Archives
Chapter 01 1 Economic Consequences Accounting Information knowledge Analytical
Chapter 1 – Introduction to accounting TRUE/FALSE 1. An objective of accounting is to provide information to predict and evaluate the going concern of an entity. 2. Accounting information is always quantitative and objective. ANS: F PTS: 1 AACSB: Knowledge, […]
Chapter 02 1 Mutual agency refers to the fact that each member of
Chapter 2 – Types of organisations and the financial reporting framework TRUE/FALSE 1 Mutual agency refers to the fact that each member of the partnership form of business entity can bind the other(s) in contract within the scope of normal […]
Chapter 03 1 Deontologists judge the moral correctness of actions by only
Chapter 3 – Ethics and corporate governance TRUE/FALSE 1. Deontologists judge the moral correctness of actions by only looking at the consequences of such actions. 2. For accountants to use judgement in providing advice would be unethical. ANS: F PTS: […]
Chapter 04 1 James made Profit The Sale The Car OFA
Chapter 4 – Wealth and the measurement of profit TRUE/FALSE 1. The wealth of an entity is determined by what it controls and what it owes. 2. Choosing a measurement system affects profit but does not affect wealth. ANS: F […]
Chapter 05 1 Liquidity refers to the ease with which assets can be converted
Chapter 5 – Presentation of financial position and the worksheet TRUE/FALSE 1. Liquidity refers to the ease with which assets can be converted to cash in the normal course of business. 2. The historical cost assumption requires that an asset […]
Chapter 06 1 The statement of comprehensive income shows the results of operations
Chapter 6 – Presentation of financial performance and the worksheet TRUE/FALSE 1. The statement of comprehensive income shows the results of operations over a period of time, and the balance sheet shows the financial condition of a business at a […]
Chapter 07 1 A debtor arises when a business sells goods or services
Chapter 7 – Debtors, creditors, accruals and prepayments TRUE/FALSE 1. A debtor arises when a business sells goods or services to a third party on credit terms. 2. The absence of bad debts is an indicator that the credit policy […]
Chapter 08 1 The just-in-time technique aims to minimise the costs of holding
Chapter 8 – Inventories and work in progress TRUE/FALSE 1. The just-in-time technique aims to minimise the costs of holding inventory. 2. The costs of holding inventory will vary depending on the type of business; generally, however, holding excessive amounts […]
Chapter 09 1 The future benefits of a non-current asset are difficult to determine
Chapter 9 – Non-current assets and depreciation TRUE/FALSE 1. The future benefits of a non-current asset are difficult to determine, due to the uncertainty of measuring the unexpired benefit. 2. Depreciation spreads the original cost of a non-current asset over […]
Chapter 10 1 Working capital is represented by current assets less current liabilities
Chapter 10 – Financing and business structures TRUE/FALSE 1. The effect that the collapse of an airline has on the tourist industry is seen to be industry-specific and therefore a business risk. 2. Working capital is represented by current assets […]
Chapter 11 1 Instead of paying cash for the purchase of land and buildings
Chapter 11 – Internal control of cash, statement of cash flows and other issues TRUE/FALSE 1. Investing all cash to maximise returns to the business is a more effective management of cash than ensuring cash is available to pay debts […]
Chapter 11 2 Which of the following statements regarding consolidated
B. $(28,000) C. $(24,000) D. $(18,000) 41. Big Deals, Inc., had the following cash flows during March: Paid for inventory $2000 Paid wages to employees 4000 Received from cash sales 10,000 Paid for equipment 6000 Received a loan 7000 What […]
Chapter 12 1 The owners of an entity are regarded as equity investors whether
Chapter 12 – Financial statement analysis TRUE/FALSE 1. The owners of an entity are regarded as equity investors whether they are sole traders, partnerships or shareholders in a multinational corporation, whereas preference shareholders may be classified as equity or debt […]
Chapter 13 1 An increase in assets and an increase in liabilities is the same as saying assets
Chapter 13 – Worksheet to debits and credits TRUE/FALSE 1. An increase in assets and an increase in liabilities is the same as saying assets have been debited and liabilities have been credited. 2. The worksheet approach and the T […]
Chapter 14 1 A company’s results are judged against some expectations
Chapter 14 – Internal users, internal information, and planning and control TRUE/FALSE 1. A major requirement of managers is to have detailed and timely information that enables them to monitor results and compare with plans and budgets, in order to […]
Chapter 15 1 You believe You Could Operate The Business For
Chapter 15 – Capital investment decisions TRUE/FALSE 1. The accounting rate of return (ARR) is a traditional method of project evaluation, which involves dividing either the average net profit by the average book value of the investment, or the average […]
Chapter 16 1 Analytical Veronicas Clothing Manufacturers Supplies The Following
Chapter 16 – Cost information and decision making TRUE/FALSE 1. In multi-product firms, it is necessary to set up a system to account for costs and to identify direct and indirect costs. 2. The selling price of products is determined […]
Chapter 17 1 A dependent variable represents the cost of an activity
Chapter 17 – Cost behaviour and cost-volume-profit analysis TRUE/FALSE 1. Cost-volume-profit (CVP) analysis is a technique that examines the interrelationship between cost, volume and profit at constant activity levels. 2. A dependent variable represents the cost of an activity, while […]
Chapter 18 1 First Calculate The Contribution Per Unit Labour
Chapter 18 – Accounting for decision making: with and without resource constraints TRUE/FALSE 1. Incremental or differential costs are the increases in costs or benefits between alternative opportunities available to an entity. 2. Sunk costs are costs that have been […]
Chapter 19 1 Manufacturing Company Manufactures Product Called Zyklon Each
Chapter 19 – Budgets TRUE/FALSE 1. ‘Budgetary slack’ can be referred to as dysfunctional behaviour where managers deliberately understate or overstate elements of a budget such as sales or costs in order to achieve budget. 2. Formulating guidelines for overall […]
Chapter 20 1 A manager is responsible for all costs of producing product
Chapter 20 – Performance measurement and the balance scorecard TRUE/FALSE 1. A manager is responsible for all costs of producing product X but does not set the selling price. This means the manager is responsible for a cost centre. 2. […]