Question 1

The quality of accounting information that requires items that are basically the same to be treated in the same manner is:

Accepted Answer

A)  relevance. 
B)  timeliness. 
C)  understandability. 
D)  comparability. 
A)  relevance. 
B)  timeliness. 
C)  understandability. 
D)  comparability. D

Question 2

The financial statement which shows all the changes in the owners' interest in the net assets of the business is:

Accepted Answer

A)  statement of changes in owners' equity. 
B)  statement of cash flows. 
C)  statement of comprehensive income. 
D)  none of the above. 
A)  statement of changes in owners' equity. 
B)  statement of cash flows. 
C)  statement of comprehensive income. 
D)  none of the above. A

Question 3

Financial accounting reports,compared to management reports,tend to be:

Accepted Answer

A)  general purpose. 
B)  qualitative. 
C)  unstructured. 
D)  detailed. 
A)  general purpose. 
B)  qualitative. 
C)  unstructured. 
D)  detailed. A

Question 4

The term that describes differences between actual and budgeted results is:

Accepted Answer

A)  divergence. 
B)  discrepancy. 
C)  mistake. 
D)  variance. 
A)  divergence. 
B)  discrepancy. 
C)  mistake. 
D)  variance.

Question 5

Management reports,compared to financial reports,are:

Accepted Answer

A)  prepared less frequently. 
B)  prepared more frequently. 
C)  prepared with the same frequency. 
D)  prepared infrequently. 
A)  prepared less frequently. 
B)  prepared more frequently. 
C)  prepared with the same frequency. 
D)  prepared infrequently.

Question 6

A common aspect of questionable figures in financial reports is:

Accepted Answer

A)  overstating figures for income and assets. 
B)  overstating figures for income and understating figures for assets. 
C)  understating figures for income and expenses. 
D)  overstating figures for expenses and liabilities. 
A)  overstating figures for income and assets. 
B)  overstating figures for income and understating figures for assets. 
C)  understating figures for income and expenses. 
D)  overstating figures for expenses and liabilities.

Question 7

Which of these groups is a user of financial information?

Accepted Answer

A)  Managers. 
B)  Lenders. 
C)  Owners. 
D)  All of the above. 
A)  Managers. 
B)  Lenders. 
C)  Owners. 
D)  All of the above.

Question 8

The characteristic of accounting information that requires financial reports to be expressed as clearly as possible and to be capable of being understood by those they are addressed to,is known as:

Accepted Answer

A)  understandability. 
B)  reliability. 
C)  cost versus benefit test. 
D)  relevance. 
A)  understandability. 
B)  reliability. 
C)  cost versus benefit test. 
D)  relevance.

Question 9

The best description of the primary purpose of providing accounting information is:

Accepted Answer

A)  to allow the preparation of a taxation return. 
B)  to assist users in making informed decisions. 
C)  to calculate the bank account balance. 
D)  to enable the financial statements to be prepared. 
A)  to allow the preparation of a taxation return. 
B)  to assist users in making informed decisions. 
C)  to calculate the bank account balance. 
D)  to enable the financial statements to be prepared.

Question 10

A statement of financial position shows:

Accepted Answer

A)  the financial position at the end of the period. 
B)  the cash movements that took place over a particular period. 
C)  details of how much profit was earned in the period. 
D)  the change in financial position over a particular period. 
A)  the financial position at the end of the period. 
B)  the cash movements that took place over a particular period. 
C)  details of how much profit was earned in the period. 
D)  the change in financial position over a particular period.

Question 11

The planning role within a company is principally undertaken by:

Accepted Answer

A)  consultants. 
B)  managers. 
C)  shareholders. 
D)  lenders. 
A)  consultants. 
B)  managers. 
C)  shareholders. 
D)  lenders.

Question 12

The accounting report that is specifically designed to answer the question,'What cash movements took place over a particular period?' is:

Accepted Answer

A)  the statement of financial position. 
B)  the statement of cash flows. 
C)  the statement of comprehensive income. 
D)  all of the above. 
A)  the statement of financial position. 
B)  the statement of cash flows. 
C)  the statement of comprehensive income. 
D)  all of the above.

Question 13

The business most likely to operate as a sole proprietorship is:

Accepted Answer

A)  private hospital. 
B)  medical specialist. 
C)  bank. 
D)  airline. 
A)  private hospital. 
B)  medical specialist. 
C)  bank. 
D)  airline.

Question 14

The group of users that is most likely to require accounting information to assess the ability of a business to pay interest and repay a loan is:

Accepted Answer

A)  employees. 
B)  lenders. 
C)  customers. 
D)  taxation department. 
A)  employees. 
B)  lenders. 
C)  customers. 
D)  taxation department.

