Introductory Financial Accounting Study Guide
Questions
Course Introduction
Introductory Financial Accounting provides students with a foundational understanding of accounting principles, concepts, and procedures used to communicate the financial health of an organization. The course covers topics such as the accounting cycle, preparation and analysis of financial statements, recording transactions, and understanding assets, liabilities, and equity. Emphasizing the importance of ethics and accuracy in financial reporting, this course equips students with the skills needed to interpret financial information, make informed business decisions, and pursue further studies in accounting and finance.
Recommended Textbook
Accounting An Introduction 6th Edition by Peter Atrill
Available Study Resources on Quizplus
14 Chapters
933 Verified Questions
933 Flashcards
Source URL: https://quizplus.com/study-set/3413
Page 2
Chapter 1: Introduction to Accounting
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/67761
Sample Questions
Q1) The financial reports comprising the 'final accounts' are the:
A) statement of cash flows and statement of comprehensive income.
B) statement of comprehensive income and statement of financial position.
C) statement of comprehensive income, statement of financial position, statement of cash flows and statement of change in owners' equity.
D) statement of financial position, statement of cash flows and statement of comprehensive income.
Answer: C
Q2) Sustainability reporting focuses on:
A) financial aspects.
B) environmental and social factors.
C) customer satisfaction.
D) Both A and C.
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
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/67760
Sample Questions
Q1) The accounting convention that states that every transaction has at least two effects on the accounting equation,so that after the transaction is processed,the equation remains in balance is the:
A) going concern/continuity convention.
B) objectivity/reliability convention.
C) conservatism/prudence convention.
D) dual aspect convention.
Answer: D
Q2) The effect on the statement of financial position when the owner withdraws money from the business is:
A) decrease asset bank; decrease equity.
B) decrease drawings; decrease equity.
C) increase drawings; increase equity.
D) decrease asset bank; increase equity.
Answer: A
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/67759
Sample Questions
Q1) If equity at the beginning of the period is $35,000 and at the end of the period is $56,000 and $20,000 is withdrawn by the owner during the period,calculate profit.(Use the stock approach.)
A) $1,000.
B) $41,000.
C) $76,000.
D) $21,000.
Answer: B
Q2) On 1 July 2014,LMZ Traders paid $9,000 in insurance premiums for coverage for the next three years.The insurance expense that will appear in the income statement and the amount of prepaid insurance in the statement of financial position for the year ended 30 June 2015,respectively,are:
A) $6,000 and $3,000.
B) $9,000 and $0.
C) $3,000 and $6,000.
D) $4,500 and $4,500.
Answer: C
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/67758
Sample Questions
Q1) The offer of new shares to existing shareholders at no cost,in proportion to the amount of their current holding,is known as:
A) a preference issue.
B) a bonus issue.
C) an option.
D) a rights issue.
Q2) Which statement is untrue for private (Pty Ltd)companies?
A) They tend to be associated with smaller businesses.
B) There are fewer private companies in Australia than public companies.
C) They are less regulated than public companies.
D) The shareholders are often family members.
Q3) The report that is specifically designed to provide an assessment of the credibility and reliability of the financial statements a company issues for external use,is the:
A) audit report.
B) director's statement.
C) director's report.
D) trustee statement.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Regulatory Framework for Companies
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/67757
Sample Questions
Q1) The directors' report in the annual report contains each of the following except:
A) a summary of all share issues.
B) a listing of all directors.
C) a review of the current operations.
D) details of any significant changes in the company's affairs.
Q2) Which of the following is not a reason for acquiring a controlling interest in another company?
A) Possible economies of scale.
B) Reducing business risk.
C) Increasing competition.
D) Safeguarding supply resources.
Q3) The statement that is true about the order of repayment for a company in liquidation is:
A) creditors rank before ordinary shareholders.
B) ordinary shareholders rank before preference shareholders.
C) wages owing to employees rank last.
D) All of the statements are true.
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
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/67756
Sample Questions
Q1) A transaction that would not appear in a statement of cash flows is:
A) the creation of an allowance for doubtful debts.
B) the upward revaluation of an asset.
C) a bonus issue of shares.
D) all of the above.
Q2) State the effect on profit and cash of a firm paying a trade creditor.
A) Decrease in profit and decrease in cash.
B) No effect on profit and decrease in cash.
C) No effect on profit and no effect on cash.
D) Decrease in profit and no effect on cash.
Q3) University Press showed wage and salary expenses of $250,000 on its 2015 statement of comprehensive income but reported cash paid to employees of $215,000 on its statement of cash flows.If the beginning balance of accrued wages and salaries payable was $18,000,the ending balance is:
A) $53,000.
B) $45,000.
C) $35,000.
D) $17,000.
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Corporate Social Responsibility and Sustainability Accounting
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/67755
Sample Questions
Q1) Which of these is not claimed as an advantage of the balanced scorecard approach?
A) Overhead costs will become a smaller percentage of total costs.
B) More staff will have a better understanding of the big picture.
C) Continual feedback and review will occur.
D) Decisions will be based on fact.
Q2) Under the GRI Guidelines for General Standard Disclosures,which of the following would not be reported under governance?
