Question 1

Which of the following is not a problem associated with segment reporting?

Accepted Answer

A) Allocation of assets and expenses may vary among segments 
B) Identifying a segment 
C) Identifying unprofitable segments 
D) Transfer pricing 
A) Allocation of assets and expenses may vary among segments 
B) Identifying a segment 
C) Identifying unprofitable segments 
D) Transfer pricing C

Question 2

Financial reports for a reporting entity should fairly reflect each of the following except:

Accepted Answer

A) capital budget. 
B) liquidity of the firm. 
C) financial performance. 
D) financial position. 
A) capital budget. 
B) liquidity of the firm. 
C) financial performance. 
D) financial position. A

Question 3

In a statement of financial position, subclassifications such as reserves, provisions and inventories are generally reported:

Accepted Answer

A) in the financial statement itself. 
B) in the director's report. 
C) as notes to the main financial statements. 
D) These items do not have to be reported at all 
A) in the financial statement itself. 
B) in the director's report. 
C) as notes to the main financial statements. 
D) These items do not have to be reported at all C

Question 4

Pressuring distributors to accept more goods than they can sell is:

Accepted Answer

A) a method of manipulating liabilities. 
B) channel stuffing. 
C) engaging in artificial trading. 
D) a method of manipulating expenses. 
A) a method of manipulating liabilities. 
B) channel stuffing. 
C) engaging in artificial trading. 
D) a method of manipulating expenses.

Question 5

A public company is a:

Accepted Answer

A) reporting entity. 
B) disclosing entity. 
C) Both A and B 
D) Neither A nor B 
A) reporting entity. 
B) disclosing entity. 
C) Both A and B 
D) Neither A nor B

Question 6

How would trade debtors normally be classified in a statement of financial position?

Accepted Answer

A) As a current liability 
B) As a current asset 
C) As a non-current liability 
D) As a reserve 
A) As a current liability 
B) As a current asset 
C) As a non-current liability 
D) As a reserve

Question 7

Which of the following is not true about segmented financial reports?

Accepted Answer

A) Under-performing segments will be revealed. 
B) Risks and profitability of individual segments are identified. 
C) Segments that have been sold will be identified and can be evaluated. 
D) Investors can evaluate the company as a whole. 
A) Under-performing segments will be revealed. 
B) Risks and profitability of individual segments are identified. 
C) Segments that have been sold will be identified and can be evaluated. 
D) Investors can evaluate the company as a whole.

Question 8

The price at which one operating segment of a business sells goods to another operating segment of the same business is the:

Accepted Answer

A) segment price. 
B) trading price. 
C) transfer price. 
D) inter-segment price. 
A) segment price. 
B) trading price. 
C) transfer price. 
D) inter-segment price.

Question 9

An auditor's report does not provide the users of the report with:

Accepted Answer

A) a check on the credibility of the report. 
B) an assurance on whether the financial statements comply with accounting standards. 
C) an opinion on the reliability of the financial statements. 
D) a guarantee of no misstatements in the financial statements. 
A) a check on the credibility of the report. 
B) an assurance on whether the financial statements comply with accounting standards. 
C) an opinion on the reliability of the financial statements. 
D) a guarantee of no misstatements in the financial statements.

Question 10

For information in financial reports to be material, it must:

Accepted Answer

A) be prepared on a timely basis. 
B) affect the discharge of accountability by management of the reporting entity. 
C) influence the decisions of users of that information. 
D) Both B and C 
A) be prepared on a timely basis. 
B) affect the discharge of accountability by management of the reporting entity. 
C) influence the decisions of users of that information. 
D) Both B and C

Question 11

Which of the following organisations would be most likely to elect to order their assets on the statement of financial position according to liquidity?

Accepted Answer

A) Retailer 
B) Credit union 
C) Manufacturer 
D) Builder 
A) Retailer 
B) Credit union 
C) Manufacturer 
D) Builder

Question 12

Incorrect capitalisation of expenses is a means of creative accounting that:

Accepted Answer

A) overstates revenues. 
B) understates revenues. 
C) understates net income. 
D) overstates net income. 
A) overstates revenues. 
B) understates revenues. 
C) understates net income. 
D) overstates net income.

Question 13

Under AASB 101, in the statement of financial position, companies are normally required to distinguish between:

Accepted Answer

A) cash on hand and cash at bank. 
B) property and plant. 
C) current and non-current liabilities. 
D) current profit and retained profits. 
A) cash on hand and cash at bank. 
B) property and plant. 
C) current and non-current liabilities. 
D) current profit and retained profits.

Question 14

Use the data below to calculate MNB Ltd's share issue made in 2017. Equity balance (01/07/2017) - $ \$ 700,000 $
Equity balance (30/06/2018) - $ \$ 1,070,000 $
Retained Earnings $ (30 / 06 / 2018)-\$ 230,000 $
There were no dividends declared in the current year and no other reserve accounts.

Accepted Answer

A) $610 000 
B) $150 000 
C) $140 000 
D) $380 000 
A) $610 000 
B) $150 000 
C) $140 000 
D) $380 000

Question 15

Which of the following is a responsibility of the directors of a public company?

Accepted Answer

A) To maintain an internal control system within the company 
B) To ensure financial statements are prepared showing a true and fair view of an organisation's financial situation 
C) To organise for financial reports to be audited 
D) All of the above 
A) To maintain an internal control system within the company 
B) To ensure financial statements are prepared showing a true and fair view of an organisation's financial situation 
C) To organise for financial reports to be audited 
D) All of the above

Question 16

What organisation is responsible for setting accounting standards in Australia?

