Chapter 1-4 weekly Multiple choice Quiz\'s with answers PDF

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Chapter 1-4 weekly Multiple choice Quiz's with answers ...

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CHAPTER ONE QUIZ

1. Learning objective 1.5 - identify the potential users of accounting information Who of the following is not an external decision maker? a. Managing director The managing director is an internal and not an external decision maker to the organisation. b. Shareholder c. Government regulator d. Creditor 2. Learning objective 1.5 - identify the potential users of accounting information. Decision makers who are responsible for planning and controlling the operations of an organisation from within are known as: a. general decision makers. b. internal decision makers. Examples of such decisions include what products to stock or make, internal budget targets, and what key performance indicators to set for employees, as well as whether to invest in new equipment or buildings. c. external decision makers. d. primary decision makers.

3. Learning objective 1.8 - compare accounting information for management and external users. The two broad branches into which accounting is divided are: a. management and financial b. commercial and non-commercial. c. cash and accrual. d. taxation and financial 4. Learning Objective 1.10 - identify the different areas of the economy in which accountants work. Which of these is not one of the four areas in which public accountants tend to specialise? a. Cost accounting. Cost accounting is an area of management accounting. Management accountants typically work inside firms, rather than as public accountants. b. Taxation services. c. External Audit. d. Insolvency Feedback 5. Learning Objective 1.1 the dynamic environment in which accountants work. The job of the modern accountant is a challenging one. The most critical requirement is: a. punctuality b. ability to manage change Accountants operate in a dynamic environment in which information technology drives all aspects of business including the capture of financial transactions and information, and on a

broader level trends towards globalisation and the demand for non-financial information. The ability to manage such change is critical to the job of the accountant in the longer term. c. ability to add up. d. neatness.

6. Learning Objective 1.9 - summarise how the accounting profession is organised in Australia. In the accounting profession the initials CPA stand for: a. Certified Practising Accountant b. Complying Practicing Accountant. c. Certified Professional Accountant. d. Company Professional Accountant.

7. Learning Objective 1.8 - compare accounting information for management and external users. Which of these is not a characteristic of financial accounting? Select one: a. Format determined by user. Management accounting is the branch of accounting where the format of the reports produced can be determined by the user to suit their individual requirements. In financial accounting, all reports must comply with the prescribed formats for Income Statements, Balance Sheets, Statements of Equity and Cash Flow Statements. Also certain other information is required to be disclosed. b. Compliance with accounting standards. c. Annual Reporting d. Verification by audit.

8. Learning Objective 1.9 - summarise how the accounting profession is organised in Australia. Which one of the following is not a major professional accounting body in Australia: a. IPA b. CAANZ c. LLBB d. CPA Feedback 9. Learning objective 1.11 - identify the importance of ethics in business and accounting and how to recognise and handle ethical dilemmas as part of the decision-making process. Which statement relating to ethics is not correct? a. The accounting professional bodies have set down rules of professional conduct for their members. b. Ethical decisions are always easy to make. This statement is not correct. Ethical decisions are often complex and take on the nature of a dilemma.

c. Ethics is concerned with whether human actions are proper or improper. d. A high standard of ethical behaviour is in the long-term interest of businesses.

10. Learning Objective 1.10 - identify the different areas of the economy in which accountants work. The area of accounting that deals with the collection, allocation and control of costs is called: a. cost accounting b. public accounting c. internal auditing d. general accounting

11. Learning objective 1.2 - the nature of decisions and the decision-making process There are four steps in the accounting process. Which of the steps is most concerned with the classification and summarising of financial data? a. Communication. b. Recording When we record a transaction we must classify the financial event as it affects assets, liabilities, capital, revenues or expenses. Such classifications allow us to summarise our financial data, for example the total amount of assets . c. Measurement d. Identification

