Question 1

Which statement is correct?

Accepted Answer

A) Financial reports are prepared for internal users whereas management reports are prepared for external users. 
B) Financial reports are produced at more frequent intervals than management reports. 
C) Financial reports reflect past performance whereas management reports are concerned with the future as well as the past. 
D) Financial reports provide more forecast data than management reports. 
A) Financial reports are prepared for internal users whereas management reports are prepared for external users. 
B) Financial reports are produced at more frequent intervals than management reports. 
C) Financial reports reflect past performance whereas management reports are concerned with the future as well as the past. 
D) Financial reports provide more forecast data than management reports.

Question 2

The most complete description of the planning process for a business is:

Accepted Answer

A) setting objectives and short-term plans. 
B) setting objectives, long-term plans, and short-term plans. 
C) setting objectives and detailed budgets. 
D) setting long-term objectives and long-term plans. 
A) setting objectives and short-term plans. 
B) setting objectives, long-term plans, and short-term plans. 
C) setting objectives and detailed budgets. 
D) setting long-term objectives and long-term plans.

Question 3

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

Question 4

Why do businesses tend to resist providing forecast data to those outside the organisation?

Accepted Answer

A) because it is too costly 
B) because it is too difficult 
C) because the data is inaccurate 
D) because of the fear of the loss of competitive advantage 
A) because it is too costly 
B) because it is too difficult 
C) because the data is inaccurate 
D) because of the fear of the loss of competitive advantage

Question 5

An advantage of a partnership compared to a sole proprietorship is:

Accepted Answer

A) mutual agency. 
B) sharing of profits. 
C) greater access to funds. 
D) Both B and C. 
A) mutual agency. 
B) sharing of profits. 
C) greater access to funds. 
D) Both B and C.

Question 6

Advantages of operating as a sole proprietor are:

Accepted Answer

A) total control by the owner over all decisions. 
B) low start-up costs. 
C) limited liability. 
D) Both A and B 
A) total control by the owner over all decisions. 
B) low start-up costs. 
C) limited liability. 
D) Both A and B

Question 7

Calculate the cash available at the end of the day if cash at the beginning is $650, receipts from customers are $400 and payments to suppliers are $300.

Accepted Answer

A) $75.0 
B) $200 
C) $750 
D) $1 400 
A) $75.0 
B) $200 
C) $750 
D) $1 400

Question 8

The planning and control process within an entity means that:

Accepted Answer

A) business can respond to variances between plans and actual performance. 
B) business is only concerned with actual performance. 
C) plans are followed rigidly at all times. 
D) plans and actual performance do not vary. 
A) business can respond to variances between plans and actual performance. 
B) business is only concerned with actual performance. 
C) plans are followed rigidly at all times. 
D) plans and actual performance do not vary.

Question 9

What does a statement of financial position show?

Accepted Answer

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

Question 10

The main source of information for shareholders is:

Accepted Answer

A) departmental reports. 
B) management reports. 
C) external reports. 
D) internal reports. 
A) departmental reports. 
B) management reports. 
C) external reports. 
D) internal reports.

Question 11

Which of the following is not a use of accounting information?

Accepted Answer

A) It helps uses make decisions relating to the business. 
B) It reduces uncertainty about the business's financial position. 
C) It helps answer questions about availability of funds to meet the business's obligations. 
D) It can accurately predict future profits. 
A) It helps uses make decisions relating to the business. 
B) It reduces uncertainty about the business's financial position. 
C) It helps answer questions about availability of funds to meet the business's obligations. 
D) It can accurately predict future profits.

Question 12

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 13

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 14

Standardised formats are most relevant to:

Accepted Answer

A) departmental reports. 
B) management reports. 
C) external financial reports. 
D) internal reports. 
A) departmental reports. 
B) management reports. 
C) external financial reports. 
D) internal reports.

Question 15

Business managers, even if not accountants, need familiarity with basic accounting information to help with decisions about:

Accepted Answer

A) what products to sell. 
B) whether or not to invest in certain projects. 
C) whether to expand or cease operations. 
D) All of the above are correct 
A) what products to sell. 
B) whether or not to invest in certain projects. 
C) whether to expand or cease operations. 
D) All of the above are correct

Question 16

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 17

Which accounting report is prepared at a particular point of time rather than over a period of time?

Accepted Answer

A) Statement of comprehensive income 
B) Statement of change in owners' equity 
C) Statement of financial position 
D) Both B and C 
A) Statement of comprehensive income 
B) Statement of change in owners' equity 
C) Statement of financial position 
D) Both B and C

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

How frequently is the set of financial reports made available for external publication by an entity typically produced?

Accepted Answer

A) Fortnightly 
B) Yearly 
C) Weekly 
D) Daily 
A) Fortnightly 
B) Yearly 
C) Weekly 
D) Daily

Question 20

Management accounting reports are principally used by managers to:

Accepted Answer

A) report to shareholders. 
B) reconcile with the financial accounting reports. 
C) calculate the amount of taxation owed to the government. 
D) control the operations of an entity on a regular basis. 
A) report to shareholders. 
B) reconcile with the financial accounting reports. 
C) calculate the amount of taxation owed to the government. 
D) control the operations of an entity on a regular basis.

Which statement is correct?

The most complete description of the planning process for a business is:

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.

Why do businesses tend to resist providing forecast data to those outside the organisation?

An advantage of a partnership compared to a sole proprietorship is:

Advantages of operating as a sole proprietor are:

Calculate the cash available at the end of the day if cash at the beginning is $650, receipts from customers are $400 and payments to suppliers are $300.

The planning and control process within an entity means that:

What does a statement of financial position show?

The main source of information for shareholders is:

Which of the following is not a use of accounting information?

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

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

Standardised formats are most relevant to:

Business managers, even if not accountants, need familiarity with basic accounting information to help with decisions about:

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

Which accounting report is prepared at a particular point of time rather than over a period of time?

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

How frequently is the set of financial reports made available for external publication by an entity typically produced?

Management accounting reports are principally used by managers to:

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

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

Planning and Budgeting

Capital Investment Decisions

Filters

Exam 1: Introduction to Accounting

Which statement is correct?

The most complete description of the planning process for a business is:

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.

Why do businesses tend to resist providing forecast data to those outside the organisation?

An advantage of a partnership compared to a sole proprietorship is:

Advantages of operating as a sole proprietor are:

Calculate the cash available at the end of the day if cash at the beginning is $650, receipts from customers are $400 and payments to suppliers are $300.

The planning and control process within an entity means that:

What does a statement of financial position show?

The main source of information for shareholders is:

Which of the following is not a use of accounting information?

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

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

Standardised formats are most relevant to:

Business managers, even if not accountants, need familiarity with basic accounting information to help with decisions about:

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

Which accounting report is prepared at a particular point of time rather than over a period of time?

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

How frequently is the set of financial reports made available for external publication by an entity typically produced?

Management accounting reports are principally used by managers to:

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

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

Planning and Budgeting

Capital Investment Decisions

Filters