Introduction to Accounting Test Questions
Course Introduction
Introduction to Accounting provides students with a foundational understanding of the principles and practices of financial accounting. The course covers essential topics such as the accounting cycle, preparation of financial statements, and the interpretation of financial information for decision-making purposes. Students will learn about key concepts including assets, liabilities, equity, revenues, and expenses, as well as the role of accounting in various types of organizations. Emphasis is placed on developing practical skills in recording, classifying, and summarizing financial transactions, and on understanding the ethical responsibilities of accountants.
Recommended Textbook
Accounting for Non Specialists 7th Australian Edition by Atrill McLaney
Available Study Resources on Quizplus
14 Chapters
935 Verified Questions
935 Flashcards
Source URL: https://quizplus.com/study-set/3404
Page 2
Chapter 1: Introduction to Accounting
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/67578
Sample Questions
Q1) How frequently is the set of financial reports made available for external publication by an entity typically produced?
A)fortnightly
B)yearly
C)weekly
D)daily
Answer: B
Q2) What is the primary goal of management accounting?
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 shareholders.
Answer: B
Q3) The best description of the primary purpose of providing accounting information is:
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.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Measuring and Reporting Financial Position
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/67577
Sample Questions
Q1) Assets are classified as either current or non-current. Current assets are:
A)goodwill.
B)expected to be turned into cash within 12 months.
C)the infrastructure assets.
D)all of the above.
Answer: B
Q2) What do non-current liabilities represent?
A)amounts due to the owner of the business which are not payable within 12 months.
B)amounts due to outsiders which are not payable within 12 months.
C)amounts due and payable to outsiders within 12 months.
D)Both A and B.
Answer: B
Q3) Calculate the profit for the year if capital at the beginning is $45,000, capital at the end is $40,000 and during the year the owner withdrew $15,000.
A)$5,000.
B)$15,000.
C)$10,000.
D)$20,000.
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Measuring and Reporting Financial Performance
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/67576
Sample Questions
Q1) To allow for debts that might prove bad in the future, a business will recognise as an expense in the income statement:
A)bad debts.
B)doubtful debts.
C)allowance for doubtful debts.
D)allowance for depreciation.
Answer: B
Q2) The effect on the accounting reports of the current year of not taking into account a bad debt would be:
A)to overstate the asset accounts receivable.
B)to overstate profit.
C)Both A and B.
D)Neither A nor B.
Answer: C
Q3) Which of these is not part of inventory for a manufacturing firm?
A)Partly completed goods (work in process).
B)Raw materials.
C)Finished goods.
D)None of the above, i.e., all are part of inventory.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Introduction to Limited Companies
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/67575
Sample Questions
Q1) Which of these is not an advantage of a private company compared to a partnership?
A)Perpetual life
B)Easier transfer of ownership
C)Limited liability
D)Mutual agency
Q2) Which statement concerning a rights issue is true?
A)The issue is often made to ensure that new shareholders are brought into the company.
B)The shares are generally offered at above the current market price of the existing shares.
C)The cost of the issue tends to be less than making a share issue to the general public.
D)Both A and C.
Q3) Which of the following factors does not influence a firm's dividend decision?
A)A desire to have good investor relations.
B)Cash available to pay a dividend.
C)Wanting to reduce paid-up capital.
D)The need for finance for an investment.
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Regulatory Framework for Companies
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/67574
Sample Questions
Q1) Goodwill on consolidation is classified in the statement of financial position as a/an:
A)current asset.
B)tangible asset.
C)intangible asset.
D)non-current liability.
Q2) How would trade debtors normally be classified in a statement of financial position?
A)as a current liability.
B)as a current asset.
C)as a non-current liability.
D)as a reserve.
Q3) DBC Ltd recently paid $4,000,000 for 60% of JKL Ltd's equity. JKL Ltd had total assets of $6,500,000 and liabilities of $1,300,000. What amount of goodwill on consolidation will DBC Ltd record?
A)$2,700,000
B)$880,000
C)$1,200,000.
D)$100,000.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Measuring and Reporting Cash Flows
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/67573
Sample Questions
Q1) Cash received from the issue of shares will appear in which section of the statement of cash flows?
A)Investing activities section.
B)Does not appear in the statement.
C)Operating activities section.
D)Financing activities section.
Q2) In a growing business that keeps its asset base up-to-date, total cash flow from investing activities will normally be:
A)more than cash flow from operations.
B)negative.
C)positive.
D)none of the above.
Q3) The cash flow statement was added to reporting requirements because it was believed that the income statement and statement of financial position didn't concentrate enough on
A)profitability.
B)liquidity.
C)depreciation.
D)bad debt.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Corporate Social Responsibility and Sustainability Accounting
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/67572
Sample Questions
Q1) Which of these is not one of the perspectives from which the balanced scorecard views the business?
A)Product.
B)Financial.
C)Customer.
D)Business process.
Q2) Research has found that in Australia, environmental disclosures in annual reports tend to be:
A)mostly positive in nature.
B)mostly negative in nature.
C)about half positive and half negative.
D)all positive.
Q3) Why do organisations find corporate social responsibility (CSR)such a challenge?
A)The public view of CSR continues to change.
B)There is no real definition of CSR.
C)There is no CSR 'checklist' for businesses to tick off.
D)Both A and C.
