Accounting 115112 week 1

Operating activities consist of: Select one: a. measuring actual operations and progress against a standard or benchmark. b. how products get made and sold. c. establishing means of achieving business goals. d. establishing business goals.

b Operating p.19 (18) The correct answer is: how products get made and sold.

The section of a business plan which includes a description of the relationships between the business, its suppliers and its customers is called the: Select one: a. Operating plan b. Financial plan c. Environmental management plan d. Marketing plan

a : p.55 (54) The correct answer is: Operating plan

Which of the following do not cover a period of time? Select one: a. Balance sheet. b. Accounts receivable ledger . c. Cash flow statement. d. Income statement.

a Balance sheet p.25 (25) The correct answer is: Balance sheet.

Financial accounting reports concentrate on: Select one: a. current and future events b. current events c. past events d. future events

c By deduction from Exhibit 1.8 The correct answer is: past events

Ethical issues confronted by the profession when dealing with clients were found to include: Select one: a. Proposals for tax evasion and conflicts of interest b. Intentional manipulations of financial statements c. Coping with a superior's instructions to act in an unethical way d. All of the options given

d p. 27 (26) The correct answer is: All of the options given

A unique aspect of a company: Select one: a. is that it is a simpler form of business organization than sole proprietorships or partnerships. b. is that by their nature they do less volume of business than sole proprietorships. c. is that it can only have one owner. d. is that it is a separate legal entity apart from the owners.

d p.14 (13) The correct answer is: is that it is a separate legal entity apart from the owners.

The section of a business plan which includes a description of the relationships between the business, its suppliers and its customers is called the: Select one: a. Operating plan b. Environmental management plan c. Marketing plan d. Financial plan

a : p.55 (54) The correct answer is: Operating plan

The principle whereby each partner is responsible for the business actions of all other partners when the actions are carried out in the normal course of business, is because each partner is a (n) ...................... of the partnership: Select one: a. agent b. shareholder c. employee d. creditor

a Page 13 (11) The correct answer is: agent

Which of the following would a manager do as a part of planning activities? Select one: a. Set benchmarks. b. Purchase inventory. c. Pay rent d. Hire employees.

a or c Planning p.19 (18) The correct answers are: Set benchmarks., Pay rent

Operating activities consist of: Select one: a. establishing means of achieving business goals. b. how products get made and sold. c. measuring actual operations and progress against a standard or benchmark. d. establishing business goals.

b Operating p.19 (18) The correct answer is: how products get made and sold.

In lending to a large firm a financial institution will be most concerned about the firms expected: Select one: a. Profitability and solvency b. Profitability, cash flow prospects, and solvency c. Profitability d. Availability of funds to make repayments

a p. 10 (9) The correct answer is: Profitability and solvency

The difference between management and financial accounting is: Select one: a. Management accounting focuses on internal users, whereas financial accounting focuses on external users. b. Management accounting focuses on external users, whereas financial accounting focuses on internal users. c. Management accounting focuses on the reporting function, whereas financial accounting focuses on the control function. d. Management accounting focuses only on the control function, whereas financial accounting focuses on the reporting function.

a p. 17-18 (16-17) The correct answer is: Management accounting focuses on internal users, whereas financial accounting focuses on external users.

The primary purpose of accounting is to: Select one: a. help people make decisions about economic activities. b. provide information that management can use to convince stockholders that management deserves high salaries. c. provide employment to persons who are good at dealing with numbers. d. minimise the amount of profit that a firm has earned.

a p.17 (16) The correct answer is: help people make decisions about economic activities.

The planning role within a company is principally undertaken by: Select one: a. managers. b. consultants. c. lenders. d. shareholders.

a p.18 (18) The correct answer is: managers.

Which accounting report is prepared at a particular point of time rather than over a period of time? Select one: a. balance sheet b. statement of changes in owners' equity c. income statement d. statement of changes in owners' equity and income statement

a p.25 (25) The correct answer is: balance sheet

Which of the following is an example of a service firm? Select one: a. Price Waterhouse, Chartered Accountants b. New World Supermarket c. Hyundai Motors assembly plant. d. Cadbury Chocolates

a p.7 (6) The correct answer is: Price Waterhouse, Chartered Accountants

Which statement is correct? Select one: a. Financial reports provide more forecast data than management reports. b. Financial reports reflect past performance whereas management reports are concerned with the future as well as the past. c. Financial reports are prepared for internal users whereas management reports are prepared for external users. d. Financial reports are produced at more frequent intervals than management reports.

b Pages 20-25 (20-26) The correct answer is: Financial reports reflect past performance whereas management reports are concerned with the future as well as the past.

