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Study Resources (Accounting)

Multiple-choice questions 1.The factor that distinguishes fixed assets such as property, plant and equipment from                             other assets is: a.the intention to use the asset for the future production of goods and services. b.the fact that the asset will provide future benefits. c.the intention to sell the asset. d.the fact that they have a.
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Multiple-choice questions 1.The text classifies accounts receivables into several broad types. What are they? a.Accounts receivable, bills receivable, other receivables b.Debtors, accounts receivables, promissory notes c.Trade debtors, other debtors, sundry debtors d.Promissory notes, accounts receivable, prepayments 2.When a credit sale involving GST is recorded, the sales account: a.has the GST deducted. b.is input taxed. c.includes the GST. d.does not include.
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11.A concise financial report is for: a.three months. b.six months. c.nine months. d.twelve months. 12.Under AASB 1039 and the Corporations Act, which of these does not have to be included in a concise financial report? a.Notes to the financial statements b.Directors report c.Statement of cash flows d.A copy of any qualification in the auditor’s report 13.AASB 1039: a.requires a company to.
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11.The rules for governing the internal affairs of a company that have been built into the                             Corporations Law are called: a.constitution. b.prospectus. c.replaceable rules. d.memorandum of association. 12.A legal document accompanying an invitation to purchase shares, containing                             information about the issuing company, is called a(n): a.debenture. b.company report. c.affidavit. d.prospectus. 13.Which of these is not part.
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21.Under the Corporations Act 2001, the financial statements included in the annual report are specified as: a.a balance sheet, profit and loss statement, statement of cash flows and note 1 to the statements. b.those required by the accounting standards. c.a balance sheet, profit and loss statement, statement of cash flows and a director’s.
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41.Which of these pairs of qualitative characteristics are most likely to be in conflict? a.Comparability and verifiability b.Understandability and comparability c.Relevance and faithful representation d.Understandability and relevance 42.In the Conceptual Framework, materiality is an aspect of: a.verifiability. b.faithful representation. c.understandability. d.relevance. 43.According to the Conceptual Framework faithful representation does not include which of the following? a.Neutrality b.Timeliness c.Freedom from material error d.Completeness 44.The simplification of.
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16.How many of these are advantages of the weighted average method of applying costs                             to inventory? • It is not subject to profit manipulation. • The profit and closing inventory values tend to be ‘smoothed’ compared to other methods. • It is simple to understand. a.0 b.1 c.2 d.3 17.Torago Sales uses a periodic inventory system.
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Multiple-choice questions 1.It is true that a private company: a.is not restricted with a  maximum number of shareholders. b.can raise funds from the public. c.must have ‘Proprietary’ or ‘Pty’ as part of its name. d.can only have shareholders that are family members. 2.Barry and Fiona each own 15 000 shares in the Texas Company Ltd. If.
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41.Under Australian awards, which statement relating to annual leave is true? a.Annual leave is generally accounted for on a cash rather than an accrual basis. b.An employee is not entitled to annual leave until he/she has worked for a year with the same employer. c.Employees are generally entitled to two weeks paid annual.
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36.The lower of cost or net realisable value procedure is used with which of the following? i. FIFO ii.  Weighted average iii. The perpetual method a.i. b.ii c.i, ii d.i, ii, iii 37.Net realisable value in relation to inventory is: a.estimated selling price less stock loss. b.estimated discounted value. c.estimated replacement value. d.estimated selling price less anticipated further costs to complete the.
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31.Which statement relating to depreciation is true? a.Accumulated depreciation represents the amount of an asset's cost that has been transferred to depreciation expense to date. b.The cash account is affected by charging depreciation. c.Accumulated depreciation is a contra-expense account. d.Depreciation represents cash that can be used to replace assets when they wear out. 32.How many.
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41.If the fixed capital balances method (method 2) is used to account for partnership                                           equity, both the profit or loss and the partner’s drawings are closed to the: a.retained earnings account. b.capital accounts. c.profit or loss summary account. d.profit distribution account. 42.Fatima and Jaddon have capital balances of $50 000 and $80.
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Multiple-choice questions 1.Under the Corporations Act 2001 a set of financial statements to be included in the annual report are specified as: a.those required by the accounting standards. b.a balance sheet, profit and loss statement and statement of cash flows. c.a balance sheet, profit and loss statement, statement of cash flows and a director’s.
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11.Under the income statement method of estimating debts likely to be bad: a.a percentage, based on past experience, is applied to profit. b.accounts receivable are ‘aged’ to establish likely bad debts. c.a percentage, based on past experience, is applied to credit sales. d.an estimate of bad debts is made by the accountant. 12.The allowance for.
