Question 1

What is another name commonly used for the balance sheet?

Accepted Answer

A) Profit and loss statement 
B) Statement of financial performance 
C) Statement of financial position 
D) Statement of change in owners' equity 
A) Profit and loss statement 
B) Statement of financial performance 
C) Statement of financial position 
D) Statement of change in owners' equity

Question 2

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.

Question 3

Which of these is a reason why achieving the maximum possible profit in a particular year may not be in the best interests of a business?

Accepted Answer

A) Concentrating on the short-term may have detrimental effects in the long-term. 
B) It may be achieved by causing environmental problems, which give the business a bad reputation. 
C) If it is achieved with high-risk strategies, such as excessive reliance on borrowings, it could lead to disaster in the longer term. 
D) All of the above 
A) Concentrating on the short-term may have detrimental effects in the long-term. 
B) It may be achieved by causing environmental problems, which give the business a bad reputation. 
C) If it is achieved with high-risk strategies, such as excessive reliance on borrowings, it could lead to disaster in the longer term. 
D) All of the above

Question 4

The principle whereby each partner is responsible for the business actions of all other partners when the actions are carried out in the normal course of business, is known as:

Accepted Answer

A) the rule in Garner versus Murray. 
B) unlimited liability. 
C) mutual agency. 
D) perpetual life. 
A) the rule in Garner versus Murray. 
B) unlimited liability. 
C) mutual agency. 
D) perpetual life.

Question 5

Which test determines if an item of accounting information is worthwhile collecting?

Accepted Answer

A) Cost test 
B) Cost/benefit test 
C) Worthwhile test 
D) Validation test 
A) Cost test 
B) Cost/benefit test 
C) Worthwhile test 
D) Validation test

Question 6

Knowledge of the objectives or mission of a business will be most useful in assisting users of financial reports in understanding:

Accepted Answer

A) the liquidity position of the business. 
B) why it is taking longer than it should to collect money from accounts receivable. 
C) the financial reporting cycle. 
D) what the business is trying to achieve. 
A) the liquidity position of the business. 
B) why it is taking longer than it should to collect money from accounts receivable. 
C) the financial reporting cycle. 
D) what the business is trying to achieve.

Question 7

Which accounting reports are concerned with measuring flows over a period of time?

Accepted Answer

A) Statement of comprehensive income and statement of financial position 
B) Statement of comprehensive income and statement of cash flows 
C) Statement of cash flows and statement of financial position 
D) Statement of comprehensive income, statement of cash flows and statement of financial position 
A) Statement of comprehensive income and statement of financial position 
B) Statement of comprehensive income and statement of cash flows 
C) Statement of cash flows and statement of financial position 
D) Statement of comprehensive income, statement of cash flows and statement of financial position

Question 8

In comparison to a company, a disadvantage of operating as a partnership is:

Accepted Answer

A) unlimited liability. 
B) limited life. 
C) mutual agency. 
D) all of the above. 
A) unlimited liability. 
B) limited life. 
C) mutual agency. 
D) all of the above.

Question 9

Which statement is true?

Accepted Answer

A) The statement of cash flows explains the changes between the statement of comprehensive income and the statement of financial position. 
B) The statement of financial position links two statements of comprehensive income. 
C) The statement of cash flows summarises the movements in the bank account over an accounting period. 
D) None of the statements is true 
A) The statement of cash flows explains the changes between the statement of comprehensive income and the statement of financial position. 
B) The statement of financial position links two statements of comprehensive income. 
C) The statement of cash flows summarises the movements in the bank account over an accounting period. 
D) None of the statements is true

Question 10

Which of the following does NOT inform the body of accounting knowledge?

Accepted Answer

A) Taxation law 
B) Relevant research 
C) Professional practice 
D) Application 
A) Taxation law 
B) Relevant research 
C) Professional practice 
D) Application

Question 11

Financial accounting reports concentrate on:

Accepted Answer

A) current events. 
B) current and future events. 
C) past events. 
D) future events. 
A) current events. 
B) current and future events. 
C) past events. 
D) future events.

Question 12

Control is best defined as:

Accepted Answer

A) making events conform to plan. 
B) making the directors perform according to plan. 
C) making the employees work harder. 
D) giving orders. 
A) making events conform to plan. 
B) making the directors perform according to plan. 
C) making the employees work harder. 
D) giving orders.

Question 13

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 14

As a result of increased globalisation:

Accepted Answer

A) there has been less harmonisation of accounting rules across countries. 
B) accounting rules have a more international reach. 
C) users of accounting information are more likely to be based in the same county as the business has its base. 
D) accountants need less familiarity with accounting rules of other countries. 
A) there has been less harmonisation of accounting rules across countries. 
B) accounting rules have a more international reach. 
C) users of accounting information are more likely to be based in the same county as the business has its base. 
D) accountants need less familiarity with accounting rules of other countries.

Question 15

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 16

The two threshold learning objectives that this book emphasises most are:

Accepted Answer

A) knowledge and application skills. 
B) judgement and self-management. 
C) teamwork and communication, and self-management. 
D) knowledge and judgement. 
A) knowledge and application skills. 
B) judgement and self-management. 
C) teamwork and communication, and self-management. 
D) knowledge and judgement.

What is another name commonly used for the balance sheet?

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

Which of these is a reason why achieving the maximum possible profit in a particular year may not be in the best interests of a business?

The principle whereby each partner is responsible for the business actions of all other partners when the actions are carried out in the normal course of business, is known as:

Which test determines if an item of accounting information is worthwhile collecting?

Knowledge of the objectives or mission of a business will be most useful in assisting users of financial reports in understanding:

Which accounting reports are concerned with measuring flows over a period of time?

In comparison to a company, a disadvantage of operating as a partnership is:

Which statement is true?

Which of the following does NOT inform the body of accounting knowledge?

Financial accounting reports concentrate on:

Control is best defined as:

A common aspect of questionable figures in financial reports is:

As a result of increased globalisation:

Which of these groups is a user of financial information?

The two threshold learning objectives that this book emphasises most are:

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

What is another name commonly used for the balance sheet?

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

Which of these is a reason why achieving the maximum possible profit in a particular year may not be in the best interests of a business?

The principle whereby each partner is responsible for the business actions of all other partners when the actions are carried out in the normal course of business, is known as:

Which test determines if an item of accounting information is worthwhile collecting?

Knowledge of the objectives or mission of a business will be most useful in assisting users of financial reports in understanding:

Which accounting reports are concerned with measuring flows over a period of time?

In comparison to a company, a disadvantage of operating as a partnership is:

Which statement is true?

Which of the following does NOT inform the body of accounting knowledge?

Financial accounting reports concentrate on:

Control is best defined as:

A common aspect of questionable figures in financial reports is:

As a result of increased globalisation:

Which of these groups is a user of financial information?

The two threshold learning objectives that this book emphasises most are:

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