Question 1

The partnership form of business organisation exists where two or more carry on a business in common with a view to profit.

Accepted Answer

A) True 
 B)False

Question 2

The primary role of an auditor is to:

Accepted Answer

A)  review accounting systems and internal controls. 
B)  detect fraud. 
C)  ensure that every transaction is correct. 
D)  ensure that there is no fraud and that all transactions are correct. 
A)  review accounting systems and internal controls. 
B)  detect fraud. 
C)  ensure that every transaction is correct. 
D)  ensure that there is no fraud and that all transactions are correct.

Question 3

Due process involves:

Accepted Answer

A)  the opportunity for interested parties to comment on the draft of a proposed accounting standard. 
B)  the selection and discussion of emerging issues of accounting. 
C)  a process of fast-tracking the implementation of accounting standards. 
D)  adequate consultation between the FRC and the AASB before an accounting standard is issued. 
A)  the opportunity for interested parties to comment on the draft of a proposed accounting standard. 
B)  the selection and discussion of emerging issues of accounting. 
C)  a process of fast-tracking the implementation of accounting standards. 
D)  adequate consultation between the FRC and the AASB before an accounting standard is issued.

Question 4

Explain what is meant by the term limited liability as it relates to the shareholders of a corporation; and explain why shareholders are able to gain the benefit of limited liability whereas sole traders cannot.

Accepted Answer

The limited liability of shareholders re

Question 5

Which of the following is true of companies? All companies:

Accepted Answer

A)  are limited liability companies. 
B)  are separate legal entities. 
C)  have a limited life. 
D)  are bound by the contracts signed by shareholders. 
A)  are limited liability companies. 
B)  are separate legal entities. 
C)  have a limited life. 
D)  are bound by the contracts signed by shareholders.

Question 6

Which of the following accounts is a liability?

Accepted Answer

A)  Interest Expense 
B)  Interest Payable 
C)  Interest Revenue 
D)  Interest Receivable 
A)  Interest Expense 
B)  Interest Payable 
C)  Interest Revenue 
D)  Interest Receivable

Question 7

The Australian Financial Reporting Council is not able to directly influence the content of the AASB's accounting standards, but has the capacity to do so given its control of the budget and priorities of the AASB.

Accepted Answer

A) True 
 B)False

Question 8

An asset must have physical qualities that can be measured reliably.

Accepted Answer

A) True 
 B)False

Question 9

Describe four objectives of a conceptual framework.

Accepted Answer

Four objec

Question 10

Jack and Jill Repairers is founded by partners Jack, Jill and Jolly. Jack, Jill and Jolly contributed $3000, $5000 and $8000 respectively. For the year ending 31 December, Jack and Jill Repairers produced a profit of $12 000. If the profits are distributed in accordance with the initial investment which of the following is true?

Accepted Answer

A)  Jack gets $2250 and Jill gets $6000. 
B)  Jack gets $3750 and Jolly gets $6000. 
C)  Jack gets $2250 and Jill gets $3750. 
D)  Jack gets $2250 and Jolly gets $8000. 
A)  Jack gets $2250 and Jill gets $6000. 
B)  Jack gets $3750 and Jolly gets $6000. 
C)  Jack gets $2250 and Jill gets $3750. 
D)  Jack gets $2250 and Jolly gets $8000.

Question 11

The present obligation to make a future sacrifice that is an essential criteria of the definition of a liability under the IASB Conceptual Framework:

Accepted Answer

A)  can only arise from legal obligations. 
B)  may arise out of moral or constructive obligations. 
C)  meets the definition of an expense. 
D)  may vary in different countries. 
A)  can only arise from legal obligations. 
B)  may arise out of moral or constructive obligations. 
C)  meets the definition of an expense. 
D)  may vary in different countries.

Question 12

In terms of the conceptual framework, an asset is recognised on a balance sheet if it:

Accepted Answer

A)  is capable of reliable measurement and it is probable that the asset will be realised. 
B)  is owned by the entity and is capable of reliable measurement. 
C)  results from a past event and is owned by the entity. 
D)  provides future economic benefits. 
A)  is capable of reliable measurement and it is probable that the asset will be realised. 
B)  is owned by the entity and is capable of reliable measurement. 
C)  results from a past event and is owned by the entity. 
D)  provides future economic benefits.

Question 13

Gamma Pty Ltd would be a small proprietary company as its records show:

Accepted Answer

A)  assets of $15m, sales of $26m and 40 employees. 
B)  assets of $6m, sales of $26m and 60 employees. 
C)  assets of $15m, sales of $9m and 55 employees. 
D)  assets of $4.5m, sales of $12m and 45 employees. 
A)  assets of $15m, sales of $26m and 40 employees. 
B)  assets of $6m, sales of $26m and 60 employees. 
C)  assets of $15m, sales of $9m and 55 employees. 
D)  assets of $4.5m, sales of $12m and 45 employees.

Question 14

FeelGood Limited has been set up specifically for the building of an inner-city women's refuge. When the building has been erected and becomes operational (estimated time four months), the company will be liquidated. Which basic assumption underlying the preparation of general-purpose financial reports will not apply in preparing the reports for FeelGood Limited?