Question 15

Four key qualities of accounting information are:

Accepted Answer

A)  control, planning, analysis, and comparability. 
B)  identification, analysis, reliability, and timeliness. 
C)  relevance, reliability, comparability, and understandability. 
D)  understandability, identification, analysis, and relevance. 
A)  control, planning, analysis, and comparability. 
B)  identification, analysis, reliability, and timeliness. 
C)  relevance, reliability, comparability, and understandability. 
D)  understandability, identification, analysis, and relevance.

Question 16

A business that is not a legal entity,where there is one owner who is fully liable for all debts,is:

Accepted Answer

A)  a proprietary company. 
B)  a partnership. 
C)  a sole proprietorship. 
D)  none of the above. 
A)  a proprietary company. 
B)  a partnership. 
C)  a sole proprietorship. 
D)  none of the above.

Question 17

Calculate the cash available at the end of the day if cash at the beginning is $450,receipts from customers are $600 and payments to suppliers are $350.

Accepted Answer

A)  $750. 
B)  $200. 
C)  $700. 
D)  $1,400. 
A)  $750. 
B)  $200. 
C)  $700. 
D)  $1,400.

Question 18

The goal of business in relation to profit is generally taken as:

Accepted Answer

A)  profit maximisation. 
B)  profit planning. 
C)  profit generation. 
D)  profit stabilisation. 
A)  profit maximisation. 
B)  profit planning. 
C)  profit generation. 
D)  profit stabilisation.

Question 19

Management reports,compared to financial reports,are:

Accepted Answer

A)  summarised. 
B)  aggregated. 
C)  standardised. 
D)  detailed. 
A)  summarised. 
B)  aggregated. 
C)  standardised. 
D)  detailed.

Question 20

Briefly explain the meaning of each of the four key qualitative characteristics of accounting information: relevance,reliability,comparability and understandability.Also explain how the cost/benefit test acts as a limit on the application of these characteristics.

Accepted Answer

Relevance means that accounting informat

The quality of accounting information that requires items that are basically the same to be treated in the same manner is:

The financial statement which shows all the changes in the owners' interest in the net assets of the business is:

Financial accounting reports,compared to management reports,tend to be:

The term that describes differences between actual and budgeted results is:

Management reports,compared to financial reports,are:

A common aspect of questionable figures in financial reports is:

Which of these groups is a user of financial information?

The characteristic of accounting information that requires financial reports to be expressed as clearly as possible and to be capable of being understood by those they are addressed to,is known as:

The best description of the primary purpose of providing accounting information is:

A statement of financial position shows:

The planning role within a company is principally undertaken by:

The accounting report that is specifically designed to answer the question,'What cash movements took place over a particular period?' is:

The business most likely to operate as a sole proprietorship is:

The group of users that is most likely to require accounting information to assess the ability of a business to pay interest and repay a loan is:

Four key qualities of accounting information are:

A business that is not a legal entity,where there is one owner who is fully liable for all debts,is:

Calculate the cash available at the end of the day if cash at the beginning is $450,receipts from customers are $600 and payments to suppliers are $350.

The goal of business in relation to profit is generally taken as:

Management reports,compared to financial reports,are:

Briefly explain the meaning of each of the four key qualitative characteristics of accounting information: relevance,reliability,comparability and understandability.Also explain how the cost/benefit test acts as a limit on the application of these characteristics.

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

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

Costvolumeprofit Analysis and Relevant Costing

Full Costing

Budgeting

Capital Investment Decisions

The Management of Working Capital

Financing the Business

Filters

Exam 1: Introduction to Accounting

The quality of accounting information that requires items that are basically the same to be treated in the same manner is:

The financial statement which shows all the changes in the owners' interest in the net assets of the business is:

Financial accounting reports,compared to management reports,tend to be:

The term that describes differences between actual and budgeted results is:

Management reports,compared to financial reports,are:

A common aspect of questionable figures in financial reports is:

Which of these groups is a user of financial information?

The characteristic of accounting information that requires financial reports to be expressed as clearly as possible and to be capable of being understood by those they are addressed to,is known as:

The best description of the primary purpose of providing accounting information is:

A statement of financial position shows:

The planning role within a company is principally undertaken by:

The accounting report that is specifically designed to answer the question,'What cash movements took place over a particular period?' is:

The business most likely to operate as a sole proprietorship is:

The group of users that is most likely to require accounting information to assess the ability of a business to pay interest and repay a loan is:

Four key qualities of accounting information are:

A business that is not a legal entity,where there is one owner who is fully liable for all debts,is:

Calculate the cash available at the end of the day if cash at the beginning is $450,receipts from customers are $600 and payments to suppliers are $350.

The goal of business in relation to profit is generally taken as:

Management reports,compared to financial reports,are:

Briefly explain the meaning of each of the four key qualitative characteristics of accounting information: relevance,reliability,comparability and understandability.Also explain how the cost/benefit test acts as a limit on the application of these characteristics.

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

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

Costvolumeprofit Analysis and Relevant Costing

Full Costing

Budgeting

Capital Investment Decisions

The Management of Working Capital

Financing the Business

Filters