Question 1

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

Accepted Answer

A)  accounting entity 
B)  monetary 
C)  historical cost 
D)  going concern. 
A)  accounting entity 
B)  monetary 
C)  historical cost 
D)  going concern. A

Question 2

Which of the following statements about financial accounting is NOT true?

Accepted Answer

A)  A marketing manager does not need to be concerned with financial accounting. 
B)  The financial accountant faces a challenge in figuring out which numbers to use. 
C)  Adding and subtracting is often the easy part of financial accounting. 
D)  Significant judgement is required in accounting. 
A)  A marketing manager does not need to be concerned with financial accounting. 
B)  The financial accountant faces a challenge in figuring out which numbers to use. 
C)  Adding and subtracting is often the easy part of financial accounting. 
D)  Significant judgement is required in accounting. A

Question 3

Financial performance means:

Accepted Answer

A)  providing information about the cash position of an entity 
B)  setting out the enterprise's set of financial resources and obligations at a point in time 
C)  identifying,measuring and communicating economic information to allow informed decisions 
D)  generating new resources for day-to-day operations over a period of time. 
A)  providing information about the cash position of an entity 
B)  setting out the enterprise's set of financial resources and obligations at a point in time 
C)  identifying,measuring and communicating economic information to allow informed decisions 
D)  generating new resources for day-to-day operations over a period of time. D

Question 4

Which of the following may be an asset of a business enterprise?

Accepted Answer

A)  retained profits 
B)  inventory 
C)  provision for warranty repairs 
D)  shareholders' equity. 
A)  retained profits 
B)  inventory 
C)  provision for warranty repairs 
D)  shareholders' equity.

Question 5

The owner of a corner store keeps separate private and business transactions.To which financial statement assumption does this relate?

Accepted Answer

A)  materiality 
B)  accounting entity 
C)  accounting period 
D)  going concern. 
A)  materiality 
B)  accounting entity 
C)  accounting period 
D)  going concern.

Question 6

Use the information given below to answer the following questions:
During 2012, a company makes credit sales of $600 000, of which $350 000 is collected at year-end. It pays $220 000 in expenses and owes $20 000 for electricity used during 2012.
-What would the profit be if cash accounting rather than accrual accounting were used?

Accepted Answer

A)  $130 000 
B)  $110 000 
C)  $380 000 
D)  $730 000. 
A)  $130 000 
B)  $110 000 
C)  $380 000 
D)  $730 000.

Question 7

Which of the following is NOT shown in the heading of the balance sheet?

Accepted Answer

A)  the name of the enterprise 
B)  the title of the report 
C)  the period covered by the report 
D)  all of the above are shown in the heading. 
A)  the name of the enterprise 
B)  the title of the report 
C)  the period covered by the report 
D)  all of the above are shown in the heading.

Question 8

Which of the following statements about financial accounting is NOT true?

Accepted Answer

A)  Financial accounting helps banks decide whether or not to lend. 
B)  Financial accounting helps stock market investors decide whether to buy company shares. 
C)  Financial accounting reports on the performance of managers as decision-makers. 
D)  Employees assess whether the company can repay long-term debt. 
A)  Financial accounting helps banks decide whether or not to lend. 
B)  Financial accounting helps stock market investors decide whether to buy company shares. 
C)  Financial accounting reports on the performance of managers as decision-makers. 
D)  Employees assess whether the company can repay long-term debt.

Question 9

Which of the following organisations may not find the financial statements useful?

Accepted Answer

A)  Australian Taxation Office 
B)  a church congregation 
C)  a university 
D)  all of the above. 
A)  Australian Taxation Office 
B)  a church congregation 
C)  a university 
D)  all of the above.

Question 10

Financial statements are prepared on the premise that the organisation will continue operations in the foreseeable future.To which financial statement assumption does this relate?

Accepted Answer

A)  accounting entity 
B)  monetary 
C)  historical cost 
D)  going concern. 
A)  accounting entity 
B)  monetary 
C)  historical cost 
D)  going concern.

Question 11

Does measuring economic performance involve: (i)estimates; (ii)adjustments; and/or (iii)judgements?

Accepted Answer

A)  (i)and (ii)only 
B)  (i)and (iii)only 
C)  (ii)and (iii)only 
D)  (i),(ii)and (iii). 
A)  (i)and (ii)only 
B)  (i)and (iii)only 
C)  (ii)and (iii)only 
D)  (i),(ii)and (iii).

Question 12

Which of the following is NOT an example of a liability?

Accepted Answer

A)  provisions for long service leave 
B)  share capital 
C)  accounts payable 
D)  loan payable. 
A)  provisions for long service leave 
B)  share capital 
C)  accounts payable 
D)  loan payable.

Question 13

The owner withdraws inventory for his own use from the business.To which financial statement assumption does this relate?

Accepted Answer

A)  materiality 
B)  monetary 
C)  accounting period 
D)  accounting entity. 
A)  materiality 
B)  monetary 
C)  accounting period 
D)  accounting entity.

Question 14

Which of the following is NOT a main element in the balance sheet?

Accepted Answer

A)  assets 
B)  profit 
C)  shareholders' equity 
D)  liabilities. 
A)  assets 
B)  profit 
C)  shareholders' equity 
D)  liabilities.

Question 15

Use the information given below to answer the following questions:
$$\begin{array} { l r } 
&\$\
\text { Cash sales } & 20000 \
\text { Credit sales } & 60000 \
\text { Cash received from accounts receivable } & 42000 \
\text { Wages paid } & 10000 \
\text { Wages owing at year-end } & 8000
\end{array}$$
-What is the net profit for 2012?