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51.Intangible assets may be further classified as: a.identifiable and unidentifiable. b.cash and credit. c.living and non-living. d.physical and non-physical. 52.Which of these is not an example of an intangible asset? i. Trademark ii. Oil and gas reserves iii. Licences iv. Goodwill a.i, ii b.iii c.i, ii, iii d.ii 53.Which statement concerning the accounting treatment of intangible assets under IAS 38/AASB 138 is true? a.Goodwill can.
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51.A characteristic of equity as specified in the Conceptual Framework is it: a.ranks before liabilities as a claim on assets. b.must be controlled by the entity. c.is a residual. d.is a present obligation. 52.Under the Conceptual Framework, which of these is not a characteristic of a liability? a.It must result from a past transaction or event. b.It.
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31.Which of these is not a cost of financial reporting? a.Costs of preparing the annual report. b.Costs of adhering to accounting standards. c.Loss of competitive position as a result of the disclosure of financial information outside the business. d.Cost of budgeting within the organisation. 32.Changing from straight line to reducing balance depreciation in one year,.
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51.The cost of a major overhaul of a machine that extends its total useful life by four years                             would be: a.treated as an expense. b.added to the carrying amount of the asset causing future depreciation to be increased. c.charged to a separate asset account and depreciated over four years. d.cause an adjustment.
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11.Items of property, plant and equipment may be acquired for a lump-sum without                                           identification of the cost of each asset. The total cost must be allocated to the                                           individual assets on the basis of: a.fair value at date of acquisition. b.independent valuation. c.market value at the date.
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21.Why should an accounts receivable be re-established if it has previously been written-off                             but is later collected in full? a.So that the debits equal the credits. b.To restore the credit rating of the debtor. c.So that assets are not understated. d.So that expenses are not overstated. 22.Wendy Wu calculates that this year’s estimated.
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31.The balance sheet of Doorbell Ltd at 31 December 2014 showed:                 $ Equipment 80 000 Accumulated depreciation of equipment 63 000                 17 000 On 1 January 2015 the equipment was sold for $15 000. What is the accounting entry to record the receipt of the proceeds from the sale of the.
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Multiple-choice questions 1.What are the essential characteristics of a liability under the definition in the Conceptual Framework? i.  Settlement requiring an outflow of resources embodying economic benefits. ii. A present obligation to an external party. iii. A legal debt. iv. The obligation must have resulted from past events. a.i, , iv b.i, ii, ,iv c.i, ii, iii d.ii, iii,.
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6.Which of these is not included in the cost of inventory as defined by IAS 2/AASB               102? a.Cost of purchase. b.Costs incurred in bringing the inventory to its present location and condition. c.GST. d.Import duties. 7.Millibrand Co uses a periodic inventory system with the specific identification method               of cost assignment. DateUnitsUnit cost     $ Beginning inventoryJuly.
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31.In relation to the direct write-off method of accounting for bad debts, it is not true that: a.bad debts are charged as an expense at the time an account is determined to be uncollectable. b.the entry to write off bad debts is debit bad debts expense, debit GST collected, credit accounts receivable. c.there.
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26.The essence of the perpetual method of accounting for inventory is: a.all movements in each item of stock are tracked via detailed inventory records. b.a stocktake is performed. c.cost of sales is calculated at the end of the accounting period. d.it is useful for high value, low volume items. 27.The average cost of AD computer.
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11.In accounting standard IAS 16/AASB 116 a downward revaluation is now known as                             a: a.revaluation depletion. b.revaluation increment. c.revaluation decrease. d.revaluation decrement. 12.A revaluation surplus is what type of account? a.Asset b.Liability c.Income d.Equity 13.Which statement concerning revaluations that reverse prior adjustments in value is                             untrue? a.A revaluation decrease that reverses a previous increase should be recognised.
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41.Which statement concerning the diminishing-balance method of depreciation is true? a.It charges the same amount of depreciation each period. b.It applies a declining percentage factor to the asset’s original cost. c.It is also known as the units-of-production method. d.It is an appropriate method when proportionately more of the asset’s benefits are consumed in.
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Multiple-choice questions 1.GAAP stands for: a.generally accepted accounting principles. b.government approved accounting policy. c.generally accepted accounting practices. d.good auditing and accountancy practices. 2.Which is the correct historical order for the development of these accounting                             standards? a.AAS series, AASB series, SACs b.AASB series, AAS series, SACs c.SACs, AASB series, AAS series d.AAS series, SACs, AASB series 3.Which of these has.
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Multiple-choice questions 1.Accounting standard IAS 16/AASB 116: a.requires all assets to be revalued every five years. b.requires all assets to be revalued every three years. c.requires all assets to be revalued yearly. d.does not require an entity to revalue its assets. 2.Which of these terms have the same meaning in accounting? i. Carrying amount ii. Book value iii. Written.
