Accounting for Non-Accounting Majors Test Bank
Course Introduction
This course introduces the fundamental principles of accounting to students from non-accounting backgrounds, emphasizing the relevance of accounting information in personal and professional decision-making. Topics include understanding basic financial statements, analyzing business transactions, and exploring budgeting, cost control, and financial planning. Through real-world examples and practical exercises, students will gain the essential skills to interpret financial reports, communicate effectively with accounting professionals, and use accounting data to support organizational objectives. No prior accounting experience is required, making the course accessible and practical for diverse academic disciplines.
Recommended Textbook
Atrills Accounting for Business Students 1st Australian Edition by Atrill McLaney
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14 Chapters
893 Verified Questions
893 Flashcards
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Chapter 1: Introduction to Accounting
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76 Verified Questions
76 Flashcards
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Sample Questions
Q1) Financial accounting reports concentrate on:
A)current events.
B)current and future events.
C)past events.
D)future events.
Answer: C
Q2) The financial statement which shows all the changes in the owners' interest in the net assets of the business is:
A)statement of changes in owners' equity.
B)statement of cash flows.
C)statement of comprehensive income.
D)None of the above
Answer: A
Q3) The planning role within a company is principally undertaken by:
A)consultants.
B)managers.
C)shareholders.
D)lenders.
Answer: B
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Page 3
Chapter 2: Measuring and Reporting Financial Position
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72 Verified Questions
72 Flashcards
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Sample Questions
Q1) The accounting convention that calls for financial reports to err on the side of caution is the:
A)accounting period convention.
B)stable monetary unit convention.
C)conservatism (prudence)convention.
D)objectivity convention.
Answer: C
Q2) Which of these does not belong with the others?
A)Bank overdraft
B)Prepaid wages
C)Accounts payable
D)Mortgage loan
Answer: B
Q3) The effect on the statement of financial position when a debtor pays the amount that is owed is:
A)increase asset bank; decrease asset debtor; increase equity.
B)increase asset bank; increase equity.
C)increase asset bank; decrease asset debtor.
D)none of the above.
Answer: C
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Chapter 3: Measuring and Reporting Financial Performance
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72 Verified Questions
72 Flashcards
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Sample Questions
Q1) If inventory item X has a cost of $49 000 and a net realisable value of $60 000 while inventory item Y has a cost of $2 000 and a net realisable value of $500, closing inventory will be valued at:
A)$60 000
B)$62 000
C)$51 000
D)$49 500
Answer: D
Q2) In calculating depreciation, the life of an asset refers to its:
A)physical life.
B)legal life.
C)useful life.
D)technological life.
Answer: C
Q3) Cost of sales is a major expense for a retailer. Cost of sales is:
A)the cost of the goods purchased during the period.
B)the cost of the goods available for sale during the period.
C)the cost of the goods sold during the period.
D)None of the above
Answer: C
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Chapter 4: Recording Transactionsthe Journal and Ledger Accounts
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44 Flashcards
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Sample Questions
Q1) Which of the following is the proper order of accounts in the chart of accounts?
A)Assets, equity, liabilities, revenues
B)Equity, assets, revenues, liabilities
C)Liabilities, equity, revenues, assets
D)Assets, liabilities, equity, revenues
Q2) A company determines that depreciation expense for the year is $25 000, 10% of the cost of their non-current assets. The journal entry to record this adjustment would include:
A)a debit to accumulated depreciation expense for $25 000.
B)a credit to accumulated depreciation for $25 000.
C)a debit to depreciation expense for $2 500.
D)a credit to depreciation expense for $2 500.
Q3) A sale on account results in a debit to cash and a credit to sales.
A)True B)False
Q4) A balanced trial balance is proof that there are no errors in the accounts. A)True B)False
Page 6
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Chapter 5: Accounting Systems and Internal Control
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39 Verified Questions
39 Flashcards
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Sample Questions
Q1) Which of the following is a subsidiary record?
A)Two-column cash book
B)Three-column cash book
C)A cash account in a separate ledger
D)A cash journal
Q2) Which of the following is not an advantage of using subsidiary records?
A)The actual posting can be done later by a different person.
B)Every transaction will be recorded prior to being entered into the ledger.
C)They can only be used in computerised accounting systems.
D)Totals can be posted when it is appropriate to do so.
Q3) Using a bar coding system to track equipment and other non-current assets is an example of:
A)segregation of duties.
B)physical audits.
C)reconciliations.
D)appropriate control over assets.
Q4) Subsidiary records are not part of the double-entry accounting system.
A)True
B)False
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Chapter 6: Introduction to Limited Companies
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Sample Questions
Q1) Parco pays $1 000 000 for all of Subco's common shares. Subco's net assets are carried on Subco's books for $900 000 and have a fair value of $950 000. What is Parco's goodwill on consolidation?
A)$50 000
B)$100 000
C)Zero
D)Cannot be determined from the information given.
Q2) Which of the following accounts only appears on group financial statements?
A)Non-controlling interest
B)Amounts receivable by a parent company from a subsidiary
C)Profit earned by a subsidiary from a sale made to its parent
D)Total group revenue
Q3) The company 'Raider Limited' must be:
A)a proprietary company.
B)a public company.
C)a private company.
D)none of the above.
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Chapter 7: Regulatory Framework for Companies
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Sample Questions
Q1) Which of the following is a responsibility of the directors of a public company?
