Introduction to accounting: concepts and financial reports

1. 1What is revenue?

   1. AThe amount of money a company actually receives during a specific period
   2. BAffect assets, liabilities and equity
   3. CExternal exchange of something of value between two or more entitys
2. 2What are the steps for the accounting process?

   1. AIdentifying, measuring, communicating, decision making
   2. Bmeasuring, identifying, decision making, communcating
   3. Cidentifying, communicating, measuring, decision making
   4. Didentifying, decision making, measuring, communcating
3. 3The part of the accounting function within an organisation

   1. AFinancial accounting
   2. BManagement accounting
   3. CInternal accounting
   4. Dboth a and b
4. 4The two fundamental qualitative characteristics of financial reports are relevance and faithful representation.

   1. ATrue
   2. BFalse
5. 5
   One of the costs to an entity of providing accounting information to external parties, can be a decline in competitive advantage.

   1. ATrue
   2. BFalse
6. 6The first step in issuing an accounting standard is

   1. Athe identification by interested parties of a relevant issue.
   2. Bthe issue of an exposure draft inviting comment from interested parties.
   3. Cthe convening of an advisory panel by the AASB
   4. Dthe preparation of a key decision questionnaire identifying the principle issues raised.
   5. Enone of the above
7. 7Legally enforceable accounting standards that apply to Australian companies are issued by

   1. Athe Australian Accounting Standards Board.
   2. Bthe Financial Reporting Council.
   3. Cthe Australian Stock Exchange.
   4. Dthe Australian Securities and Investments Commission.
   5. EAll of the above.
8. 8The internal user of accounting information is:

   1. AAustralian Tax Office
   2. BInvestor
   3. CConsumer
   4. DSupplier
   5. EProduction manager
9. 9Decreases in economic benefits in the form of outflows or depletions of assets or incurrences of liabilities that result in a decrease in equity, other than those relating to distributions to equity participants, is the definition of:

   1. AAssets
   2. BEquity
   3. CIncome
   4. DLiabilities
   5. EExpenses.
10. 10The Corporations Act gets its powers from which section of the Australian Constitution?

    1. A50
    2. B51
    3. C52
    4. D53
    5. ENone of the above

11. 11The information that would be of most interest to an organisation's production manager is:

    1. Aability to pay off debts as they fall due.
    2. Bcontinuity of orders for the factory.
    3. Cannual dividends.
    4. Dtaxable income.
    5. Ecompliance with accounting standards.
12. 12
    Which of these is an asset?

    1. ANone of the above
    2. BIncome tax payable
    3. CRevaluation reserve
    4. DInterest earned on investments
    5. EIncome received in advance
13. 13
    Which of these is a decision relevant to the accounting function of an entity?

    1. AWhether debts can be repaid
    2. BFinding the most cost effective way to produce goods
    3. CThe investment prospects of the entity
    4. DAll of the above
    5. ENone of the above
14. 14
    The information in accounting reports is governed by:

    1. ASPFR.
    2. BGPFR.
    3. CGAAP.
    4. DNone of the above.
    5. EGARP.
15. 15Management reports, compared to financial reports, are:

    1. Aaggregated.
    2. Bdetailed.
    3. Cstandardised.
    4. Dsummarised.
16. 16The most important function of an accounting system is to:

    1. Acollect and record data.
    2. Bprovide information for decision-making.
    3. Cprepare accounting reports.
    4. Dkeep employees from embezzling funds.
17. 17The financial reports (statements) comprising the "final reports" are the:

    1. Acash flow statement, income statement.
    2. Bincome statement and balance sheet.
    3. Cbalance sheet, cash flow statement, income statement
    4. Dincome statement, balance sheet, cash flow statement, statement of change in owners' equity.
18. 18A balance sheet shows:

    1. Athe change in financial position over a particular period.
    2. Bthe financial position at the end of the period.
    3. Cthe cash movements that took place over a particular period.
    4. Ddetails of how much profit was earned in the period.
19. 19
    The statement concerning differences between financial and management accounting which is false is:

    1. Athere is no overlap between management accounting and financial accounting.
    2. Bmanagement accounting is less constrained than financial accounting.
    3. Cthe distinction between the two areas, to some extent, reflects differences in access to financial information.
    4. Dmanagers have much more control over the form and content of internal reports.
20. 20
    Management accounting reports are principally used by managers to:

    1. Areconcile with the financial accounting reports.
    2. Bcalculate the amount of taxation owed to the government.
    3. Ccontrol the operations of an entity on a regular basis.
    4. Dreport to shareholders.
21. 21Another name for the income statement is:

    1. Abalance sheet.
    2. Bstatement of financial position.
    3. Cstatement of financial performance.
    4. Dstatement of change in owners' equity.
22. 22
    Which of these groups is a user of financial information?

    1. Aowners
    2. Bmanagers
    3. Clenders
    4. Dall of the above
23. 23
    All business entities need to produce General Purpose Financial Statements.

    1. ATrue
    2. BFalse
24. 24
    Another name for the balance sheet is:

    1. Astatement of financial performance
    2. Bstatement of change in owners' equity.
    3. Cstatement of financial position.
    4. Dprofit and loss statement.
25. 25
    Which external user of financial information is able to demand the preparation of a specific financial report?

    1. Acreditor
    2. Bpublic
    3. Ctax department
    4. Dcustomer
26. 26
    The test to determine if an item of accounting information is worthwhile collecting is:

    1. Avalidation test.
    2. Bcost test.
    3. Cworthwhile test.
    4. Dcost/benefit test.
27. 27
    Management reports, compared to financial reports, are:

    1. Aprepared less frequently.
    2. Bprepared infrequently.
    3. Cprepared more frequently.
    4. Dprepared with the same frequency.
28. 28
    Which statement about the AASB Framework is not true?

    1. ANone of the above, i.e. all are true statements
    2. BThe Framework applied to all Australian accounting entities
    3. CIt establishes the objectives of financial statements
    4. DIt sets out the qualitative characteristics required of financial information
    5. EIt defines the elements of the financial statements
29. 29
    Resources controlled by the entity as a result of past transactions or events and from which future economic benefits are expected to flow to the entity, is the definition of:

    1. Aequity.
    2. Bassets.
    3. Cexpenses.
    4. Dincome.
    5. Eliabilities.
30. 30
    The information that would be of most interest to an organisation's production manager is:

    1. Acompliance with accounting standards.
    2. Btaxable income.
    3. Cannual dividends.
    4. Dcontinuity of orders for the factory.
    5. Eability to pay off debts as they fall due.
31. 31
    The characteristic of accounting information that requires financial reports to be expressed as clearly as possible and to be capable of being understood by those they are addressed to, is known as:

    1. Aunderstandability.
    2. Breliability.
    3. Crelevance.
    4. Dcost versus benefit test.
32. 32
    A balance sheet shows:

    1. Adetails of how much profit was earned in the period.
    2. Bthe cash movements that took place over a particular period.
    3. Cthe change in financial position over a particular period.
    4. Dthe financial position at the end of the period.

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