Question

QUESTION 1

1. The most common type of business organisation is

   	a.	non-for-profit organisation
   	b.	partnership
   	c.	company/corporation
   	d.	sole proprietorship

1 points   

QUESTION 2

1. A business financial statement is meant to convey information about the business to _________________ users in order to help them make decisions about the business.

   	a.	internal and external
   	b.	internal only
   	c.	external only
   	d.	none of the above

1 points   

QUESTION 3

1. Which of the following is an advantage of being a sole trader?

   	a.	The owner has unlimited liability.
   	b.	The business is not a separate legal entity.
   	c.	The business has limited life.
   	d.	The owner has total autonomy over business decisions.

1 points   

QUESTION 4

1. Businesses owned by two or more individuals are

   	a.	sole proprietorship
   	b.	company/corporation
   	c.	partnerships
   	d.	government

1 points   

QUESTION 5

1. Management accounting does not need to comply with various accounting standards when information is compiled for internal usage

   True

   False

1 points   

QUESTION 6

1. Which of the following is a difference between partnerships versus sole traders?

   	a.	Unlimited liability
   	b.	Limited life
   	c.	More expensive to set up
   	d.	Mutual agency

1 points   

QUESTION 7

1. Compared to the sole trader, the advantage of the partnership form of business is:

   	a.	greater access to skills and resources
   	b.	mutual agency
   	c.	limited life
   	d.	it is easy to set up

1 points   

QUESTION 8

1. Management accounting focuses on producing reports and statements for users external to the business

   True

   False

1 points   

QUESTION 9

1. An amount owing by customers of an entity would be recorded under the following account on the balance sheet.

   	a.	Income
   	b.	Accounts Payable
   	c.	Inventory
   	d.	Accounts Receivable

1 points   

QUESTION 10

1. The payment of a liability:

   	a.	decreases assets and liabilities
   	b.	decreases assets and increases liabilities
   	c.	decreases assets and equity
   	d.	increases assets and decreases liabilities

1 points   

QUESTION 11

1. A balance sheet contains:

   	a.	Income, expenses and profit
   	b.	Assets, liabilities and owner's equity
   	c.	Assets, expenses and owner's equity
   	d.	Assets, income and owner's equity

1 points   

QUESTION 12

1. Which of the following includes accounts payable, salaries payable, unearned revenues, and short-term notes payable

   	a.	Owner's Equity
   	b.	Non Current Liability
   	c.	Current Liability
   	d.	Current Asset

1 points   

QUESTION 13

1. Equity is increased by:

   	a.	liabilities
   	b.	expenses
   	c.	dividends
   	d.	sales revenue

1 points   

QUESTION 14

1. Which of the following is an example of a liability?

   	a.	Unearned Revenue
   	b.	Prepaid Rent
   	c.	Accumulated depreciation
   	d.	Allowance for doubtful debts

1 points   

QUESTION 15

1. Which of these would represent a business transaction?

   	a.	Buying a new delivery van
   	b.	Deciding to use a new supplier.
   	c.	Hiring a new employee due to start next week.
   	d.	Negotiating a loan with the bank.

1 points   

QUESTION 16

1. Which of the following is NOT an example of a non current asset?

   	a.	Furniture
   	b.	Land
   	c.	Goodwill
   	d.	Accounts Receivable

1 points   

QUESTION 17

1. The effect on the accounting equation of the business invoicing a customer for marketing services supplied on credit is:

   	a.	an increase in the asset accounts receivable and an increase in sales revenue account
   	b.	a decrease in the asset accounts receivable and an increase in sales revenue account
   	c.	an increase in the asset cash and an increase in sales revenue account
   	d.	a decrease in the asset cash and an increase in the asset accounts receivable

1 points   

QUESTION 18

1. The effect on the accounting equation of prepaying insurance for the next financial year would be:

   	a.	increase the asset Prepaid Expense; decrease the asset Cash
   	b.	increase the expense Prepaid Expense; decrease the asset Account Receivable
   	c.	decrease the asset Cash; decrease the profit or loss
   	d.	increase the asset Cash; increase profit or loss to record income
   	e.	increase the asset Cash; decrease the liability Debtors

1 points   

QUESTION 19

1. The effect on the accounting equation of the business purchasing $50,000 Inventory on credit

   	a.	An increase in the asset Inventory $50,000 an increase in the liability Accounts payable of $50,000.
   	b.	An increase in the asset Inventory of $50,000 and a decrease in the asset Cash of $50,000.
   	c.	A decrease in the asset Inventory of $50,000 and an increase in the liability Accounts payable of $50,000.
   	d.	An increase in the asset Inventory of $50,000 and a decrease in the liability Accounts payable of $50,000

1 points   

QUESTION 20

1. If Total Assets decreased by $35,000 and equity increased by $15,000 over a period, then Total Liabilities must have changed by?

   	a.	$35,000 increase.
   	b.	$50,000 decrease.
   	c.	$45,000 increase.
   	d.	$5,000 decrease.

1 points   

QUESTION 21

1. _______________ is often more of a guess or estimate, since most managers do not have time for exact numbers when a decision needs to be made and is not required to adhere to Generally Accepted Accounting Principles (GAAP).

   	a.	Management accounting
   	b.	Financial accounting
   	c.	Both financial accounting and management accounting
   	d.	None of the above

1 points   

QUESTION 22

1. Which is a snapshot of a company's financial condition?

   	a.	Statement of Financial Position or Balance Sheet
   	b.	Statement of Cash Flows
   	c.	Statement of Changes in Equity
   	d.	Statement of Comprehensive Income

1 points   

QUESTION 23

1. Who are interested in the life expectancy of the entity and the entity's ability to provide appropriate goods and services?

   	a.	Customers
   	b.	All the answers are correct
   	c.	Investors
   	d.	Creditors

1 points   

QUESTION 24

1. Who requires information to determine make or buy decisions or whether to expand or close down or whether to change banks?

   	a.	Customers
   	b.	Lenders
   	c.	Managers
   	d.	Investors

1 points   

QUESTION 25

1. ________________ seek information on capital growth prospects and future dividend payments.

   	a.	Investors
   	b.	Managers
   	c.	Customers
   	d.	Lenders

Answer 1

Answer :

1. Option - D, Sole proprietorship

Explanation : The most common type of business organisation is sole proprietorship

2. Option - A, Internal and external

Explanation : Financial statements provide basis on which both internal and external parties of the organisation can take the decisions.

3. Option - D, The owner has total autonomy over business decisions.

Explanation : In sole proprietorship the owner has total autonomy over business decisions.

4. Option - C, Partnerships

Explanation : Businesses owned by two or more individuals are partnerships.

answered by: anonymous