A) The process for appointing executives responsible for environmental issues.
B) A listing of all organisations constituting the group in the consolidated report.
C) The composition and process selection for directors.
D) Processes followed for consultation between the executive body and the stakeholders.
Q3) The most common area of voluntary social responsibility reporting in Australia is:
A) nuclear waste.
B) human resources (health and safety, working conditions, etc.).
C) philanthropy.
D) none of the above.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Analysis and Interpretation of Financial Statements
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/67754
Sample Questions
Q1) From the following information,calculate Moore Ltd's rate of return on ordinary shareholders' funds.
Ordinary share capital $600,000.
Retained profits and reserves $200,000.
180,000 fully paid $2.00 10% Preference shares.
Net profit after tax and before preference dividend $276,000.
A) 30.0%.
B) 16.0%.
C) 20.0%.
D) 26.0%.
Q2) Operating profit before interest and taxation,divided by sales × 100/1 is the formula for:
A) return on capital employed.
B) asset turnover period.
C) return on shareholders' funds.
D) operating profit margin.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Costvolumeprofit Analysis and Relevant Costing
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/67753
Sample Questions
Q1) A business may prefer to make a product that it could subcontract at a cheaper price because:
A) they may be concerned that having gained their business, the subcontractor could increase the price charged.
B) by subcontracting the business, they may find supply is less reliable.
C) by subcontracting the business, they may lose control over quality.
D) all of the above.
Q2) The break-even point is best defined as:
A) total costs equal to total revenue.
B) total level of activity equal to total revenue.
C) total fixed costs equal to total revenue.
D) total variable costs equal to total revenue.
Q3) If total costs are $20,000 at an output of 1,000 units and $35,000 at an output of 2,500 units,and variable costs are $10 per unit,total fixed costs are:
A) $15,000
B) $10,000
C) $20,000
D) $25,000
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Full Costing
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/67766
Sample Questions
Q1) 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.
Q2) Which of the following statements is incorrect?
A) Full costs are useful in decision-making, because this approach focuses on future costs.
B) The use of full costs is criticised, because it focuses on past costs.
C) Full costing can lead to incorrect decision-making, because it can distort figures.
D) Actual costs do not always follow the direction that the recovery rate may suggest.
Q3) Both Australian and International standards require inventory to be valued at:
A) full cost.
B) variable cost.
C) manufacturing full cost.
D) direct cost.
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
78 Verified Questions
78 Flashcards
Source URL: https://quizplus.com/quiz/67765
Sample Questions
Q1) Budget targets should be:
A) unachievable so that there is always an incentive to do better.
B) targets derived from experience set at reasonable levels of performance.
C) set to the highest possible standard of performance.
D) goals set by management to ensure that targets can be easily met.
Q2) The total direct materials variance is best explained by:
A) the variance cannot be explained unless the budget is flexed to actual production.
B) better use of materials by the production manager.
C) a change in price of the raw materials.
D) the production manager failing to control the material usage.
Q3) Budget formats can best be described as:
A) the same from one business to the next.
B) conforming to accounting standards.
C) subject to management choice in style and layout.
D) none of the above.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Capital Investment Decisions
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/67764
Sample Questions
Q1) 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%.
Q2) TG Industries is considering investing in a fleet of six delivery vehicles.The annual running costs are expected to total $90,000 per vehicle,including the driver's salary.The vehicles are expected to operate for a total of five years.At present TG industries uses a commercial carrier for its deliveries.The commercial carrier is expected to charge a total of $680,000 for each of the next five years to make the deliveries.What is the estimated net annual cash cost saving on delivery vehicle running cost if TG industries invests in the fleet of six vehicles?
A) $90,000.
B) $400,000.
C) $310,000.
D) $140,000.
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/67763
Sample Questions
Q1) Which statement is not true?
A) A firm should always have a surplus holding of cash.
B) If a firm has a cash deficit, it may need to reschedule its cash payments.
C) If a firm has a cash deficit, it may need to arrange to borrow money.
D) If a firm has a cash surplus, it should make the best use of the surplus.
Q2) Extending the credit period granted,with all other components of the credit policy remaining unchanged,will most likely cause:
A) a decrease in sales.
B) a decrease in bad debts.
C) a decrease in accounts receivable.
D) none of the above.
Q3) A firm has annual credit sales of $5,000,000 and an average collection period of 52 days.What is their average accounts receivable balance,assuming a 365-day year?
A) $142,857.
B) $712,329.
C) $486,111.
D) None of the above.
To view all questions and flashcards with answers, click on the resource link above. Page 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/67762
Sample Questions
Q1) Preference shares which allow the investor to receive dividends in arrears,when the company declares and pays a dividend,are called:
A) cumulative preference shares.
B) redeemable preference shares.
C) participating preference shares.
D) none of the above.
Q2) If a shareholder in a public company sells his/her shares on the Australian Securities Exchange,the capital of the company will:
A) decrease by the amount obtained for the shares.
B) remain the same.
C) decrease by the fair value of the share.
D) increase by the amount obtained for the shares.
Q3) 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