Exam 3: Measuring and Reporting Financial Performance

Which of the following would be a suitable format for the statement of financial performance for a medium size furniture store operation as a partnership?

The accounting principle that requires the same depreciation method or inventory valuation method to be used over consecutive accounting periods is:

Identify the outgoing that could not appear in the statement of financial performance.

Employees have worked for the full year and have received total wages of $305,000 in cash. However, they must wait until the next payday to be paid for the last three days of the year they have worked. The amount owing is $6,500. Wages expense in the statement of financial performance and accrued wages in the statement of financial position are respectively:

Which type of business would call its main source of income sales?

What is the estimated residual value of an asset?

Which statement about net profit is not true?

Under accrual accounting, profit is measured as:

If inventory item X has a cost of $49,000 and a net realisable value of $60,000 while inventory item Y has a cost of $2,000 and a net realisable value of $500, closing inventory will be valued at:

When is income considered to have been earned?

Which is the best description of the relationship between the statement of financial performance and the statement of financial position?

The accounting principle underpinning the practice of providing for bad and doubtful debts is the:

All of the statements concerning bad and doubtful debts are correct, except which of the following?

Calculate gross profit if sales are $90,000, inventory at beginning is $5,600, purchases of inventory are $30,500 and inventory at end is $4,900.

Accrual accounting:

Which of the following is a measure of wealth created for owners?

Under accrual accounting, income is:

Which of these is not part of inventory for a manufacturing firm?

Where the amount of cash paid for office expenses during the year is less than the amount of office expenses recognised in the statement of financial performance under the accrual accounting approach, the difference is recorded in the statement of financial position as:

If equity at the beginning of the period is $180,000, profit for the period is $90,000 and $25,000 is withdrawn by the owner during the period, equity at the end of the period is: