Question 1

Which statement relating to ethics is not correct?

Accepted Answer

A)  A high standard of ethical behaviour is in the long-term interest of businesses. 
B)  The accounting professional bodies have set down rules of professional conduct for their members. 
C)  Ethics is concerned with whether human actions are proper or improper. 
D)  Ethical decisions are always easy to make. 
A)  A high standard of ethical behaviour is in the long-term interest of businesses. 
B)  The accounting professional bodies have set down rules of professional conduct for their members. 
C)  Ethics is concerned with whether human actions are proper or improper. 
D)  Ethical decisions are always easy to make.

Question 2

Which statement is incorrect?

Accepted Answer

A)  An audit committee acts as a corporate governance device. 
B)  An audit committee helps to ensure the independence of the internal audit process. 
C)  In Australia large companies must have an audit committee. 
D)  The audit committee should strive to ensure continual improvement in accountability. 
A)  An audit committee acts as a corporate governance device. 
B)  An audit committee helps to ensure the independence of the internal audit process. 
C)  In Australia large companies must have an audit committee. 
D)  The audit committee should strive to ensure continual improvement in accountability.

Question 3

The job of the modern accountant is a challenging one. The most critical requirement is:

Accepted Answer

A)  neatness. 
B)  punctuality. 
C)  ability to manage change. 
D)  ability to add up. 
A)  neatness. 
B)  punctuality. 
C)  ability to manage change. 
D)  ability to add up.

Question 4

The area of accounting that deals with the preparation of plans and forecasts of future operations is called:

Accepted Answer

A)  auditing. 
B)  costing. 
C)  budgeting. 
D)  liquidating. 
A)  auditing. 
B)  costing. 
C)  budgeting. 
D)  liquidating.

Question 5

Special purpose financial statements provide information mainly for the use of which of these parties?

Accepted Answer

The answer of Special purpose financial statements provide information mainly...

Question 6

The two broad branches into which accounting is divided are:

Accepted Answer

A)  cash and accrual. 
B)  management and financial. 
C)  taxation and financial. 
D)  commercial and non-commercial. 
A)  cash and accrual. 
B)  management and financial. 
C)  taxation and financial. 
D)  commercial and non-commercial.

Question 7

For HT Computers Ltd how many of the following are internal decision makers: bank manager, production manager, human resource manager, chief executive officer?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 8

The area of accounting that deals with the collection, allocation and control of costs is called:

Accepted Answer

A)  public accounting. 
B)  cost accounting. 
C)  internal auditing. 
D)  general accounting. 
A)  public accounting. 
B)  cost accounting. 
C)  internal auditing. 
D)  general accounting.

Question 9

Which type of information about J Company would be of most interest to its trade creditors?

Accepted Answer

A)  Ability to pay debts as they fall due. 
B)  Annual dividends. 
C)  Taxable income. 
D)  Continuity of orders for the factory. 
A)  Ability to pay debts as they fall due. 
B)  Annual dividends. 
C)  Taxable income. 
D)  Continuity of orders for the factory.

Question 10

Decision makers who are responsible for planning and controlling the operations of an organisation from within are known as:

Accepted Answer

A)  internal decision makers. 
B)  external decision makers. 
C)  primary decision makers. 
D)  general decision makers. 
A)  internal decision makers. 
B)  external decision makers. 
C)  primary decision makers. 
D)  general decision makers.

Question 11

How many of the following decisions would be made by internal as opposed to external decision makers: setting production targets, product pricing, choosing whether to lease or buy assets, and monitoring compliance with company reporting requirements?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 12

Which of the following is the true statement?

Accepted Answer

A)  Accounting information for decision making is concerned with the past. 
B)  Internal and external users of accounting information generally require similar information. 
C)  Non-accounting information is always more important in decision making than accounting information. 
D)  Accountants are heavily involved in the budgeting process for a business entity. 
A)  Accounting information for decision making is concerned with the past. 
B)  Internal and external users of accounting information generally require similar information. 
C)  Non-accounting information is always more important in decision making than accounting information. 
D)  Accountants are heavily involved in the budgeting process for a business entity.

Question 13

How many of the following decisions would be made by external as opposed to internal decision makers: investing funds in the business, assessing an application for a loan, expanding the product range, and hiring staff?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 14

Accountants who administer or wind-up businesses unable to pay debts specialise in the area of:

Accepted Answer

A)  accounting systems. 
B)  taxation. 
C)  insolvency. 
D)  general accounting. 
A)  accounting systems. 
B)  taxation. 
C)  insolvency. 
D)  general accounting.

