Question 1

Triple bottom line reporting

Accepted Answer

A)  reinforces profit as the primary objective of companies. 
B)  recognises the legal and non-legal obligations of a company to all stakeholders with a legitimate interest in the company. 
C)  is mandatory in Australia. 
D)  is where a result is produced for financial, social and environmental benefit. 
A)  reinforces profit as the primary objective of companies. 
B)  recognises the legal and non-legal obligations of a company to all stakeholders with a legitimate interest in the company. 
C)  is mandatory in Australia. 
D)  is where a result is produced for financial, social and environmental benefit. B

Question 2

Political costs create incentives for managers to select accounting policies that increase reported profits.

Accepted Answer

A) True 
 B)False  False

Question 3

In October 2002, Duke Power, the regulated electricity utility of the United States (US) corporation Duke Energy, agreed to pay $25 million to its customers to settle allegations by regulators in North and South Carolina that it had underreported net earnings by about $123 million between 1998 and 2002. The underreporting of net earnings by Duke Energy was allegedly undertaken in order to avoid having to cut its electricity rates.
Required:
Explain what is meant by the term 'economic consequences' and relate this to the underreporting of net earnings by Duke Energy.

Accepted Answer

Economic consequences: wealth effects, resulting from accounting policy choices, impacting, for example, managers, the firm, shareholders and/or debt holders.
Given Duke Energy's status as a regulated electricity utility, and the explanation for the underreporting, from an economic consequences perspective the entity's choice of accounting policies lies with political costs .
Further, ultimately if large companies attract lower political costs its managers will be rewarded.

Question 4

Which one of the following groups is not generally regarded as an external user of the accounting information of an entity?

Accepted Answer

A)  Employees 
B)  Customers 
C)  Management 
D)  Lenders 
A)  Employees 
B)  Customers 
C)  Management 
D)  Lenders

Question 5

Accounting is likely to involve:

Accepted Answer

A)  qualitative and financial information. 
B)  quantitative and financial information. 
C)  quantitative and non-financial information. 
D)  qualitative and non-financial information. 
A)  qualitative and financial information. 
B)  quantitative and financial information. 
C)  quantitative and non-financial information. 
D)  qualitative and non-financial information.

Question 6

The statement of comprehensive income is an example of a financial accounting report.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following reports are not reports specifically on sustainability issues?

Accepted Answer

A)  Sustainability report 
B)  Annual report 
C)  Triple bottom line report 
D)  Stakeholder impact report 
A)  Sustainability report 
B)  Annual report 
C)  Triple bottom line report 
D)  Stakeholder impact report

Question 8

Triple bottom line reporting confirms the maximisation of profit as the major objective of listed companies.

Accepted Answer

A) True 
 B)False

Question 9

Information contained in external financial reports can be useful to a firm's: Suppliers Employees

Accepted Answer

A)  No No 
B)  No Yes 
C)  Yes No 
D)  Yes Yes 
A)  No No 
B)  No Yes 
C)  Yes No 
D)  Yes Yes

Question 10

Which of the following would not be part of environmental reporting under the GRI 3?

Accepted Answer

A)  Greenhouse gas emissions 
B)  Amount of recycled paper 
C)  Child labour 
D)  Biodiversity management 
A)  Greenhouse gas emissions 
B)  Amount of recycled paper 
C)  Child labour 
D)  Biodiversity management

Question 11

Management has the responsibility of selecting accounting policies.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following would not form part of social reporting under the GRI 3?

Accepted Answer

A)  Number of female employees. 
B)  Number of Indigenous employees. 
C)  Donations to charities. 
D)  Greenhouse gas emissions. 
A)  Number of female employees. 
B)  Number of Indigenous employees. 
C)  Donations to charities. 
D)  Greenhouse gas emissions.

Question 13

The audit of a triple bottom line report is normally completed by the financial auditor.

Accepted Answer

A) True 
 B)False

Question 14

The GRI indicators are established by the committee without any input from stakeholders.

Accepted Answer

A) True 
 B)False

Question 15

The primary purpose of accounting is to:

Accepted Answer

A)  help people make decisions about economic activities. 
B)  provide information that management can use to convince shareholders that management deserves high salaries. 
C)  provide employment to persons who have a knack for dealing with numbers. 
D)  minimise the amount of profit that a firm has earned. 
A)  help people make decisions about economic activities. 
B)  provide information that management can use to convince shareholders that management deserves high salaries. 
C)  provide employment to persons who have a knack for dealing with numbers. 
D)  minimise the amount of profit that a firm has earned.