A)To maintain an internal control system within the company
B)To ensure financial statements are prepared showing a true and fair view of an organisation's financial situation
C)To organise for financial reports to be audited
D)All of the above
Q2) Which of the following is not typically included in the notes to the financial statements?
A)All insignificant disclosures
B)Explanations of measuring bases used
C)Details of asset subclassifications
D)Confirmation that accounting standards have been adhered to
Q3) An auditor's report does not provide the users of the report with:
A)a check on the credibility of the report.
B)an assurance on whether the financial statements comply with accounting standards.
C)an opinion on the reliability of the financial statements.
D)a guarantee of no misstatements in the financial statements.
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9
Chapter 8: Measuring and Reporting Cash Flows
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70 Flashcards
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Sample Questions
Q1) Which of the following is an example of a non-cash investing or financing transaction?
A)Charging depreciation
B)Sale of a parcel of shares
C)Repayment of a loan
D)The purchase of a building paid for by an issue of shares direct to the vendor
Q2) What is the rule for converting credit sales to cash received from debtors?
A)Income - Accounts receivable at the beginning + Accounts receivable at the end = Cash received
B)Income + Accounts receivable at the beginning - Accounts receivable at the end = Cash received
C)Income + or - Accounts receivable at the beginning + or - Accounts receivable at the end = Cash received
D)None of the above
Q3) When reconciling profit with net cash flow from operating activities:
A)subtract increases in current assets and add increases in current liabilities.
B)add increases in current assets and subtract increases in current liabilities.
C)add increases in current assets and add increases in current liabilities.
D)None of the above
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Page 10
Chapter 9: Corporate Social Responsibility and Sustainability Accounting
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Sample Questions
Q1) Which of the following statements relating to integrated reporting is incorrect?
A)There are no similarities at all between the integrated and GRI frameworks.
B)The framework for integrated reporting appears to be more aligned with traditional accounting principles than with the GRI framework.
C)Integrated reports give the impression of being more business oriented than socially or environmentally focussed.
D)Integrated reports appear to target the financial providers.
Q2) 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.
Q3) What is the most common area of voluntary social responsibility reporting in Australia?
A)Nuclear waste
B)Human resources (health and safety, working conditions, etc.)
C)Philanthropy
D)None of the above
Page 11
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Chapter 10: Analysis and Interpretation of Financial Statements
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67 Verified Questions
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Sample Questions
Q1) Which of these ratios is not directly relevant to the evaluation of a company's short-term liquidity position?
A)Operating profit ratio
B)Current ratio
C)Quick ratio
D)Acid test ratio
Q2) Which ratio is considered to be the primary measure of overall profitability as it assesses how effectively the business has used its funds?
A)Return on ordinary shareholders' funds
B)Gross profit margin
C)Return on capital employed
D)Operating profit margin
Q3) The current market price of Fixit Ltd's ordinary shares is $5.00 each. If the latest earnings per share is $0.50, the company's price-earnings ratio is:
A)10 times.
B)2.0 times.
C)2.5 times.
D)20 times.
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Chapter 11: Costvolumeprofit Analysis and Relevant Costing
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Sample Questions
Q1) How are fixed costs represented graphically?
A)A horizontal line, staying the same irrespective of the level of activity
B)Starting at zero and increasing as a straight line as activity increases
C)Starting at a given point and increasing as a straight line as activity increases
D)The intersection of the total costs and total revenue lines
Q2) Refer to the table above. The operating gearing for Unique Tables is:
A)higher with the turning machine.
B)higher without the turning machine.
C)insignificant.
D)Equal in both cases
Q3) Refer to the table above. Which product is the most profitable?
A)Expert, because it has the highest contribution margin.
B)Expert, because it has the highest sales price.
C)Secretarial, because it is the most pleasurable for staff.
D)Basic, because it provides the highest dollar contribution per labour hour.
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13
Chapter 12: Full Costing
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Sample Questions
Q1) To what are service cost centre costs assigned?
A)Individual customers
B)Corporate headquarters
C)Production cost centres
D)Units of output directly
Q2) A cost centre through which jobs do not pass is known as a:
A)product cost centre.
B)service cost centre.
C)non-job cost centre.
D)administrative cost centre.
Q3) 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.
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Chapter 13: Planning and Budgeting
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Sample Questions
Q1) Which of the following could not be a possible cause of an adverse (unfavourable)materials usage variance?
A)Faulty machinery
B)Poor quality materials
C)An increase in the price of the raw materials
D)Inexperienced workers
Q2) Leonard Company is preparing its second quarter production budget. Projected sales in units are 600 for April, 680 for May, and 750 for June. Leonard's policy is to have finished goods inventory equal to 20 per cent of the next month's projected unit sales. What should be the production quota for May?
A)830 units
B)694 units
C)680 units
D)666 units
Q3) What is the group which oversees the budgeting process within an organisation?
A)Estimates committee
B)Board of directors
C)Budget committee
D)Variance committee
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Page 15
Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) If the net present value of a project is $1 000 after using a discount rate of 8%, then one can conclude that the internal rate of return is:
A)greater than 8%
B)8%
C)between 8% and 10%
D)less than 8%
Q2) Which statement is true?
A)The 'internal rate of return' method assumes that cash reinvested in the course of the life of the project earns at the same rate as the project.
B)The 'net present value' method assumes that the reinvestment rate is at the cost of capital.
C)Both the 'internal rate of return' and the 'net present value' methods assume that the reinvestment rate is at the cost of capital.
D)Both A and B
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