increasing assets and increasing owners' equity.

Revenue has the effect of:

An essential characteristic of an expense is a decrease in economic benefits.

A drawing by an owner has the effect of:

An expense is a decrease in assets or an increase in liabilities, and will result in a decrease in owners' equity.

Which of the following is an essential characteristic of an expense?

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