Question 1

Which of the following is NOT an expense of a company?

Accepted Answer

A)  Cost of goods sold 
B)  Dividends paid to shareholders 
C)  Interest for the period 
D)  Depreciation on factory 
A)  Cost of goods sold 
B)  Dividends paid to shareholders 
C)  Interest for the period 
D)  Depreciation on factory B

Question 2

Which of the following questions CANNOT be answered from a balance sheet?

Accepted Answer

A)  What has caused the changes in cash held during the period? 
B)  Is the company soundly financed? 
C)  Can the company pay its bills on time? 
D)  Should a dividend be declared? 
A)  What has caused the changes in cash held during the period? 
B)  Is the company soundly financed? 
C)  Can the company pay its bills on time? 
D)  Should a dividend be declared? A

Question 3

Which of the following is NOT a revenue of a company?

Accepted Answer

A)  Cash sales 
B)  Dividends received on shares 
C)  Rent from premises 
D)  Issue of shares 
A)  Cash sales 
B)  Dividends received on shares 
C)  Rent from premises 
D)  Issue of shares D

Question 4

Which of the following is NOT an expense of a company?

Accepted Answer

A)  Cost of goods sold 
B)  Repayment of principal on a loan 
C)  Payment of interest on a loan 
D)  Sales commission 
A)  Cost of goods sold 
B)  Repayment of principal on a loan 
C)  Payment of interest on a loan 
D)  Sales commission

Question 5

Which of the following CANNOT be classified as a current liability?

Accepted Answer

A)  Wages payable 
B)  Provision for employee entitlements 
C)  Loans 
D)  Inventory 
A)  Wages payable 
B)  Provision for employee entitlements 
C)  Loans 
D)  Inventory

Question 6

If the last wages bill for the year is paid on 28 June and $8 000 is owing at 30 June in unpaid wages, then:

Accepted Answer

A)  the $8 000 would appear as accrued wages payable in the balance sheet but it would not be included in the expenses for the year. 
B)  the $8 000 would appear as accrued wages payable in the balance sheet and would be included in the expenses for the year. 
C)  the $8 000 would not be included in either the balance sheet or the profit and loss statement. 
D)  the $8 000 would appear as an expense in the profit and loss statement. 
A)  the $8 000 would appear as accrued wages payable in the balance sheet but it would not be included in the expenses for the year. 
B)  the $8 000 would appear as accrued wages payable in the balance sheet and would be included in the expenses for the year. 
C)  the $8 000 would not be included in either the balance sheet or the profit and loss statement. 
D)  the $8 000 would appear as an expense in the profit and loss statement.

Question 7

Which of the following is NOT a revenue of a company?

Accepted Answer

A)  Cash sales 
B)  Credit sales 
C)  Rent received 
D)  Borrowing from a bank 
A)  Cash sales 
B)  Credit sales 
C)  Rent received 
D)  Borrowing from a bank

Question 8

During the year, Grasso Ltd sold 2000 items at $30 each. The cost price of the items was $22 each. Operating expenses totalled $7 000 and income tax expense was $5 000. What was the gross profit of Grasso Ltd for the year?

Accepted Answer

A)  $9 000 
B)  $16 000 
C)  $49 000 
D)  None of the above 
A)  $9 000 
B)  $16 000 
C)  $49 000 
D)  None of the above

Question 9

Which of the following is an expense?

Accepted Answer

A)  Prepaid rent 
B)  Dividends paid 
C)  Purchase of equipment 
D)  Wages owing but not paid at the end of the accounting period 
A)  Prepaid rent 
B)  Dividends paid 
C)  Purchase of equipment 
D)  Wages owing but not paid at the end of the accounting period

Question 10

During the year ended 30 June 2019, March Ltd earned revenues of $1 200 and incurred expenses of $800. Retained profits at 1 July 2018 were $700, and at 30 June 2019, $850. What was the dividend declared by March Ltd during the year?

Accepted Answer

A)  $150 
B)  $250 
C)  $550 
D)  None of the above 
A)  $150 
B)  $250 
C)  $550 
D)  None of the above

Question 11

What is total revenue for the period in which the following occurs?