Accepted Answer

A)  $70 000 
B)  $62 000 
C)  $104 000 
D)  $112 000. 
A)  $70 000 
B)  $62 000 
C)  $104 000 
D)  $112 000.

Question 16

Financial statements provide useful information for shareholders to:

Accepted Answer

A)  understand day-to-day activities 
B)  decide whether to buy,sell or hold shares of companies 
C)  decide whether to lend money to the business entity 
D)  create business planning strategies. 
A)  understand day-to-day activities 
B)  decide whether to buy,sell or hold shares of companies 
C)  decide whether to lend money to the business entity 
D)  create business planning strategies.

Question 17

A financial statement:

Accepted Answer

A)  summarises the measurements of financial performance and financial position 
B)  summarises the cash position of a business entity 
C)  analyses the financial performance of a business entity 
D)  analyses the business's ability to meet its financial obligations. 
A)  summarises the measurements of financial performance and financial position 
B)  summarises the cash position of a business entity 
C)  analyses the financial performance of a business entity 
D)  analyses the business's ability to meet its financial obligations.

Question 18

A stapling machine,costing $25 with a useful life of 5 years,is treated as a stationery expense rather than as an asset.To what financial statement assumption does this relate?

Accepted Answer

A)  materiality 
B)  monetary 
C)  accounting period 
D)  accounting entity. 
A)  materiality 
B)  monetary 
C)  accounting period 
D)  accounting entity.

Question 19

Using the Australian dollar to measure accounting transactions allows comparisons across periods.To which financial statement assumption does this relate?

Accepted Answer

A)  accounting entity 
B)  monetary 
C)  historical cost 
D)  going concern. 
A)  accounting entity 
B)  monetary 
C)  historical cost 
D)  going concern.

Question 20

Use the information given below to answer the following questions:
LPR is a company that commenced business on 1 January 2012. Below are the balances in the 30 June 2012 financial statements.
$$\begin{array} { l r } 
&\$\
\text { Cash } & 2000 \
\text { Share capital } & 12000 \
\text { Accounts receivable } & 6000 \
\text { Accounts payable } & 4000 \
\text { Loan payable } & 14000 \
\text { Land } & 20000 \
\text { Inventory } & 4000 \
\text { Cost of goods sold } & 3000 \
\text { Wages expense } & 5000 \
\text { Sales } & 10000
\end{array}$$

-What is the net profit for the period ending 30 June 2012?

Accepted Answer

A)  $7000 
B)  $2000 
C)  $4000 
D)  $2000. 
A)  $7000 
B)  $2000 
C)  $4000 
D)  $2000.

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

Which of the following statements about financial accounting is NOT true?

Financial performance means:

Which of the following may be an asset of a business enterprise?

The owner of a corner store keeps separate private and business transactions.To which financial statement assumption does this relate?

Which of the following is NOT shown in the heading of the balance sheet?

Which of the following statements about financial accounting is NOT true?

Which of the following organisations may not find the financial statements useful?

Financial statements are prepared on the premise that the organisation will continue operations in the foreseeable future.To which financial statement assumption does this relate?

Does measuring economic performance involve: (i)estimates; (ii)adjustments; and/or (iii)judgements?

Which of the following is NOT an example of a liability?

The owner withdraws inventory for his own use from the business.To which financial statement assumption does this relate?

Which of the following is NOT a main element in the balance sheet?

Use the information given below to answer the following questions: \ Cash sales 20000 Credit sales 60000 Cash received from accounts receivable 42000 Wages paid 10000 Wages owing at year-end 8000 -What is the net profit for 2012?

Financial statements provide useful information for shareholders to:

A financial statement:

A stapling machine,costing $25 with a useful life of 5 years,is treated as a stationery expense rather than as an asset.To what financial statement assumption does this relate?

Using the Australian dollar to measure accounting transactions allows comparisons across periods.To which financial statement assumption does this relate?

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, accounting Standards and Auditing

Sustainability Reporting

Internal Control and Cash

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Appendix: Special Journals, subsidiary Ledgers and Control Accounts

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Exam 1: Introduction to Financial Accounting

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

Which of the following statements about financial accounting is NOT true?

Financial performance means:

Which of the following may be an asset of a business enterprise?

The owner of a corner store keeps separate private and business transactions.To which financial statement assumption does this relate?

Which of the following is NOT shown in the heading of the balance sheet?

Which of the following statements about financial accounting is NOT true?

Which of the following organisations may not find the financial statements useful?

Financial statements are prepared on the premise that the organisation will continue operations in the foreseeable future.To which financial statement assumption does this relate?

Does measuring economic performance involve: (i)estimates; (ii)adjustments; and/or (iii)judgements?

Which of the following is NOT an example of a liability?

The owner withdraws inventory for his own use from the business.To which financial statement assumption does this relate?

Which of the following is NOT a main element in the balance sheet?

Use the information given below to answer the following questions: \ Cash sales 20000 Credit sales 60000 Cash received from accounts receivable 42000 Wages paid 10000 Wages owing at year-end 8000 -What is the net profit for 2012?

Financial statements provide useful information for shareholders to:

A financial statement:

A stapling machine,costing $25 with a useful life of 5 years,is treated as a stationery expense rather than as an asset.To what financial statement assumption does this relate?

Using the Australian dollar to measure accounting transactions allows comparisons across periods.To which financial statement assumption does this relate?

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, accounting Standards and Auditing

Sustainability Reporting

Internal Control and Cash

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Appendix: Special Journals, subsidiary Ledgers and Control Accounts

Filters