Question 1

The best explanation of relevance is:

Accepted Answer

A)  ensuring the benefit of the information is greater than the cost of providing it.
B)  ensuring that information is expressed as clearly as possible.
C)  ensuring that information is useful for decision-making.
D)  ensuring that information is free from bias.E) A) and B)
F) B) and C)

Question 2

Financial accounting reports, compared to management reports, tend to be:

Accepted Answer

A)  general purpose.
B)  qualitative.
C)  unstructured.
D)  detailed.E) A) and D)
F) A) and C)

Question 3

Which of the following is false?

Accepted Answer

A)  Accounting is conducted in isolation from other disciplines.
B)  Accounting can be applied at different levels.
C)  Accounting is concerned with the provision of information.
D)  Topics included in the body of accounting knowledge include auditing and assurance, taxation law and economics.E) A) and B)
F) A) and C)

Question 4

The financial statement which shows all the changes in the owners' interest in the net assets of the business is:

Accepted Answer

A)  statement of changes in owners' equity.
B)  statement of cash flows.
C)  statement of comprehensive income.
D)  None of the aboveE) A) and B)
F) A) and C)

Question 5

The best description of the primary purpose of providing accounting information is:

Accepted Answer

A)  to allow the preparation of a taxation return.
B)  to assist users in making informed decisions.
C)  to calculate the bank account balance.
D)  to enable the financial statements to be prepared.E) All of the above
F) B) and C)

Question 6

The ALTC's Learning and Teaching Academic Standards Statement for Accounting does NOT include which of the following threshold learning outcomes?

Accepted Answer

A)  Independence
B)  Judgement
C)  Knowledge
D)  Application skillsE) All of the above
F) B) and C)

Question 7

The planning role within a company is principally undertaken by:

Accepted Answer

A)  consultants.
B)  managers.
C)  shareholders.
D)  lenders.E) None of the above
F) C) and D) B

Question 8

Another name for the statement of comprehensive income is:

Accepted Answer

A)  statement of financial position.
B)  balance sheet.
C)  statement of change in owners' equity.
D)  statement of financial performance.E) A) and B)
F) A) and C)

Question 9

What is the primary goal of management accounting?

Accepted Answer

A)  Provide information that can be quantified in monetary terms
B)  Provide information that improves the quality of managers' decisions
C)  Provide information that conforms to the accounting regulations
D)  Provide information to shareholdersE) A) and B)
F) B) and D) B

Question 10

Which of the following is the most important function of an accounting system?

Accepted Answer

A)  Provide information for decision-making, planning and control
B)  Keep employees from embezzling funds
C)  Prepare accounting reports
D)  Collect and record dataE) A) and B)
F) None of the above

Question 11

A business that is not a legal entity, where there is one owner who is fully liable for all debts, is:

Accepted Answer

A)  a proprietary company.
B)  a partnership.
C)  a sole proprietorship.
D)  None of the aboveE) B) and D)
F) B) and C)

Question 12

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:

Accepted Answer

A)  understandability.
B)  reliability.
C)  cost versus benefit test.
D)  relevance.E) All of the above
F) None of the above

Question 13

Which statement is incorrect?

Accepted Answer

A)  A budget defines precise targets, e.g., level of sales, levels of inventory.
B)  A budget is expressed in monetary terms.
C)  A budget is a short-term plan.
D)  A budget summarises past information.E) A) and B)
F) A) and C)

Question 14

Management accounting reports tend to contain:

Accepted Answer

A)  both financial and non-financial information.
B)  financial information only.
C)  information that complies with the accounting standards.
D)  non-financial information only.E) A) and C)
F) A) and B)

Question 15

Calculate the cash available at the beginning of the day if cash at the end is $950, receipts from customers are $360 and payments to suppliers are $425.

Accepted Answer

A)  $150
B)  $160
C)  $340
D)  $885E) None of the above
F) B) and C) D

Question 16

An objective of a business could be:

Accepted Answer

A)  financial survival.
B)  maximise profit.
C)  maximise sales.
D)  all of the above.E) None of the above
F) C) and D)

Question 17

The statement concerning differences between financial and management accounting which is false is:

Accepted Answer

A)  management accounting is less constrained than financial accounting.
B)  managers have much more control over the form and content of their reports.
C)  there is no overlap between management accounting and financial accounting.
D)  the distinction between the two areas, to some extent, reflects differences in access to financial information.E) B) and C)
F) A) and C)

Question 18

The three most common types of structures used by businesses in Australia are:

Accepted Answer

A)  partnership, limited company, association.
B)  sole proprietor, partnership, limited company.
C)  partnership, private company, trust.
D)  sole proprietor, limited company, co-operative.E) B) and C)
F) B) and D)

Question 19

The stages of an accounting system are:

Accepted Answer

A)  evaluation, processing, output.
B)  identification, recording, analysis, reporting.
C)  setting objectives, planning, analysis.
D)  none of the above.E) All of the above
F) B) and C)

Question 20

The statement concerning the key qualities of accounting information that is untrue is:

Accepted Answer

A)  the qualities are frequently in conflict.
B)  relevant information may help to predict future events or confirm past events.
C)  relevant information often contains a degree of subjectivity.
D)  None of the statements is untrue, i.e., all are true statements.E) C) and D)
F) A) and D)

Exam 1: Introduction to Accounting

The best explanation of relevance is:

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Financial accounting reports, compared to management reports, tend to be:

Correct AnswerverifiedShow Answer

Which of the following is false?

Correct AnswerverifiedShow Answer

The financial statement which shows all the changes in the owners' interest in the net assets of the business is:

Correct AnswerverifiedShow Answer

The best description of the primary purpose of providing accounting information is:

Correct AnswerverifiedShow Answer

The ALTC's Learning and Teaching Academic Standards Statement for Accounting does NOT include which of the following threshold learning outcomes?

Correct AnswerverifiedShow Answer

The planning role within a company is principally undertaken by:

Correct AnswerverifiedB

Another name for the statement of comprehensive income is:

Correct AnswerverifiedShow Answer

What is the primary goal of management accounting?

Correct AnswerverifiedB

Which of the following is the most important function of an accounting system?

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A business that is not a legal entity, where there is one owner who is fully liable for all debts, is:

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Which statement is incorrect?

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Management accounting reports tend to contain:

Correct AnswerverifiedShow Answer

Calculate the cash available at the beginning of the day if cash at the end is $950, receipts from customers are $360 and payments to suppliers are $425.

Correct AnswerverifiedD

An objective of a business could be:

Correct AnswerverifiedShow Answer

The statement concerning differences between financial and management accounting which is false is:

Correct AnswerverifiedShow Answer

The three most common types of structures used by businesses in Australia are:

Correct AnswerverifiedShow Answer

The stages of an accounting system are:

Correct AnswerverifiedShow Answer

The statement concerning the key qualities of accounting information that is untrue is:

Correct AnswerverifiedShow Answer

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B

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B

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D

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