Accounting M1

Q1-1: Stewardship is an important concept because of: (Points : 2)       The importance of the quality of decisions by small business owners

The need to increase shareholder wealth

The separation of ownership from management

The need to recognize the importance of all stakeholders

Question 2. 2. Q1-2: Accounting is traditionally seen as fulfilling three functions: (Points : 2)

Scorekeeping, attention-directing and problem-solving

Planning, decision-making and control

Financial accounting, management accounting and corporate finance

Income Statement, Balance Sheet and Statement of Cash Flows

 

Question 3. 3. Q1-3: Financial statements are regulated by: (Points : 2)

Legislation and accounting standards

Accounting standards and audit

Legislation, accounting standards and audit

The accounting profession

 

Question 4. 4. Q1-4: It is most correct to say that management accounting: (Points : 2)

Provides managers with information to improve the organization’s performance through better decisions

Has little relevance to modern business practices

Is predominantly concerned with product costing

Is predominantly concerned with improving productivity and production processes

 

Question 5. 5. Q2-1: Value-based management emphasizes shareholder value, because this is the: (Points : 2)

Primary goal of every business

Required under Corporations legislation

Necessary for economic growth

Function of accounting processes

 

Question 6. 6. Q2-2: Shareholders in a company have the right to: (Points : 2)

Participate in the management of the company

Visit the company to observe its practices

Obtain additional information to that shown in the annual financial statements

Receive an Annual Report and attend an Annual General Meeting

 

Question 7. 7. Q2-3: An audit is best defined as: (Points : 2)

A thorough checking of financial transactions to ensure they are recorded correctly

A certification by an independent accountant that the financial statements are true and correct

The production of financial statements that comply with legislation, accounting standards and present a true and fair view (or present fairly)

An examination of accounting records of a company carried out by an independent accountant to ensure that the financial statements present a true and fair view (or present fairly)

 

Question 8. 8. Q3-1a: The Income Statement comprises the following groups of accounts: (Points : 2)

Income, Expenses and Equity

Assets, Liabilities and Equity

Income and Expenses

Assets and Liabilities

 

Question 9. 9. Q3-1b: The Statement of Financial Position comprises the following groups of accounts: (Points : 2)

Income, Expenses and Equity

Assets, Liabilities and Equity

Income and Expenses

Assets and Liabilities

 

Question 10. 10. Q3-2: The purchase of goods on credit for later resale would affect the following accounts: (Points : 2)

Bank, Cost of sales

Inventory, Bank

Payables, Inventory

Cost of sales, Payables

 

Question 11. 11. Q3-3: Paying cash for a computer system for business use would affect the following types of account: (Points : 2)

Assets only

Both assets and liabilities

Liabilities only

Both assets and expenses

 

Question 12. 12. Q3-4 to Q3-8: Use the following information to answer Questions 3-4 to 3-8 (12-16). Kochyo purchases an inventory of spare parts on credit from its suppliers for $15,000. During the month Kochyo pays its suppliers $10,000 and sells spare parts (which cost the business $8,000) to its customers on credit for $20,000. Customers pay Kochyo $12,000 during the month.

Q3-4: Inventory increases by: (Points : 5)

$2,000

$5,000

$7,000

$8,000

$12,000

 

Question 13. 13. Q3-4 to Q3-8: Use the following information to answer Questions 3-4 to 3-8 (12-16). Kochyo purchases an inventory of spare parts on credit from its suppliers for $15,000. During the month Kochyo pays its suppliers $10,000 and sells spare parts (which cost the business $8,000) to its customers on credit for $20,000. Customers pay Kochyo $12,000 during the month.

Q3-5: Payables increases by: (Points : 5)

$2,000

$5,000

$7,000

$8,000

$12,000

 

Question 14. 14. Q3-4 to Q3-8: Use the following information to answer Questions 3-4 to 3-8 (12-16). Kochyo purchases an inventory of spare parts on credit from its suppliers for $15,000. During the month Kochyo pays its suppliers $10,000 and sells spare parts (which cost the business $8,000) to its customers on credit for $20,000. Customers pay Kochyo $12,000 during the month.

Q3-6: Receivables increases by: (Points : 6)

$2,000

$5,000

$7,000

$8,000

$12,000

 

Question 15. 15. Q3-4 to Q3-8: Use the following information to answer Questions 3-4 to 3-8 (12-16). Kochyo purchases an inventory of spare parts on credit from its suppliers for $15,000. During the month Kochyo pays its suppliers $10,000 and sells spare parts (which cost the business $8,000) to its customers on credit for $20,000. Customers pay Kochyo $12,000 during the month.

Q3-7: Profit increases by: (Points : 6)

$2,000

$5,000

$7,000

$8,000

$12,000

 

Question 16. 16. Q3-4 to Q3-8: Use the following information to answer Questions 3-4 to 3-8 (12-16). Kochyo purchases an inventory of spare parts on credit from its suppliers for $15,000. During the month Kochyo pays its suppliers $10,000 and sells spare parts (which cost the business $8,000) to its customers on credit for $20,000. Customers pay Kochyo $12,000 during the month.

Q3-8: The bank account increases by: (Points : 6)

$2,000

$5,000

$7,000

$8,000

$12,000

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