1,2 SELF QUIZ - ACC3AFA PDF

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The 'bonus plan hypothesis' of Positive Accounting Theory suggests managers of firms with bonus plans tied to reported income are more likely to use accounting methods that: Select one: a. Increase prior period reported income b. Increase current period reported income c. Increase future period reported income d. None of the given options are correct One criticism of Positive Accounting Theory is that it tells us nothing about: Select one: a. Whether the practice or method being used is the most efficient b. Whether the practice or method being used is the most equitable c. Which method a firm should use d. All of the given options are correct.

A manager electing to adopt a depreciation method that increases income, but does not reflect the actual use of the asset, is consistent with: Select one: a. The efficiency perspective of Positive Accounting Theory b. The opportunistic perspective of Positive Accounting Theory c. Both the opportunity and the efficiency perspectives of Positive Accounting Theory d.

Neither the opportunity nor the efficiency perspectives of Positive Accounting Theory. The 'debt/equity hypothesis' of Positive Accounting Theory predicts which of the following? Select one: a. The higher the firm's debt/equity ratio, the more likely managers are to use accounting methods that lower income. b. The lower the firm's debt/equity ratio, the more likely managers are to use accounting methods that increase income. c. The higher the firm's debt/equity ratio, the more likely managers are to use accounting methods that increase income. d. None of the given options are correct.

Firms are subject to political costs when: Select one: a. They are quite small and have little political influence. b. They choose accounting policies that best reflect the performance of the firm. c. They record high profits and share those profits in the form of increased wages.

d. They are highly visible, in the media or other arenas, often as a result of high profits.

Which of the following is a problem with Positive Accounting Theory? Select one: a. It is not testable. b. It has been empirically discredited. c. It contributes little to improving accounting practice.

d. None of the given options are correct.

Which of the following is a characteristic of capture theory? Select one: a. In deciding on a particular regulation, regulators consider the impact on key voters and on election finances. b. The regulated subsequently try to control the regulator, to achieve their self-interest. c. The regulator is a neutral arbiter, and does not let its own interest impact on its rule-making process. d. None of the given options is correct.

An example of political costs under the PAT(positive accounting theory) perspective is: Select one: a. Contributions to political parties. b. Costs associated with increased wage claims by trade unions. c. The cost of remaining largely unnoticed by government regulatory agencies. d. Wage and salary deductions paid to unions.

Debt contracts will: Select one: a. Stipulate in advance all accounting methods to be used by managers. b.

Ensure management has some discretionary ability to loosen restrictions negotiated by debt-holders. c. Encourage the practice of claim dilution to ensure debts are repaid. d. Occasionally restrict accounting techniques used by a firm.

The 'political cost hypothesis' of Positive Accounting Theory suggests which of the following? Select one: a. Large firms are more likely to use accounting choices that reduce reported profits. b. Small firms are more likely to use accounting choices that reduce reported profits. c. Neither large nor small firms are more likely to use accounting choices that reduce reported profits. d. Both large and small firms are more likely to use accounting choices that reduce reported profits.

QUIZ-2 Institutional Theory suggests which of the following? Select one: a. While organisational structures are initially varied, they are gradually homogenised by competition, the state and professions.

b. While organisational structures are initially homogenous, they are gradually varied by competition, the State and professions.

c.

The organisational structure is determined by institutional factors such as management style and organisational culture.

d. The organisational structure is determined by the organisation's most powerful stakeholders.

Feedback The correct answer is: While organisational structures are initially varied, they are gradually homogenised by competition, the state and professions. Question 2 Correct Mark 1.00 out of 1.00 Flag question

Question text Critical researchers believe that accounting information

Select one: a. Is used by the elite to maintain their power

b. Benefits neither the rich nor poor

c. Is neutral and unbiased

d. Challenges existing social orders

Feedback The correct answer is:

Is used by the elite to maintain their power

Question 3 Correct Mark 1.00 out of 1.00 Flag question

Question text A machine with a carrying amount of $9000 has a net selling price of $8000. The replacement cost of this asset is $10 000 and the present value of future cash flows is $9500. What is the deprival value of the machine? Select one: a. $0 b. $8000 c. $9000 d. $9500

Feedback The correct answer is: $9500 Question 4 Correct Mark 1.00 out of 1.00 Flag question

Question text Which of the following is a unique characteristic of Exit Price Accounting in comparison to other alternative accounting models?

Select one: a. It attempts to recognise the changes in value of specific assets on the Balance Sheet.

b. All gains (realised and unrealised) are treated as part of profits.

c. It include an adjustment to take into account changes in purchasing power which it calls a ‘capital maintenance adjustment’

d. All of the given options are correct.

Feedback The correct answer is:

All gains (realised and unrealised) are treated as part of

profits.

Question 5 Correct Mark 1.00 out of 1.00 Flag question

Question text The general aim of the current-cost accounting theory is

Select one: a. to provide calculation of income which, after adjusting for changing prices, could be withdrawn from the entity and yet still leave the physical capital of the entity intact.

b. to provide a statement of financial position valuation method that presents a reflection of the capacity of the entity to adapt to changing conditions.

c. to provide calculation of income which, after adjusting for changing prices, could be withdrawn from the entity and yet still leave the financial capital of the entity intact.

d. to provide a statement of financial position valuation method that allows a more reliable basis for decision making by providing current costs.

Feedback

The correct answer is: to provide calculation of income which, after adjusting for changing prices, could be withdrawn from the entity and yet still leave the physical capital of the entity intact. Question 6 Correct Mark 1.00 out of 1.00 Flag question

Question text The difference between the managerial and moral perspectives of Stakeholder Theory is that: Select one: a. The moral perspective is empirically testable b. The moral perspective is more 'organisation-centred’ c. The managerial perspective is empirically testable d. The managerial perspective holds that all stakeholders have certain minimum rights that must not be violated

Feedback The correct answer is: The managerial perspective is empirically testable Question 7 Correct Mark 1.00 out of 1.00 Flag question

Question text The difference between Positive Accounting Theory and Legitimacy Theory is that: Select one: a. Legitimacy Theory does not rely on the assumption that all action is driven by individual self-interest. b. Legitimacy Theory makes no assumptions about the efficiency of markets. c. Legitimacy Theory suggests that organisations have a ‘social contract’ with society. d. All of the given options are correct.

Feedback The correct answer is: All of the given options are correct.

Question 8 Correct Mark 1.00 out of 1.00 Flag question

Question text Managerial Stakeholder Theory suggests that annual reports will be used to: Select one: a. Gain the support of powerful stakeholders. b. Report on the activities of management with respect to each shareholder. c. Explain why profits may have been sacrificed in order to respect the minimum rights of some stakeholders d. All of the given options are correct.

Feedback The correct answer is: Gain the support of powerful stakeholders. Question 9 Correct Mark 1.00 out of 1.00 Flag question

Question text According to Legitimacy Theory, the annual report is: Select one: a. A means to assist users in legitimately allocating scarce resources b. A tool to legitimise the ongoing operations of the organisation c. A legitimate account of the activities of the organisation for the period d. All of the given options are correct.

Feedback The correct answer is: A tool to legitimise the ongoing operations of the organisation Question 10 Correct Mark 1.00 out of 1.00 Flag question

Question text An organisation disclosing social and environmental information in response to societal expectations is an example of:

Select one: a. Normative isomorphism

b. Coercive isomorphism

c. Mimetic isomorphism

d. None of the given options are correct.

Feedback The correct answer is:

Normative isomorphism...