Accepted Answer

A)  $30 000 
B)  $100 000 
C)  $110 000 
D)  $115 000 
A)  $30 000 
B)  $100 000 
C)  $110 000 
D)  $115 000

Question 12

Which of the following statements about assets is NOT true?

Accepted Answer

A)  Assets provide future economic benefits. 
B)  Assets are controlled by an organisation. 
C)  Assets result from past transactions or other events. 
D)  Assets are recorded at the amount they can be sold for. 
A)  Assets provide future economic benefits. 
B)  Assets are controlled by an organisation. 
C)  Assets result from past transactions or other events. 
D)  Assets are recorded at the amount they can be sold for.

Question 13

Use the information given below (as at 30 June 2019) to answer the following question.   Assume no dividends were declared during the year. If the balance of retained profits at the start of the year was $50 000, what was the profit for the year?

Accepted Answer

A)  $30 000 
B)  $50 000 
C)  $80 000 
D)  None of the above 
A)  $30 000 
B)  $50 000 
C)  $80 000 
D)  None of the above

Question 14

Gross profit is the difference between:

Accepted Answer

A)  sales revenue and operating expenses. 
B)  sales revenue and cost of goods sold. 
C)  operating profit before tax and income tax expense. 
D)  sales and sales returns. 
A)  sales revenue and operating expenses. 
B)  sales revenue and cost of goods sold. 
C)  operating profit before tax and income tax expense. 
D)  sales and sales returns.

Question 15

If a company pays a 12-month insurance premium for $2 400 on 1 May 2019, then at 30 June 2019 the accounts will show:

Accepted Answer

A)  a prepayment of $2 000 in the balance sheet and an insurance expense of $400 in the profit and loss account. 
B)  a prepayment of $400 in the balance sheet and an insurance expense of $2 000 in the profit and loss account. 
C)  a $2 400 asset in the balance sheet. 
D)  a $2 400 expense in the profit and loss statement. 
A)  a prepayment of $2 000 in the balance sheet and an insurance expense of $400 in the profit and loss account. 
B)  a prepayment of $400 in the balance sheet and an insurance expense of $2 000 in the profit and loss account. 
C)  a $2 400 asset in the balance sheet. 
D)  a $2 400 expense in the profit and loss statement.

Question 16

Given only the following information, calculate net profit.

Accepted Answer

A)  $90 000 
B)  $100 000 
C)  $110 000 
D)  $140 000 
A)  $90 000 
B)  $100 000 
C)  $110 000 
D)  $140 000

Question 17

Wages of $40 000 were paid in June for work done in June; $5 000 of wages were owed at end of June for work done in June; and an invoice for $8 000 was received for June advertising to be paid in July. What are total expenses for June 2019?

Accepted Answer

A)  $40 000 
B)  $45 000 
C)  $53 000 
D)  $40 000. 
A)  $40 000 
B)  $45 000 
C)  $53 000 
D)  $40 000.

Question 18

During 2019, Beta Ltd incurred expenses of $30 000 and earned a net profit of $5 000. Retained profits at 1 January 2019 stood at $7 000 and dividends declared and paid totalled $3 000. What was the balance of Beta Ltd's retained profits at 31 December 2019?

Accepted Answer

A)  $3 000 
B)  $5 000 
C)  $9 000 
D)  $15 000 
A)  $3 000 
B)  $5 000 
C)  $9 000 
D)  $15 000

Question 19

To which balance sheet grouping does the item 'accounts receivable' normally belong?

Accepted Answer

A)  Current asset 
B)  Noncurrent asset 
C)  Current liability 
D)  Noncurrent liability 
A)  Current asset 
B)  Noncurrent asset 
C)  Current liability 
D)  Noncurrent liability

Question 20

Which of the following statements is TRUE?

Accepted Answer

A)  If the liabilities owed by a business total $650 000, then the assets also total $650 000. 
B)  If the assets owned by a business total $500 000, then shareholders' equity also totals $500 000. 
C)  If the assets owned by a business total $190 000 and liabilities total $50 000, then shareholders' equity totals $140 000. 
D)  If the assets owned by a business total $90 000 and liabilities total $50 000, then shareholders' equity totals $140 000. 
A)  If the liabilities owed by a business total $650 000, then the assets also total $650 000. 
B)  If the assets owned by a business total $500 000, then shareholders' equity also totals $500 000. 
C)  If the assets owned by a business total $190 000 and liabilities total $50 000, then shareholders' equity totals $140 000. 
D)  If the assets owned by a business total $90 000 and liabilities total $50 000, then shareholders' equity totals $140 000.