Accepted Answer

A) Generally Accepted Accounting Principles (GAAP) 
B) Australian Accounting Standards Board (AAS
B)  
C) International Accounting Standards Boards (IAS
B)  
D) Financial Accounting Standards Board (FAS
B)  
A) Generally Accepted Accounting Principles (GAAP) 
B) Australian Accounting Standards Board (AAS
B)  
C) International Accounting Standards Boards (IAS
B)  
D) Financial Accounting Standards Board (FAS
B)

Question 17

The annual report of a public company must contain:

Accepted Answer

A) an audit report. 
B) a directors' declaration. 
C) a directors' report. 
D) All of the above 
A) an audit report. 
B) a directors' declaration. 
C) a directors' report. 
D) All of the above

Question 18

An audit report that contains the opinion that the financial statements are true and fair and comply with the accounting standards is described as:

Accepted Answer

A) a qualified report. 
B) an authorised report. 
C) a quantified report. 
D) an unqualified report. 
A) a qualified report. 
B) an authorised report. 
C) a quantified report. 
D) an unqualified report.

Question 19

If you were asked to loan money to a company that you feared may be getting into financial difficulties, which of these courses of action would provide you with the most protection from default on the loan?

Accepted Answer

A) Rely on the principle of limited liability 
B) Require a mortgage over a specific asset of the company 
C) Require the accounts of the company to be audited 
D) Specify a particular accounting method to be used 
A) Rely on the principle of limited liability 
B) Require a mortgage over a specific asset of the company 
C) Require the accounts of the company to be audited 
D) Specify a particular accounting method to be used

Question 20

Three key groups associated with companies are directors, shareholders and auditors. a. Explain the relationship between these three groups.
B. Define a reporting entity and a disclosing entity.

Accepted Answer

a. The directors are appointed by the sh

Which of the following is not a problem associated with segment reporting?

Financial reports for a reporting entity should fairly reflect each of the following except:

In a statement of financial position, subclassifications such as reserves, provisions and inventories are generally reported:

Pressuring distributors to accept more goods than they can sell is:

A public company is a:

How would trade debtors normally be classified in a statement of financial position?

Which of the following is not true about segmented financial reports?

The price at which one operating segment of a business sells goods to another operating segment of the same business is the:

An auditor's report does not provide the users of the report with:

For information in financial reports to be material, it must:

Which of the following organisations would be most likely to elect to order their assets on the statement of financial position according to liquidity?

Incorrect capitalisation of expenses is a means of creative accounting that:

Under AASB 101, in the statement of financial position, companies are normally required to distinguish between:

Use the data below to calculate MNB Ltd's share issue made in 2017. Equity balance (01/07/2017) - $\$ 700,000$ Equity balance (30/06/2018) - $\$ 1,070,000$ Retained Earnings $(30 / 06 / 2018)-\$ 230,000$ There were no dividends declared in the current year and no other reserve accounts.

Which of the following is a responsibility of the directors of a public company?

What organisation is responsible for setting accounting standards in Australia?

The annual report of a public company must contain:

An audit report that contains the opinion that the financial statements are true and fair and comply with the accounting standards is described as:

If you were asked to loan money to a company that you feared may be getting into financial difficulties, which of these courses of action would provide you with the most protection from default on the loan?

Three key groups associated with companies are directors, shareholders and auditors. a. Explain the relationship between these three groups. B. Define a reporting entity and a disclosing entity.

Introduction to Accounting

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

Recording Transactionsthe Journal and Ledger Accounts

Accounting Systems and Internal Control

Introduction to Limited 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

Planning and Budgeting

Capital Investment Decisions

Filters

Exam 7: Regulatory Framework for Companies

Which of the following is not a problem associated with segment reporting?

Financial reports for a reporting entity should fairly reflect each of the following except:

In a statement of financial position, subclassifications such as reserves, provisions and inventories are generally reported:

Pressuring distributors to accept more goods than they can sell is:

A public company is a:

How would trade debtors normally be classified in a statement of financial position?

Which of the following is not true about segmented financial reports?

The price at which one operating segment of a business sells goods to another operating segment of the same business is the:

An auditor's report does not provide the users of the report with:

For information in financial reports to be material, it must:

Which of the following organisations would be most likely to elect to order their assets on the statement of financial position according to liquidity?

Incorrect capitalisation of expenses is a means of creative accounting that:

Under AASB 101, in the statement of financial position, companies are normally required to distinguish between:

Which of the following is a responsibility of the directors of a public company?

What organisation is responsible for setting accounting standards in Australia?

The annual report of a public company must contain:

An audit report that contains the opinion that the financial statements are true and fair and comply with the accounting standards is described as:

If you were asked to loan money to a company that you feared may be getting into financial difficulties, which of these courses of action would provide you with the most protection from default on the loan?

Three key groups associated with companies are directors, shareholders and auditors. a. Explain the relationship between these three groups. B. Define a reporting entity and a disclosing entity.

Introduction to Accounting

Measuring and Reporting Financial Position

Measuring and Reporting Financial Performance

Recording Transactionsthe Journal and Ledger Accounts

Accounting Systems and Internal Control

Introduction to Limited 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

Planning and Budgeting

Capital Investment Decisions

Filters