Question 15

Accounting is a profession that has evolved in response to society's need for economic information to help people make:

Accepted Answer

A)  products. 
B)  progress. 
C)  decisions. 
D)  money. 
A)  products. 
B)  progress. 
C)  decisions. 
D)  money.

Question 16

Which of the following has been the most influential in redefining the role of accountants as analysts and decision makers rather than as mainly number-crunchers?

Accepted Answer

A)  The collapse of major company groups. 
B)  The trend towards globalisation. 
C)  Developments in information technology. 
D)  The increase in demand for non-financial information. 
A)  The collapse of major company groups. 
B)  The trend towards globalisation. 
C)  Developments in information technology. 
D)  The increase in demand for non-financial information.

Question 17

Which type of information about J Company would be of most interest to the Australian Taxation Office?

Accepted Answer

A)  Sales. 
B)  Taxable income. 
C)  Continuity of orders for the factory. 
D)  Compliance with accounting standards. 
A)  Sales. 
B)  Taxable income. 
C)  Continuity of orders for the factory. 
D)  Compliance with accounting standards.

Question 18

The term 'special purpose financial statements' refers to the fact that the information in the reports is:

Accepted Answer

A)  available to everybody who requires specialised information. 
B)  useful for special purposes but not in making specific decisions. 
C)  prepared for users who have specialised needs and have the authority to obtain the required information. 
D)  prepared to provide general information for use by all users. 
A)  available to everybody who requires specialised information. 
B)  useful for special purposes but not in making specific decisions. 
C)  prepared for users who have specialised needs and have the authority to obtain the required information. 
D)  prepared to provide general information for use by all users.

Question 19

Financial reports intended to serve the diverse needs of a variety of external user groups who are unable to obtain their own accounting information are known as:

Accepted Answer

A)  general purpose financial statements. 
B)  external purpose financial statements. 
C)  management reports. 
D)  external user reports. 
A)  general purpose financial statements. 
B)  external purpose financial statements. 
C)  management reports. 
D)  external user reports.

Question 20

The distinguishing feature of accounting for not-for-profit organisations is the absence of:

Accepted Answer

A)  the profit motive. 
B)  accounting systems. 
C)  revenue. 
D)  paid employees. 
A)  the profit motive. 
B)  accounting systems. 
C)  revenue. 
D)  paid employees.

Exam 1: Decision Making and the Role of Accounting

Which statement relating to ethics is not correct?

Which statement is incorrect?

The job of the modern accountant is a challenging one. The most critical requirement is:

The area of accounting that deals with the preparation of plans and forecasts of future operations is called:

Special purpose financial statements provide information mainly for the use of which of these parties?

The two broad branches into which accounting is divided are:

For HT Computers Ltd how many of the following are internal decision makers: bank manager, production manager, human resource manager, chief executive officer?

The area of accounting that deals with the collection, allocation and control of costs is called:

Which type of information about J Company would be of most interest to its trade creditors?

Decision makers who are responsible for planning and controlling the operations of an organisation from within are known as:

How many of the following decisions would be made by internal as opposed to external decision makers: setting production targets, product pricing, choosing whether to lease or buy assets, and monitoring compliance with company reporting requirements?

Which of the following is the true statement?

How many of the following decisions would be made by external as opposed to internal decision makers: investing funds in the business, assessing an application for a loan, expanding the product range, and hiring staff?

Accountants who administer or wind-up businesses unable to pay debts specialise in the area of:

Accounting is a profession that has evolved in response to society's need for economic information to help people make:

Which of the following has been the most influential in redefining the role of accountants as analysts and decision makers rather than as mainly number-crunchers?

Which type of information about J Company would be of most interest to the Australian Taxation Office?

The term 'special purpose financial statements' refers to the fact that the information in the reports is:

Financial reports intended to serve the diverse needs of a variety of external user groups who are unable to obtain their own accounting information are known as:

The distinguishing feature of accounting for not-for-profit organisations is the absence of:

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle Closing and Reversing Entries

Accounting for Retailing

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and Control

Cost-Volume-Profit Analysis for Decision Making

Budgeting for Planning and Control

Performance Evaluation for Managers

Differential Analysis, Profitability Analysis and Capital Budgeting

Partnerships: Formation, Operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation, Disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

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