I. The first step in starting a business is to develop a business plan. II. The first step in starting a business is to set up a company. III. A business plan is a static document that if done right will not need updating. IV. A business plan should be viewed as an opportunity to identify mistakes before they occur. Which of the above is correct?

b Planning in a new business p.52 (51) The correct answer is: I and IV only.

The primary concern of creditors and investors is: Select one: a. risk. b. both of the options given c. return.

b Planning in a new business p.53 (52) The correct answer is: both of the options given

Which type of business organization is easiest to establish? Select one: a. A and b are equally easy to establish. b. Sole proprietorships c. Companies d. Partnerships

b p.11 (10) The correct answer is: Sole proprietorships

The best description of the primary purposes of providing accounting information is: Select one: a. to calculate the bank account balance. b. to assist users in making informed decisions. c. to allow the preparation of a taxation return. d. to enable the financial statements to be prepared.

b p.17 (16) The correct answer is: to assist users in making informed decisions.

The section of a business plan which includes a description of the relationships between the business, its suppliers and its customers is called the: Select one: a. Financial plan b. Marketing plan c. Operating plan d. Environmental management plan

c : p.55 (54) The correct answer is: Operating plan

Management accounting information: Select one: a. follows GAAP in the reporting process. b. is a one size fits all approach to reporting business results. c. can be tailored to the needs of the internal user. d. helps shareholders make decisions.

c Management accounting information p.17 (16) The correct answer is: can be tailored to the needs of the internal user.

What is the primary difference between a manufacturer and a merchandiser? Select one: a. Manufacturers purchase finished goods ready to sell, whereas a merchandiser must create the goods. b. Merchandisers do not sell directly to the public, but rather only to manufacturers. c. Merchandisers purchase finished goods ready to sell, whereas a manufacturer must create the goods. d. Manufacturers buy the finished goods from a merchandiser then resell it, basically acting as a middle man.

c Merchandising business p.8 (7) The correct answer is: Merchandisers purchase finished goods ready to sell, whereas a manufacturer must create the goods.

Which of the following business entities are separate legal entities from their owners Select one: a. Sole Trader b. Partnership c. Publicly Listed Company d. All of the the answers are correct

c p. 14 (14) The correct answer is: Publicly Listed Company

Which one of the following groups is an internal user of the accounting information of an entity? Select one: a. Stockbrokers b. Customers c. Management d. Lenders

c p. 22 (21) The correct answer is: Management

Financial Accounting provides information that allows users to assess: Select one: a. Whether budget targets have been met b. Whether the correct selling prices are allocated to products c. Whether the business has made a profit d. How departments and divisions have performed

c p. 22 (22) The correct answer is: Whether the business has made a profit

Which type of business organisation generates the greatest volume of business? Select one: a. Sole Proprietorships. b. Each generates roughly the same amount of business. c. Companies/corporation. d. Partnerships.

c p.14 (13). Implied, not stated The correct answer is: Companies/corporation.

Which of the following reports is not an example of financial accounting? Select one: a. Statement of cash flows b. Balance Sheet c. A budget report d. Income Statement

c p.20 (20) The correct answer is: A budget report

A balance sheet shows: Select one: a. details of how much profit was earned in the period. b. the change in financial position over a particular period. c. the financial position at the end of the period. d. the cash movements that took place over a particular period.

c p.26 (25) The correct answer is: the financial position at the end of the period.

Generally Accepted Accounting Principles Select one: a. Are only useful when interpreting financial statements of foreign companies b. Is a valuation techinque first developed by the GAP stores c. Allow external users to confidently use information in financial statements to make decisions d. Guide sole traders on how to account for and disclose financial statement items

c page 23 (22) The correct answer is: Allow external users to confidently use information in financial statements to make decisions

The most important function of an accounting system is to: Select one: a. prepare accounting reports b. collect and record data. c. keep employees from embezzling funds. d. provide information for decision-making.

d p.39 (39) The correct answer is: provide information for decision-making.