Which of the following is NOT an expense of a company?

Which of the following questions CANNOT be answered from a balance sheet?

Which of the following is NOT a revenue of a company?

Which of the following is NOT an expense of a company?

Which of the following CANNOT be classified as a current liability?

If the last wages bill for the year is paid on 28 June and $8 000 is owing at 30 June in unpaid wages, then:

Which of the following is NOT a revenue of a company?

During the year, Grasso Ltd sold 2000 items at $30 each. The cost price of the items was $22 each. Operating expenses totalled $7 000 and income tax expense was $5 000. What was the gross profit of Grasso Ltd for the year?

Which of the following is an expense?

During the year ended 30 June 2019, March Ltd earned revenues of $1 200 and incurred expenses of $800. Retained profits at 1 July 2018 were $700, and at 30 June 2019, $850. What was the dividend declared by March Ltd during the year?

What is total revenue for the period in which the following occurs?

Which of the following statements about assets is NOT true?

Use the information given below (as at 30 June 2019) to answer the following question. Assume no dividends were declared during the year. If the balance of retained profits at the start of the year was $50 000, what was the profit for the year?

Gross profit is the difference between:

If a company pays a 12-month insurance premium for $2 400 on 1 May 2019, then at 30 June 2019 the accounts will show:

Given only the following information, calculate net profit.

Wages of $40 000 were paid in June for work done in June; $5 000 of wages were owed at end of June for work done in June; and an invoice for $8 000 was received for June advertising to be paid in July. What are total expenses for June 2019?

During 2019, Beta Ltd incurred expenses of $30 000 and earned a net profit of $5 000. Retained profits at 1 January 2019 stood at $7 000 and dividends declared and paid totalled $3 000. What was the balance of Beta Ltd's retained profits at 31 December 2019?

To which balance sheet grouping does the item 'accounts receivable' normally belong?

Which of the following statements is TRUE?

Introduction to Financial Accounting

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

Investments and Shareholders Equity

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters

Exam 2: Measuring and Evaluating Financial Position and Financial Performance

Which of the following is NOT an expense of a company?

Which of the following questions CANNOT be answered from a balance sheet?

Which of the following is NOT a revenue of a company?

Which of the following is NOT an expense of a company?

Which of the following CANNOT be classified as a current liability?

If the last wages bill for the year is paid on 28 June and $8 000 is owing at 30 June in unpaid wages, then:

Which of the following is NOT a revenue of a company?

During the year, Grasso Ltd sold 2000 items at $30 each. The cost price of the items was $22 each. Operating expenses totalled $7 000 and income tax expense was $5 000. What was the gross profit of Grasso Ltd for the year?

Which of the following is an expense?

During the year ended 30 June 2019, March Ltd earned revenues of $1 200 and incurred expenses of $800. Retained profits at 1 July 2018 were $700, and at 30 June 2019, $850. What was the dividend declared by March Ltd during the year?

What is total revenue for the period in which the following occurs?

Which of the following statements about assets is NOT true?

Use the information given below (as at 30 June 2019) to answer the following question. Assume no dividends were declared during the year. If the balance of retained profits at the start of the year was $50 000, what was the profit for the year?

Gross profit is the difference between:

If a company pays a 12-month insurance premium for $2 400 on 1 May 2019, then at 30 June 2019 the accounts will show:

Given only the following information, calculate net profit.

Wages of $40 000 were paid in June for work done in June; $5 000 of wages were owed at end of June for work done in June; and an invoice for $8 000 was received for June advertising to be paid in July. What are total expenses for June 2019?

During 2019, Beta Ltd incurred expenses of $30 000 and earned a net profit of $5 000. Retained profits at 1 January 2019 stood at $7 000 and dividends declared and paid totalled $3 000. What was the balance of Beta Ltd's retained profits at 31 December 2019?

To which balance sheet grouping does the item 'accounts receivable' normally belong?

Which of the following statements is TRUE?

Introduction to Financial Accounting

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

Investments and Shareholders Equity

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters