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Study Resources (Accounting)

A. Operating Profit is £32,000 B. Operating Profit is £19,000 C. Operating Profit is £11,000 D. Operating Profit is £27,000 27. Which of the following statements is correct? For a business that buys raw materials and manufactures a product: A. “Revenue” or "Turnover" or "Sales" is all money that comes into the business, including items.
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6. Financial strength/solvency ratios include: A. Return on shareholders funds, asset turnover and gross profit ratio B. Stock turnover ratio, debtor ratio and creditor ratio C. Price earnings ratio, dividend cover and dividend yield D. Current ratio, quick ratio and capital gearing ratio 7. The price earnings ratio, dividend cover and dividend yield provide information.
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11. Which of the following is not a disadvantage usually associated with budgeting? A. Encourages "budget slack" B. Discourages delegation and the identification of management responsibility C. In practice, it is often difficult to come to an agreement about the organizations objectives D. Can often be a "paperwork exercise" not fully understood by mangers 12..
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16. The starting point of producing the master budget is to produce the budgets for direct materials and direct labour 17. A cash budget includes receipts that don't appear in the income statement 18. Usually the actual results achieved by an organization will be different from what had been planned 19. The difference.
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2. Debits are increases to assets and expenses 3. Debits are increases to liabilities and revenues 4. Incomplete records can, with some additional information, be converted into an income statement and statement of financial position 5. It is essential that every business keeps a complete record of ALL transactions   .
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11. The following information is available for companies A, B, C and D: A B C D Number of ordinary shares 1,000,000 1,250,000 750,000 500,000 Current share price £2.50 £3.00 £1.50 £1.75 Total profits after tax £200,000 £225,000 £150,000 £250,000 Total ordinary dividends 100,000 100,000 50,000 40,000 Which company has the lowest price/earnings ratio? A. A B. B C..
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2. Non-current assets include inventories and trade receivables. 3. Non-current liabilities include long-term borrowings such as mortgages. 4. Revenue from sales decrease assets and decrease equity. 5. Management accounting is primarily concerned with producing financial statements for shareholders and creditors.     .
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2. "Contribution" can be defined as sales minus variable costs 3. In measuring the previous relationship between costs, detailed mathematical accuracy is more important than "realistic assumptions" 4. Before contribution can be calculated, fixed costs and variable costs have to be separated 5. Marginal costing is appropriate for the valuation of closing inventory.
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16. In practice, direct material costs per unit might decrease as output increases because of: A. Economies of bulk buying B. Employees become more efficient at their job C. Increased manufacturing capacity D. All of the above 17. Which of the statements is correct? A. In the short term direct labour costs may be more like.
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11. The break-even point can be expressed as: A. Sales/fixed costs-contribution B. Fixed costs/(contribution per unit/sales per unit) C. Fixed cost/sales D. Fixed costs-contribution/sales 12. WhoMadeWho Ltd. is planning to reduce the selling price of one of its products from £80 to £60. Fixed costs are £1.1m per annum; variable costs £40 per unit; 70,000.
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11. The direct labour rate variance can be expressed as: A. Actual hours x (actual rate - standard rate) B. Standard rate x (actual hours - standard hours) C. Actual hours x (standard rate x standard hours) D. Standard rate x (actual hours/standard hours) 12. Direct materials usage variance can be expressed as: A. Actual quantity.
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16. The following information is available for companies A, B, C and D: A B C D Number of ordinary shares 1,000,000 1,250,000 750,000 500,000 Current share price £2.50 £3.00 £1.50 £1.75 Total profits after tax £200,000 £225,000 £150,000 £250,000 Total ordinary dividends 100,000 100,000 50,000 40,000 If you are interested in obtaining a regular income.
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21. If a company was interested in calculating how long it takes to receive payment from customers, which of the calculations would they make? A. Trade receivables/sales revenue x 365 B. Sales revenue/trade receivables x 365 C. Trade payables/cost of sales x 365 D. Cost of sales/trade payables x 365 22. If dividend per share.
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6. The FlyOnTheWall company made the following purchases of camera components: Date Units Cost price per unit Amount Total 1st Feb 800 £10 8,000 8,000 15th Feb 1,000 £9 9,000 17,000 25th Feb 6,000 £11 6,600 23,600 The company took out a job on the 27th February, using 1,200 components. Show the price charged for.
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2. The establishment of the limited liability company made the position of creditors less secure 3. Auditors are not responsible for finding fraud 4. The going concern concept assumes that the business will continue in operational existence for only a limited period of time 5. Companies are allowed to pay dividends out of.
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11. An example of a long-term asset is: A. Cash B. Inventory C. Fixtures and fittings D. Prepayments 12. An example of a current liability is: A. Retained earnings B. Accumulated depreciation C. Owner's equity D. Bank overdraft 13. An example of a long-term liability is: A. Current taxation payable B. Mortgage C. Proposed dividend D. Accumulated depreciation 14. Corporation tax payable would be classified.
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6. Which fundamental accounting concept stipulates that revenue and costs are recognized as they are earned or incurred? A. Consistency B. Comparability C. Accruals D. Prudence 7. Which fundamental accounting concept stipulates that revenues and profits are not anticipated, but recognized only when realized as cash? A. Consistency B. Prudence C. Comparability D. Accruals 8. Which accounting principle stipulates that.
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16. Which of the following statements is correct? A. Capital expenditure appears on the income statement, not the statement of financial position B. Revenue expenditure appears on the income statement, not the statement of financial position C. Revenue expenditure does not appear on the income statement D. Capital expenditure is not associated with depreciation 17..