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21.Which of these is not an indicator listed in SAC 1 to help assess the existence of a                             reporting entity? a.A high degree of separation between management and owners. b.Sales greater than $1 million. c.Control over large amounts of resources and/or a large amount of borrowings. d.Economic or political importance. 22.An entity where.
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46.Kingswood Electrical has just completed its annual physical inventory count. The ending               inventory was obtained by adding up all the retail price tags for the goods on hand.               Determine ending inventory at cost. Cost Retail Beginning inventory$ 20 000 $ 60 000 Purchases 133 000  390 000 Goods available for.
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21.Recoverable amount is the: a.higher of an asset’s fair value less costs to sell, and its value in use. b.amount expected to be received from the disposal of the asset. c.amount expected to be recovered from the use of the asset. d.lower of an assets fair value and its net realisable value. 22.Recoverable amount is.
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41.The correct accounting entry to create a reserve is: a.debit reserve; credit retained earnings. b.debit retained earnings; credit reserve. c.debit profit and loss summary account; credit reserve. d.debit expense; credit reserve. 42.If a dividend of 18c per share is declared how much will a shareholder who owns 3000               shares receive if the shares were.
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51.When preparing the closing entries for a partnership at the end of the accounting period               which of these statements is true? Assume that capital account balances are not fixed. a.The drawings accounts are closed to the capital accounts. b.The retained earnings account is closed to the profit or loss summary account. c.Income.
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21.Ryan Co purchased a computer for $15 000. Originally it had an estimated useful life of                             4 years and a residual value of $3000, but on the first day of the 4th year of life the                                           estimated useful life was extended by a further two.
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31.According to AASB 1039, in order to provide clear information to shareholders the concise financial report must disclose how many of the following? • Details of any events occurring after the end of the reporting period • That the report is an extract only from the full financial report • The amount of.
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31.(I) Warranty expense and (II) provision for warranties are what type of accounts? a.(I) Expense, (II) equity b.(I) Expense, (II) asset c.(I) Expense, (II) liability d.(I) Liability, (II) expense 32.Which of these is not part of the net pay calculation? a.Workers compensation insurance b.Clothing allowance c.Bonus d.Overtime pay 33.The payment of net wages involves a: a.debit to bank and a credit.
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11.The body in Australia which issues legally enforceable accounting standards that apply               to companies is: a. Financial Accounting Standards Board. b.Australian Accounting Standards Board. c.CPA Australia. d. Australian Securities and Investments Commission. 12.Which of these is a fundamental purpose of accounting standards? Improving: i. accountants’ ethics. ii. social accountability. iii. share price. iv. resource allocation. a.i, ii, iii, iv b.i,.
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41.What is the formula for calculating the average collection period for accounts receivable in days? a.Average receivables/net credit sales b.Net credit sales/average receivables c.365/average receivables d.Average receivables x 365/net credit sales 42.The selling of accounts receivable as a means of quickly raising cash, minimising debt collecting expenses and minimising bad debt losses is known as: a.ageing.
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21.Which statement concerning shares is not true? a.Sometimes shares can be bought back by the company from its shareholders. b.The directors can issue shares at any price, the limiting factor is what the market will pay. c.Under changes to the Corporations Act shares can no longer be issued payable in instalments. d.Directors may decide.
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31.Ben and Jerry, two sole traders, form a partnership by combining their net assets. Jerry contributes: Cost value Fair value Cash $20 000Accounts receivable $14 000 $12 500 Ben contributes: Plant $30 000 $25 000 Accumulated depreciation $7 000 Bank overdraft $6 000 What will be the amount shown in the accumulated depreciation account on formation of the.
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Multiple-choice questions 1.A physical count of inventory on hand is known as: a.perpetual inventory method. b.stocktake. c.realisable value. d.average cost. 2.The accounting standards governing determination of the cost of inventories are: a.IAS 2/AASB 102. b.IAS 8/AASB 108. c.IAS 13/AASB 108. d.IAS 34/AASB 134. 3.Below is an extract from an income statement. $ Beginning inventory14 000 Gross sales36 000 Freight-in  1 500 Sales returns  2 000 Ending.
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11.The key difference between provisions and liabilities is: a.the party that the obligation is owed to. b.whether the obligation is current or non-current. c.the uncertainty regarding the amount or timing of the future sacrifice of economic resources. d.whether there is an obligation. 12.The key characteristic of contingent liabilities is: a.a legal dispute must exist at balance.
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41.The approach contained in IAS 1/AASB 101, requiring all income and expenses to be included in the determination of profit, is known as: a.the reporting method approach. b.the all-inclusive profit approach. c.the operating approach. d.the complete profit approach. 42.Under the accounting standards, which of these is not included in the calculation of a company’s profit.
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