12. Learning objective 1.5 identify the potential users of accounting information. Which type of information about a mobile phone manufacturer would be of most interest to its production manager? a. Annual dividends. b. Compliance with accounting standards c. Continuity of orders for the factory. d. Taxable income. 13. Learning objective 1.10 - identify the different areas of the economy in which accountants work. In the accounting profession what do the initials CFO stand for? a. Chief financial officer b. Certified financial officer c. Cosmic flying object d. Company financial organiser

14. Learning Objective 1.6 - apply information to make basic economic decisions. Which of the following is the true statement? a. Internal and external users of accounting information generally require similar information. b. Accounting information for decision making is concerned with the past. c. Accountants are heavily involved in the budgeting process for a business entity.

d. Non-accounting information is always more important in decision making than accounting information. Feedback 15. Learning Objective 1.10 - identify the different areas of the economy in which accountants work. Accountants who administer or wind-up businesses unable to pay debts specialise in the area of: a. general accounting b. insolvency c. taxation d. accounting systems 16. Learning objective 1.7 - describe the role of accounting ifnromation in the decision-making process. Which type of information about J Company would be of most interest to the Australian Taxation Office? Select one: a. Taxable income b. The number of orders received for products manufactured. c. Compliance with accounting standards. d. Sales. 17. Learning objective 1.11 - identify the improtance of ethics in business and accounting and how to recognise and handle ethical dilemmas as part fo the decision-making process. The rules set down by the professional accounting bodies which establish standards of conduct for their members are known as: Select one: a. a code of professional conduct b. accounting standards. c. a code of criminal conduct. d. a code of competence. 18. Learning objective 1.5 identify the potential users of accounting information. Which of the four stages of the accounting process is considered to require the most extensive training, experience and judgement? Select one: a. Measuring. b. Planning. c. Communicating. d. Identifying 19. Learning objective 1.3 - the range of economic decisions made in the marketplace. Which of these is not an economic decision? a. Choosing an internet provider b. Taking out a loan. c. Supporting a sports team.

This is not an economic decision because it involves no reciprocity of exchange. There is no financial transaction. d. Purchasing a mobile phone. 20. Learning Objective 1.4 the nature of accounting and its main functions The term used to describe the economic events which are the inputs of the accounting information system is: a. deals b. agreements c. transactions d. contracts 21. Learning Objective 1.10 - identify the different areas of the economy in which accountants work. Which of these is not one of the four areas in which public accountants tend to specialise? Select one: a. External Audit. b. Cost accounting. Cost accounting is an area of management accounting. Management accountants typically work inside firms, rather than as public accountants. c. Taxation services. d. Insolvency 22. Learning objective 1.5 identify the potential users of accounting information. External decision makers can be divided into four groups. To which of these groups do investors and creditors belong? a. Reviewers and overseers. b. Managers and governing bodies. c. Financial institutions. d. Resource providers 23. Learning objective 1.4 - the nature of accounting and its main functions Select the correct answer to complete the following sentence. Accounting is defined as the process of identifying, measuring, recording and ___________ economic information to permit informed judgements and economic decisions by users of the information. Select one: a. observing b. processing c. certifying d. communicating We identify, measure and record economic information in order to communicate it to informed users so that they can make judgements and economic decisions. 24. Learning objective 1.7 - describe the role of accounting information in the decision making process. Which type of information about J Company would be of most interest to its trade creditors?

Select one: a. Annual dividends. b. Taxable income. c. Continuity of orders for the factory. d. Ability to pay debts as they fall due. Trade creditors would be interested in this because everyone wants to be paid on time. 25. Learning objective 1.5 identify the potential users of accounting information. External decision makers: Select one: a. operate from branch locations. b. reside overseas c. must be owners. d. exist outside the organisation but have an interest in it. Examples are shareholders, creditors, employees, government agencies such as the taxation office, employees, trade unions and environmental groups etc. 26. Learning objective 1.4 the nature of accounting and its main functions Accounting is a profession that has evolved in response to society's need for economic information to help people make: Select one: a. products. b. decisions Accountants provide financial information to assist members of society to make economic decisions. c. money d. progress 27. Learning objective 1.8 - compare accounting information for management and external users. How many of the following are differences between management and financial accounting? - Types of reports produced - Frequency of reports - Format of reports - The users of reports Select one: a. Four b. one c. Two d. Three 28. Learning Objective 1.8 - compare accounting informaiton for management and external users. Financial accounting is the area of accounting concerned with providing information to __________ decision makers of the organisation. Select one: a. important b. external c. advisory