Accepted Answer

A)  The business entity principle. 
B)  The principle of duality. 
C)  The going-concern principle. 
D)  The period assumption. 
A)  The business entity principle. 
B)  The principle of duality. 
C)  The going-concern principle. 
D)  The period assumption.

Question 15

An example of a reporting entity is likely to be a:

Accepted Answer

A)  public company. 
B)  partnership. 
C)  family trust. 
D)  small proprietary company. 
A)  public company. 
B)  partnership. 
C)  family trust. 
D)  small proprietary company.

Question 16

Accrual accounting refers to the method of measuring profit on the basis of cash flow, rather than when revenues and expenses occur.

Accepted Answer

A) True 
 B)False

Question 17

Objectives of a conceptual framework include:

Accepted Answer

A)  providing a defence against lobby groups. 
B)  fewer and more consistent Accounting Standards. 
C)  improved communication. 
D)  all of the above. 
A)  providing a defence against lobby groups. 
B)  fewer and more consistent Accounting Standards. 
C)  improved communication. 
D)  all of the above.

Question 18

An external auditor seeks to provide reasonable assurance that the financial statements of a company are true and fair, not a guarantee that every error in the financial statements of the entity has been detected.

Accepted Answer

A) True 
 B)False

Question 19

Vanessa raised a $15 000 000 loan to fund the exploration that led to the discovery of the deposit of silver. Discuss whether the loan meets the definition and recognition criteria of a liability to Vanessa during the term of the loan, according to provisions of the IASB Conceptual; Framework.

Accepted Answer

The $15 000 000 loan clearly meets the d

Question 20

Accounting Standards set by the Australian Accounting Standards Board (AASB) apply to both the private and public sectors in Australia.

Accepted Answer

A) True 
 B)False

The partnership form of business organisation exists where two or more carry on a business in common with a view to profit.

The primary role of an auditor is to:

Due process involves:

Explain what is meant by the term limited liability as it relates to the shareholders of a corporation; and explain why shareholders are able to gain the benefit of limited liability whereas sole traders cannot.

Which of the following is true of companies? All companies:

Which of the following accounts is a liability?

The Australian Financial Reporting Council is not able to directly influence the content of the AASB's accounting standards, but has the capacity to do so given its control of the budget and priorities of the AASB.

An asset must have physical qualities that can be measured reliably.

Describe four objectives of a conceptual framework.

The present obligation to make a future sacrifice that is an essential criteria of the definition of a liability under the IASB Conceptual Framework:

In terms of the conceptual framework, an asset is recognised on a balance sheet if it:

Gamma Pty Ltd would be a small proprietary company as its records show:

An example of a reporting entity is likely to be a:

Accrual accounting refers to the method of measuring profit on the basis of cash flow, rather than when revenues and expenses occur.

Objectives of a conceptual framework include:

An external auditor seeks to provide reasonable assurance that the financial statements of a company are true and fair, not a guarantee that every error in the financial statements of the entity has been detected.

Vanessa raised a $15 000 000 loan to fund the exploration that led to the discovery of the deposit of silver. Discuss whether the loan meets the definition and recognition criteria of a liability to Vanessa during the term of the loan, according to provisions of the IASB Conceptual; Framework.

Accounting Standards set by the Australian Accounting Standards Board (AASB) apply to both the private and public sectors in Australia.

Introduction to Accounting

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance 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 2: Types of Organisations and the Financial Reporting Framework

The partnership form of business organisation exists where two or more carry on a business in common with a view to profit.

The primary role of an auditor is to:

Due process involves:

Explain what is meant by the term limited liability as it relates to the shareholders of a corporation; and explain why shareholders are able to gain the benefit of limited liability whereas sole traders cannot.

Which of the following is true of companies? All companies:

Which of the following accounts is a liability?

The Australian Financial Reporting Council is not able to directly influence the content of the AASB's accounting standards, but has the capacity to do so given its control of the budget and priorities of the AASB.

An asset must have physical qualities that can be measured reliably.

Describe four objectives of a conceptual framework.

The present obligation to make a future sacrifice that is an essential criteria of the definition of a liability under the IASB Conceptual Framework:

In terms of the conceptual framework, an asset is recognised on a balance sheet if it:

Gamma Pty Ltd would be a small proprietary company as its records show:

An example of a reporting entity is likely to be a:

Accrual accounting refers to the method of measuring profit on the basis of cash flow, rather than when revenues and expenses occur.

Objectives of a conceptual framework include:

An external auditor seeks to provide reasonable assurance that the financial statements of a company are true and fair, not a guarantee that every error in the financial statements of the entity has been detected.

Vanessa raised a $15 000 000 loan to fund the exploration that led to the discovery of the deposit of silver. Discuss whether the loan meets the definition and recognition criteria of a liability to Vanessa during the term of the loan, according to provisions of the IASB Conceptual; Framework.

Accounting Standards set by the Australian Accounting Standards Board (AASB) apply to both the private and public sectors in Australia.

Introduction to Accounting

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance 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