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21. If a company has long-term borrowings of £12,000 and equity of £138,000, what is its gearing ratio? A. 8.7% B. 11.5% C. 8% D. 9.5% 22. The statement of financial position of Rosie Ltd. includes the following entries: inventory £25,000, trade receivables £12,000, cash £11,000 and current liabilities £25,000 (made up of trade payables.
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21. When setting budgets, the lead budget (the one to start with) and most important budgets are usually: A. “Sales” is the lead budget and “Cash” the most important B. “Cash” is the lead budget and “Profit” the most important C. “Production” is the lead budget and “Sales” the most important D. “Cash” is.
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6. The main purpose of financial accounting information is to: A. Provide financial information for taxation purposes B. Provide financial information to managers C. Provide financial information for external users, such as shareholders and creditors D. Provide financial information to customers 7. The accounting equation can be stated as: A. Assets = Liabilities + Owner's Equity B..
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16. Fixed overhead expenditure variance can be expressed as: A. Actual fixed overhead - budget fixed overhead B. Actual fixed overhead/budget fixed overhead C. Actual fixed overhead x budget fixed overhead D. Budget fixed overhead/actual fixed overhead 17. LR Kinncaid Company assembles steel components for trains. The standard labour cost per unit is: 3 hours @.
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2. Non-current liabilities are used in the calculation of the current ratio 3. The return on capital employed (ROCE) shows how "solvent" a company is 4. The gearing ratio relates long-term borrowing to equity 5. One way to improve return on capital employed (ROCE) is to reduce costs and increase sales   .
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11. At the beginning of the financial year, trade receivables are £4,560 and trade payables are £3,780. Cash received from receivables in the year are £38,240 and cash paid to payables are £18,040. Closing receivables are £2,268 and closing payables are £4,040. What are the sales of the business in the.
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2. Standard costing can help establish variances in costs, but does not consider the volume of production 3. The sales margin volume variance measures the effect of a change in sales price 4. An adverse variable overhead cost variance might mean that some item of variable overhead, such as cleaning costs, has.
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A. Going Concern, Accruals, Consistency and Prudence B. Relevance, Reliability, Comparability and Understandability C. Going Concern, Relevance, Consistency and Comparability D. Accruals, Prudence, Reliability and Understandability 31. The four main objectives of the “Statement of Principles for Financial Reporting” are: A. Going Concern, Accruals, Consistency and Prudence B. Relevance, Reliability, Comparability and Understandability C. Going Concern, Relevance,.
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16. Published financial statements are aimed at a variety of users, including customers, the public and employees 17. Public financial statements are produced specifically in order to satisfy the requirements of HM Revenue and Customs 18. Which of the following statements is false? A. Lenders are often provided with more information than is.
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6. Dividend per share expressed as a % of current share price is known as: A. Dividend cover B. Price/earnings ratio C. Dividend yield D. Earnings per share 7. Total profits divided by number of ordinary shares is known as: A. Dividend cover B. Price/earnings ratio C. Earnings per share D. Dividend yield 8. Current share price divided by earnings.
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11. The following information is from the annual report of Thunderstruck Ltd: Statement of financial position of Thunderstruck Ltd as at 31 December 201X £m Assets Non-current assets Property plant and equipment 120 Current Assets Inventory 30 Trade receivables 40 Cash 40 110 230 Equity and Liabilities Equity Share capital 40 Retained earnings 35 75 Non-current liabilities Long-term borrowing 110 Current liabilities Trade payables 45 155 230 Income statement extract of Thunderstruck Ltd.
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21. Which of the following concepts suggests that minor items will not affect the true and fair view of a set of financial statements? A. Duality B. Materiality C. Objectivity D. Consistency 22. Which of the following statements is correct? A. Inventories should be shown at the lower of cost and net realizable value B. Inventories should.
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6. The MoneyTalks company produces and sells 125,000 units a year for £50 each. Variable costs are £40 and annual fixed costs are £600,000. Calculate the contribution per unit. A. £90 B. £10 C. £4.80 D. £14.80 7. The MoneyTalks company produces and sells 125,000 units a year for £50 each. Variable costs are £40 and.
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21. Which of the following are ways in which managers can manipulate the income statement in order to show a higher profit? A. Bringing forward the recognition of sales B. Overstate closing inventory C. Make repairs and maintenance look like capital expenditure D. All of the above 22. In a company's group accounts, the part.
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2. A balanced portfolio can eliminate unsystematic risk 3. A high price/earnings (P/E) ratio indicates that a company is profitable 4. The only factor that influences a companies share price is the profit it has made 5. The "market capitalization" of a company refers to the total market value of a companies shares   .
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16. Which of the following rations considers the relationship between current assets and current liabilities? A. Quick ratio B. Current ratio C. Capital gearing ratio D. ROCE 17. Which of the following rations considers the relationship between equity and long-term borrowing? A. Quick ratio B. Current ratio C. Capital gearing ratio D. ROCE 18. Which of the following rations considers.
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16. The manufacturing plant at Daydream plc has three departments. The budgets for each department are shown below: A B C Production Overheads £3m £6m £30m Hours worked 1m 1m 1m Direct wages £12m £16m £20m Calculate the wage rate per hour for each department. A. A= £12 per hour; B = £16 per hour; C.
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11. Shareholders wealth consists of two sources: A. Dividends and share price B. Profit and share price C. ROCE and dividends D. Growth and dividends 12. According to ASB's Statement of Principles for Financial Reporting, what 4 objectives should financial accounting statements meet? A. Accruals, capital maintenance, understandability and relevance B. Relevance, reliability, comparability and understandability C. Prudence,.
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