Q4) Briefly outline the essence of the balance scorecard approach.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Analysis and Interpretation of Financial Statements
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/67571
Sample Questions
Q1) Why is interest added back to profit before tax when calculating return on total assets?
A)Because interest rates vary over time.
B)To indicate to lenders that some risk is involved.
C)Because the efficient use of resources should be examined independently from the method of financing.
D)Both A and B.
Q2) Which ratios are specifically concerned with assessing the returns and performance of shares held for investment purposes?
A)liquidity ratios.
B)gearing ratios.
C)investment ratios.
D)efficiency ratios.
Q3) If earnings per share is 85c, dividend per share is 50c, and the market price of each share is $9.35, the price-earnings ratio is:
A)18.7:1.
B)11:1.
C)9:1.
D)5:1.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Cost-Volume-Profit Analysis and Relevant
Costing
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/67570
Sample Questions
Q1) If sales revenue totals $84,000, selling price is $6 per unit, variable costs are $2.50 per unit and fixed costs are $48,000 per annum, the profit that will be earned is:
A)$13,714.
B)$19,200.
C)$1,000.
D)$5,600.
Q2) A venture is said to be risky when the:
A)actual level of activity is less than the planned level of activity.
B)actual level of activity is greater than the planned level of activity.
C)planned level of activity is only slightly above the break-even point.
D)none of the above.
Q3) Refer to the table above. Which product is the most profitable?
A)Expert, because it has the highest contribution margin.
B)Expert, because it has the highest sales price.
C)Secretarial, because it is the most pleasurable for staff.
D)Basic, because it provides the highest dollar contribution per labour hour.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Full Costing
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/67569
Sample Questions
Q1) When determining full costs the treatment of direct costs under activity-based costing:
A)is the same as under traditional costing.
B)relies upon identifying appropriate cost drivers.
C)must be related to activities.
D)Both B and C.
Q2) Anything for which a separate measurement of cost is desired is called a: A)cost unit.
B)job.
C)article.
D)fixed cost object.
Q3) By the end of the 20th Century, the manufacturing sector had fundamentally altered from the sector in the 1920s. The sector is now characterised by the following features, except for:
A)low levels of depreciation.
B)a highly competitive international market.
C)capital-intensive and machine-paced production.
D)a high level of overheads relative to direct costs.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Budgeting
Available Study Resources on Quizplus for this Chatper
76 Verified Questions
76 Flashcards
Source URL: https://quizplus.com/quiz/67568
Sample Questions
Q1) How can a budget help in decision making?
A)by identifying excesses or shortages of cash.
B)by predicting purchase requirements for raw materials.
C)by identifying future resource constraints.
D)all of the above.
Q2) Which budget criticism can be dealt with by adapting and improving budgeting practices?
A)Budgets can make people feel undervalued.
B)Budgets can be seen as a bureaucratic exercise in cost cutting.
C)Bottom-up budgeting can lead to budget padding to make targets easier to achieve.
D)All can be dealt with by adapting and improving budgeting practices.
Q3) Which of these is not a limitation of the traditional approach to control through budgets?
A)The difficulty of separating the causes of variances into controllable or uncontrollable factors.
B)The difficulty of creating clear lines of demarcation between areas of responsibility of various managers.
C)The expense of preparing a budget is too great for the average business.
D)None of the above, i.e., all are limitations.
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Capital Investment Decisions
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/67567
Sample Questions
Q1) Which of the following statements is incorrect?
A)It may be very difficult to quantify all factors that impact on an investment decision.
B)Investment decisions are made easier as cash forecasts are always correct.
C)The validity of assumptions made in relation to an investment proposal may influence the final decision.
D)The results from using an investment appraisal method is only one input into the final decision.
Q2) Wishlist recently purchased a new packaging machine for $678,026. The machine has a remaining useful life of 10 years. Net cash flow per year will be $120,000. The internal rate of return is:
A)16%.
B)20%.
C)24%.
D)12%.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: The Management of Working Capital
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/67566
Sample Questions
Q1) If inventory is turned over 8 times a year, what is the inventory turnover period in days?
A)7 days.
B)46 days.
C)19 days.
D)70 days.
Q2) The economic order quantity model is concerned with answering the question:
A)How much inventory should be held?
B)What should be the size of an inventory order?
C)What is the cost of ordering inventory?
D)All of the above.
Q3) Total purchases are $150,000 and credit purchases are 80% of total purchases. If accounts payable at the beginning of the period are $15,000 and at the end of the period are $13,000, the average settlement period for accounts payable, in days, is:
A)50 days.
B)42.6 days.
C)49 days.
D)74 days.
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Financing the Business
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/67565
Sample Questions
Q1) Evidence suggests that:
A)Businesses tend to follow the 'trade-off' theory.
B)Most businesses are financially geared.
C)Few businesses appear to be highly geared.
D)All of the above.
Q2) The use of debt finance can lead a business to have ________ returns and ________ risk.
A)higher; higher
B)lower; lower
C)higher; lower
D)none of the above
Q3) Equity finance differs from debt finance as:
A)dividends are tax deductible, unlike interest on debt.
B)its claim on assets has priority over debt.
C)it is permanent financing whereas debt is not.
D)all of the above are differences.
Q4) Discuss the advantages and disadvantages of a company issuing long-term debt, e.g., debentures, compared to raising funds through an issue of shares.
To view all questions and flashcards with answers, click on the resource link above.
Page 16