Question 1

Accrued expenses are classified in the statement of financial position as a:

Accepted Answer

A) Current liability. 
B) Non-current asset. 
C) Non-current liability. 
D) Current asset. 
A) Current liability. 
B) Non-current asset. 
C) Non-current liability. 
D) Current asset.

Question 2

Which of these occurrences could account for a difference between the total value of inventory in the accounting records and the total value of inventory as per the stocktake?

Accepted Answer

A) Cost of sales transactions not recorded in the accounting records. 
B) Inventory stolen from the storeroom. 
C) Some inventory items not counted in the stocktake. 
D) All of the above. 
A) Cost of sales transactions not recorded in the accounting records. 
B) Inventory stolen from the storeroom. 
C) Some inventory items not counted in the stocktake. 
D) All of the above.

Question 3

The writing off of a debtor's account as a bad debt when no allowance for doubtful debts has been made will see:

Accepted Answer

A) a decrease in the asset accounts receivable, decrease in equity. 
B) no effect. 
C) a decrease in the asset accounts receivable, increase in the liability provision for doubtful debts. 
D) a decrease in the asset bank, decrease in the asset accounts receivable. 
A) a decrease in the asset accounts receivable, decrease in equity. 
B) no effect. 
C) a decrease in the asset accounts receivable, increase in the liability provision for doubtful debts. 
D) a decrease in the asset bank, decrease in the asset accounts receivable.

Question 4

The accounting principle underpinning the inventory valuation rule 'the lower of cost and net realisable value' is:

Accepted Answer

A) prudence (conservatism). 
B) historical cost. 
C) matching costs with revenue. 
D) going concern. 
A) prudence (conservatism). 
B) historical cost. 
C) matching costs with revenue. 
D) going concern.

Question 5

The cost associated with the purchase of a new machine that will be included in the cost of the machine is:

Accepted Answer

A) invoice price. 
B) installation costs. 
C) delivery charges. 
D) all of the above. 
A) invoice price. 
B) installation costs. 
C) delivery charges. 
D) all of the above.

Question 6

The method of inventory valuation that assumes the earliest inventory acquired is the first to be sold is the:

Accepted Answer

A) lower of cost and net realisable value method. 
B) average cost method 
C) FIFO method. 
D) LIFO method. 
A) lower of cost and net realisable value method. 
B) average cost method 
C) FIFO method. 
D) LIFO method.

Question 7

In practice, under accrual accounting, most income is recognised:

Accepted Answer

A) when the goods are delivered. 
B) when the cash is received. 
C) when the goods are produced. 
D) when an order is received. 
A) when the goods are delivered. 
B) when the cash is received. 
C) when the goods are produced. 
D) when an order is received.

Question 8

Which asset is not depreciated?

Accepted Answer

A) motor vehicles. 
B) buildings. 
C) premises. 
D) land. 
A) motor vehicles. 
B) buildings. 
C) premises. 
D) land.

Question 9

The statement of financial performance provides information on:

Accepted Answer

A) the financial structure of the business. 
B) the financial position of the business. 
C) how successful the business was in generating wealth. 
D) cash inflows and outflows for the accounting period. 
A) the financial structure of the business. 
B) the financial position of the business. 
C) how successful the business was in generating wealth. 
D) cash inflows and outflows for the accounting period.

Question 10

On 31 December 2017, a new motor vehicle with a useful life of five years and an estimated residual value of $5,000 was purchased by a business at a cost of $35,000. The amount of depreciation expense charged for the six months ended 30 June 2018, using the straight-line method, is:

Accepted Answer

A) nil. 
B) $3,000. 
C) $25,000. 
D) $4,000. 
A) nil. 
B) $3,000. 
C) $25,000. 
D) $4,000.

Accrued expenses are classified in the statement of financial position as a:

Which of these occurrences could account for a difference between the total value of inventory in the accounting records and the total value of inventory as per the stocktake?

The writing off of a debtor's account as a bad debt when no allowance for doubtful debts has been made will see:

The accounting principle underpinning the inventory valuation rule 'the lower of cost and net realisable value' is:

The cost associated with the purchase of a new machine that will be included in the cost of the machine is:

The method of inventory valuation that assumes the earliest inventory acquired is the first to be sold is the:

In practice, under accrual accounting, most income is recognised:

Which asset is not depreciated?

The statement of financial performance provides information on:

On 31 December 2017, a new motor vehicle with a useful life of five years and an estimated residual value of $5,000 was purchased by a business at a cost of $35,000. The amount of depreciation expense charged for the six months ended 30 June 2018, using the straight-line method, is:

Introduction to Accounting

Measuring and Reporting Financial Position

Introduction to Limited Companies

Regulatory Framework for Companies

Measuring and Reporting Cash Flows

Corporate Social Responsibility and Sustainability Accounting

Analysis and Interpretation of Financial Statements

Cost-Volume-Profit Analysis and Relevant Costing

Full Costing

Budgeting

Capital Investment Decisions

The Management of Working Capital

Financing the Business

Filters

Exam 3: Measuring and Reporting Financial Performance

Accrued expenses are classified in the statement of financial position as a:

Which of these occurrences could account for a difference between the total value of inventory in the accounting records and the total value of inventory as per the stocktake?

The writing off of a debtor's account as a bad debt when no allowance for doubtful debts has been made will see:

The accounting principle underpinning the inventory valuation rule 'the lower of cost and net realisable value' is:

The cost associated with the purchase of a new machine that will be included in the cost of the machine is:

The method of inventory valuation that assumes the earliest inventory acquired is the first to be sold is the:

In practice, under accrual accounting, most income is recognised:

Which asset is not depreciated?

The statement of financial performance provides information on:

On 31 December 2017, a new motor vehicle with a useful life of five years and an estimated residual value of $5,000 was purchased by a business at a cost of $35,000. The amount of depreciation expense charged for the six months ended 30 June 2018, using the straight-line method, is:

Introduction to Accounting

Measuring and Reporting Financial Position

Introduction to Limited Companies

Regulatory Framework for Companies

Measuring and Reporting Cash Flows

Corporate Social Responsibility and Sustainability Accounting

Analysis and Interpretation of Financial Statements

Cost-Volume-Profit Analysis and Relevant Costing

Full Costing

Budgeting

Capital Investment Decisions

The Management of Working Capital

Financing the Business

Filters