Question 1

Which of the following statements about an income statement is TRUE?

Accepted Answer

A)  An income statement provides information on an organisation's profitability at a certain point in time. 
B)  An income statement deducts liabilities from assets to determine shareholders' equity. 
C)  The revenues may include contributions from owners. 
D)  For revenue to be included, it is not necessary for cash to have been received. 
A)  An income statement provides information on an organisation's profitability at a certain point in time. 
B)  An income statement deducts liabilities from assets to determine shareholders' equity. 
C)  The revenues may include contributions from owners. 
D)  For revenue to be included, it is not necessary for cash to have been received.

Question 2

Which of the following statements about shareholders' equity is NOT true?

Accepted Answer

A)  Shareholders' equity is the excess of assets over liabilities. 
B)  Shareholders' equity consists of two main elements: share capital and retained profits. 
C)  Shareholders' equity is a residual claim of the shareholders on the assets of the organisation. 
D)  Shareholders' equity is the amount shareholders will receive in dividends in the future. 
A)  Shareholders' equity is the excess of assets over liabilities. 
B)  Shareholders' equity consists of two main elements: share capital and retained profits. 
C)  Shareholders' equity is a residual claim of the shareholders on the assets of the organisation. 
D)  Shareholders' equity is the amount shareholders will receive in dividends in the future.

Question 3

Identify the accounting concept or principle that relates to the statement in the following statement: Information should have predictive value and/or feedback value.

Accepted Answer

A)  Relevance 
B)  Faithful representation 
C)  Materiality 
D)  Comparability 
A)  Relevance 
B)  Faithful representation 
C)  Materiality 
D)  Comparability

Question 4

What is the net profit for 2019 given the following information?

Accepted Answer

A)  $26 000 
B)  $32 000 
C)  $46 000 
D)  None of the above 
A)  $26 000 
B)  $32 000 
C)  $46 000 
D)  None of the above

Question 5

The life of a business is divided into equal periods to determine profit or loss for that period. What assumption/concept underlies this procedure?

Accepted Answer

A)  Historical cost 
B)  Monetary 
C)  Accounting period 
D)  Accounting entity 
A)  Historical cost 
B)  Monetary 
C)  Accounting period 
D)  Accounting entity

Question 6

Which of the following statements is NOT true?

Accepted Answer

A)  Judgements made by accountants affect profit. 
B)  Attempts are made to measure incomplete transactions. 
C)  The impact of transactions is recognised only when cash is received or paid. 
D)  Estimates are made of certain balance sheet items. 
A)  Judgements made by accountants affect profit. 
B)  Attempts are made to measure incomplete transactions. 
C)  The impact of transactions is recognised only when cash is received or paid. 
D)  Estimates are made of certain balance sheet items.

Question 7

LPR is a company that commenced business on 1 January 2019. Below are the balances in the 30 June 2019 financial statements.   What is the net profit for the period ending 30 June 2019?

Accepted Answer

A)  $15 000 
B)  $25 000 
C)  $40 000 
D)  None of the above 
A)  $15 000 
B)  $25 000 
C)  $40 000 
D)  None of the above

Question 8

Use the information given below at 30 June 2019 to answer the following question.   What is the balance of shareholder equity?

Accepted Answer

A)  $300 000 
B)  $460 000 
C)  $760 000 
D)  None of the above. 
A)  $300 000 
B)  $460 000 
C)  $760 000 
D)  None of the above.

Question 9

A company's assets are differentiated from the owners' assets. What assumption/concept underlies this procedure?

Accepted Answer

A)  Accounting entity 
B)  Accounting period 
C)  Historical cost 
D)  Going concern 
A)  Accounting entity 
B)  Accounting period 
C)  Historical cost 
D)  Going concern

Which of the following statements about an income statement is TRUE?

Which of the following statements about shareholders' equity is NOT true?

Identify the accounting concept or principle that relates to the statement in the following statement: Information should have predictive value and/or feedback value.

What is the net profit for 2019 given the following information?

The life of a business is divided into equal periods to determine profit or loss for that period. What assumption/concept underlies this procedure?

Which of the following statements is NOT true?

LPR is a company that commenced business on 1 January 2019. Below are the balances in the 30 June 2019 financial statements. What is the net profit for the period ending 30 June 2019?

Use the information given below at 30 June 2019 to answer the following question. What is the balance of shareholder equity?

A company's assets are differentiated from the owners' assets. What assumption/concept underlies this procedure?

Measuring and Evaluating Financial Position and Financial Performance

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 1: Introduction to Financial Accounting

Which of the following statements about an income statement is TRUE?

Which of the following statements about shareholders' equity is NOT true?

Identify the accounting concept or principle that relates to the statement in the following statement: Information should have predictive value and/or feedback value.

What is the net profit for 2019 given the following information?

The life of a business is divided into equal periods to determine profit or loss for that period. What assumption/concept underlies this procedure?

Which of the following statements is NOT true?

LPR is a company that commenced business on 1 January 2019. Below are the balances in the 30 June 2019 financial statements. What is the net profit for the period ending 30 June 2019?

Use the information given below at 30 June 2019 to answer the following question. What is the balance of shareholder equity?

A company's assets are differentiated from the owners' assets. What assumption/concept underlies this procedure?

Measuring and Evaluating Financial Position and Financial Performance

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