Question 16

An objective of accounting is to provide information to predict and evaluate the going concern of an entity.

Accepted Answer

A) True 
 B)False

Question 17

Match the type of accounting information to the term that best describes it. Information prepared for Information prepared for
External decision makers internal decision makers

Accepted Answer

A)  Financial accounting Financial accounting 
B)  Financial accounting Managerial accounting 
C)  Managerial accounting Financial accounting 
D)  Managerial accounting Managerial accounting 
A)  Financial accounting Financial accounting 
B)  Financial accounting Managerial accounting 
C)  Managerial accounting Financial accounting 
D)  Managerial accounting Managerial accounting

Question 18

The Global Reporting Initiative:

Accepted Answer

A)  refers to an institution based in Sweden. 
B)  is the most widely cited benchmark for the determination of the content of a triple bottom line report. 
C)  was established as a private, profit-making initiative. 
D)  is a set of reporting obligations agreed as part of the Kyoto agreement. 
A)  refers to an institution based in Sweden. 
B)  is the most widely cited benchmark for the determination of the content of a triple bottom line report. 
C)  was established as a private, profit-making initiative. 
D)  is a set of reporting obligations agreed as part of the Kyoto agreement.

Question 19

Financial accounting is the process of:

Accepted Answer

A)  preparing and reporting accounting information for external decision makers. 
B)  preparing and reporting accounting information for internal decision makers. 
C)  enacting generally accepted accounting principles. 
D)  preparing and reporting accounting information to lenders. 
A)  preparing and reporting accounting information for external decision makers. 
B)  preparing and reporting accounting information for internal decision makers. 
C)  enacting generally accepted accounting principles. 
D)  preparing and reporting accounting information to lenders.

Question 20

The selection of appropriate accounting policies for a company is the responsibility of:

Accepted Answer

A)  the body that sets Accounting Standards. 
B)  the company secretary. 
C)  the internal auditors of the company. 
D)  the management of the company. 
A)  the body that sets Accounting Standards. 
B)  the company secretary. 
C)  the internal auditors of the company. 
D)  the management of the company.

Triple bottom line reporting

Political costs create incentives for managers to select accounting policies that increase reported profits.

Which one of the following groups is not generally regarded as an external user of the accounting information of an entity?

Accounting is likely to involve:

The statement of comprehensive income is an example of a financial accounting report.

Which of the following reports are not reports specifically on sustainability issues?

Triple bottom line reporting confirms the maximisation of profit as the major objective of listed companies.

Information contained in external financial reports can be useful to a firm's: Suppliers Employees

Which of the following would not be part of environmental reporting under the GRI 3?

Management has the responsibility of selecting accounting policies.

Which of the following would not form part of social reporting under the GRI 3?

The audit of a triple bottom line report is normally completed by the financial auditor.

The GRI indicators are established by the committee without any input from stakeholders.

The primary purpose of accounting is to:

An objective of accounting is to provide information to predict and evaluate the going concern of an entity.

Match the type of accounting information to the term that best describes it. Information prepared for Information prepared for External decision makers internal decision makers

The Global Reporting Initiative:

Financial accounting is the process of:

The selection of appropriate accounting policies for a company is the responsibility of:

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 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 1: Introduction to Accounting

Triple bottom line reporting

Political costs create incentives for managers to select accounting policies that increase reported profits.

Which one of the following groups is not generally regarded as an external user of the accounting information of an entity?

Accounting is likely to involve:

The statement of comprehensive income is an example of a financial accounting report.

Which of the following reports are not reports specifically on sustainability issues?

Triple bottom line reporting confirms the maximisation of profit as the major objective of listed companies.

Information contained in external financial reports can be useful to a firm's: Suppliers Employees

Which of the following would not be part of environmental reporting under the GRI 3?

Management has the responsibility of selecting accounting policies.

Which of the following would not form part of social reporting under the GRI 3?

The audit of a triple bottom line report is normally completed by the financial auditor.

The GRI indicators are established by the committee without any input from stakeholders.

The primary purpose of accounting is to:

An objective of accounting is to provide information to predict and evaluate the going concern of an entity.

Match the type of accounting information to the term that best describes it. Information prepared for Information prepared for External decision makers internal decision makers

The Global Reporting Initiative:

Financial accounting is the process of:

The selection of appropriate accounting policies for a company is the responsibility of:

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 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