d. internal Feedback 29. Learning objective 1.10 - identify the different areas of the economy in which accountants work. Accounting work involving the independent examination and verification of financial reports is known as: Select one: a. budgeting b. auditing c. consulting d. advising 30. Learning objective 1.10 - identify the different areas of the economy in which accountants work. The area of accounting that deals with the preparation of plans and forecasts of future operations is called; Select one: a. auditing b. costing c. budgeting d. liquidating 31. Learning objective 1.10 - identify the different areas of the economy in which accountants work. The distinguishing feature of accounting for not-for-profit organisations is the absence of: Select one: a. Paid employees. b. Revenue c. the profit motive d. accounting systems 32. The nature of decisions and the decision making process 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? Select one: a. The trend towards gloablisaton b. Developments in information technology. Developments in information technology enable and support the formation of company groups, processes of globalisation and the provision of non-financial information. Developments in information technology is the most fundamental of the answers. c. The increase in demand for non-financial information. d. The collapse of major company groups. 33. Learning objective 1.5 - identify the potential users of accounting information 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: Select one: a. management reports

b. general purpose financial statements c. external purpose financial statements d. external user reports

Chapter two quiz: 1. Which of the following statements concerning equity is true? a. It is the owner's claim to the assets of the entity after deducting liabilities. b. Assets + Liabilities = Equity. c. It is fixed at the amount initially contributed when the business was established. d. It is decreased by profit. 2. Which statement is not true? Select one: a. The basic layout for the account form balance sheet is assets = liabilities + equity. b. The account form balance sheet lists all the elements in one column. c. In Australia the narrative form balance sheet is the most common. d. The balance sheet can be presented in account form or narrative form. 3. The assets of Aelee's business increased by $40 000 and the liabilities increased by $10 000 during the current year. If the profit for this period was $25 000, what additional contribution or withdrawal was made by the owner? (Assume only a contribution OR a withdrawal was made, not both). Select one: a. Drawings $5 000 b. Contribution $10 000 c. Drawings $10 000 d. Contribution $5 000 4. ___________ is/are resources controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. Select one: a. Income b. Liabilities c. Assets d. Equity 5. In order to avoid later disputes it is desirable that a partnership agreement: Select one: a. is in writing While an agreement may be verbal, it is desirable for there to be a written partnership agreement. b. should set up the partnership as a separate legal entity. c. Should have the partners sharing profits and losses equally . d. should set out in detail how all likely transactions are to be recorded.

6. Maintaining a satisfactory relationship between an entity's resource inputs and its output of product or services is referred to as: Select one: a. efficiency b. organising

c. planning. d. effectiveness 7. How well an entity attains its goals is referred to as: Select one: a. effectiveness b. Organising. c. efficiency d. planning. 8. If income is $180 000, rent expense is $120 000 and advertising expense is $10 500, profit or loss is which of the following? Select one: a. $49 500 loss b. $49 500 profit c. $300 500 loss d. $300 500 profit 9. The following balances were taken from the accounts of Adelaide Enterprises: ASSETS LIABILITIES 31 Dec 2016 $450 000 $270 000 31 Dec 2017 $610 000 $310 000 Assuming there were no drawings or contributions of capital, profit for 2017 must have been:

Select one: a. $160 000 b. $120 000 c. $220 000 d. $300 000 10. Sydney Associates had the following assets and liabilities: Cash on hand $4,000. Bank Overdraft $11,000. Accounts Payable $3,000 Inventory $2,700 Accounts Receivable $8,100 Office Furniture $4,500 Loan from Perth Ltd $12,000 Motor Vehicles $12,000. The amount of Equity is? Select one: a. $27,300 b. $5,300 c. $13,300 d. $8,300

11. The statement of changes in equity: Select one: a. serves as a connecting link between the income statement and the balance sheet. b. shows how profit was determined. c. indicates the ability of the entity to generate cash flow. Incorrect. The statement that indicates the ability of the entity to generate cash flow is the cash flow statement. The statement of changes in equity serves as a connecting link between the income statement and the balance sheet. d. shows the selling prices of the entity's assets. 12. Which of these is not a liability? Select one: a. Wages paid. b. Bank overdraft. c. GST payable. GST payable is a liability. d. Creditor. 13. Which of these is NOT an alternative name for the income statement? Select one: a. Operating statement. b. Statement of Financial Position. c. Profit Report. d. Profit and Loss Statement. 14. Which of the following statements is TRUE? Select one: a. Equity can be thought of as the owner's claim to the assets of the entity after deducting all liabilities. b. Profit can be calculated as net assets at the end of the year less net assets at the beginning of the year less drawings. c. The profit of an entity is always represented by an increase in cash. d. A withdrawal of cash for private use by the owner is shown in the income statement as an expense. 15. The statement that explains the changes in equity and serves as a link between the balance sheet and the income statement is which of the following? Select one: a. Statement of Financial Position. b. Operating Statement c. Statement of Cash Flows. d. Statement of Changes in Equity 16. A balance sheet: Select one: a. shows how profit was determined. b. is classified into operating, investing and financing activities.

c. measure the entity's financial performance. d. lists assets, liabilities and equity at a specific point in time. 17. Which of these is NOT an alternative term for equity? Select one: a. Proprietorship. b. Capital. c. Owners' Equity d. Bank account balance The cash in a bank account balance of a firm is an asset. 18. Which of these does not fit the accounting definition of an asset? Select one: a. Goodwill. b. Accounts receivable. c. Cash at bank. d. Staff skill and experience. 19. A business transaction creating an inflow of net assets resulting from the sale of goods or services is a(n): Select one: a. capital transaction. b. cash disbursement c. expense transaction. d. income transaction 20. The income statement reports the financial: Select one: a. performance of an entity at a specific period of time. b. position of an entity over a specified period of time. c. position of an entity at a specific point in time. d. performance of an entity over a specified period of time. 21. Which statement is NOT correct? Select one: a. Information in the cash flow statement is useful in assessing the ability of an entity to pay its debts as they fall due. This statement is true. b. Operating activities are concerned with activities involving the sales and purchases of fixed assets. c. The cash flow statement classifies cash flows into operating, investing and financing groupings. d. A comparison of the cash flow statement and the income statement can indicate to what extent the profit is represented by cash inflows. 22. If an entity has assets of $168 900 and liabilities o $70 000 its equity is:

Select one: a. $238 900 b. $98 900 c. unable to be calculated. d. $28 900 23. Which of the following statements concerning the Profit or Loss Statement (also called the Income Statement) is NOT true? Select one: a. If expenses exceed income then a loss has been incurred for the period. b. An alternative name is the statement of financial performance. c. It shows the change in the entity's cash balance for the period. This statement is NOT true. The cash balance at the end of a period is shown on the balance sheet. d. The heading must indicate the length of time the report covers? 24. Which of these is not income? Select one: a. Receipts from the provision of services. b. Interest received. c. Receipts from the sale of goods. d. Additional capital contributed by the owner. Additional capital contributed by the owner is not income, it is equity. 25. On 2 January 2017 Lindley Corporation buys goods from Stratton Ltd and agrees to pay for them within 60 days. On the balance sheet for Lindley Corporation at 2 January 2017 the amount owing to Stratton Ltd would be reported as: Select one: a. accounts receivable. b. accounts payable. c. an advance payment by a customer. d. ...