Accounting for Non-Specialists Exam Questions
Course Introduction
Accounting for Non-Specialists introduces students to the fundamental principles and practices of accounting, focusing on the interpretation and use of financial information rather than its technical preparation. The course covers basic accounting concepts, the structure and analysis of financial statements, budgeting, and key performance indicators, enabling students from non-accounting backgrounds to understand how accounting information supports decision-making in business. Emphasis is placed on real-world applications and ethical considerations, equipping participants with essential financial literacy skills relevant to a wide range of professional fields.
Recommended Textbook
Accounting for Non Specialists 7th Australian Edition by Atrill McLaney
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Page 2
Chapter 1: Introduction to Accounting
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Sample Questions
Q1) Business managers, even if not accountants, need familiarity with basic accounting information to help with decisions about
A)what products to sell.
B)whether or not to invest in certain projects.
C)whether to expand or cease operations.
D)All of the above are correct.
Answer: D
Q2) Knowledge of the objectives or mission of a business will be most useful in assisting users of financial reports in understanding:
A)the liquidity position of the business.
B)why it is taking longer than it should to collect money from accounts receivable.
C)the financial reporting cycle.
D)what the business is trying to achieve.
Answer: D
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Chapter 2: Measuring and Reporting Financial Position
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Sample Questions
Q1) The accounting convention that requires the activities of the business to be kept separate from the activities of the owner is the:
A)dual aspect convention.
B)business entity convention.
C)conservatism convention.
D)accounting period convention.
Answer: B
Q2) If current assets are $15,200, current liabilities are $3,100, non-current liabilities are $45,000 and equity is $70,000, non-current assets are:
A)$108,100
B)$48,100
C)$92,900
D)$102,900
Answer: D
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Chapter 3: Measuring and Reporting Financial Performance
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Sample Questions
Q1) The cost associated with the purchase of a new machine that will be included in the cost of the machine is:
A)invoice price.
B)installation costs.
C)delivery charges.
D)all of the above.
Answer: D
Q2) The effect on the accounting reports of the current year of not taking into account a bad debt would be:
A)to overstate the asset accounts receivable.
B)to overstate profit.
C)Both A and B.
D)Neither A nor B.
Answer: C
Q3) If doubtful debts are overestimated:
A)profit for the current year will be overstated.
B)profit for following years will be overstated.
C)profit for the following years will be understated.
D)profit over the total life of the business will be understated.
Answer: B
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Chapter 4: Introduction to Limited Companies
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Sample Questions
Q1) The shareholders' equity section in a statement of financial position may include which of the following accounts?
A)Retained profits.
B)Share capital.
C)Reserves.
D)All of the above.
Q2) The disadvantages of a company business structure include all of the following except:
A)extensive regulatory requirements.
B)more expensive to establish.
C)less management flexibility.
D)mutual agency.
Q3) Redeemable preference shares:
A)are the same as bonus shares.
B)can be repurchased by the company.
C)allow the holders full voting rights.
D)can be exchanged for ordinary shares.
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Chapter 5: Regulatory Framework for Companies
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Sample Questions
Q1) Which of the following is included in the statement of changes in equity?
A)share issues.
B)changes to reserves.
C)changes to retained profits.
D)all of the above.
Q2) How does the statement of comprehensive income differ from a traditional statement of financial performance?
A)it does not show a gross profit.
B)it only shows realised gains and losses.
C)it shows all realised and unrealised gains and losses.
D)it does not show financial expenses.
Q3) If you were asked to loan money to a company that you feared may be getting into financial difficulties, which of these courses of action would provide you with the most protection from default on the loan?
A)Rely on the principle of limited liability.
B)Require a mortgage over a specific asset of the company.
C)Require the accounts of the company to be audited.
D)Specify a particular accounting method to be used.
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Chapter 6: Measuring and Reporting Cash Flows
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Sample Questions
Q1) Which item is not classified as a cash flow from investing activities?
A)payment for shares to be held as an investment.
B)cash purchase of office furniture.
C)receipt from the sale of premises.
D)dividends paid to investors.
Q2) If $90,000 is owed by customers at the beginning of the year, $75,000 is owed at the end and credit sales are $120,000, the cash received from customers is:
A)$120,000.
B)$80,000.
C)$125,000.
D)$135,000.
Q3) When preparing the note attached to the statement of cash flows reconciling operating profit with cash flow from operations, which statement is not true?
A)An increase in current assets is deducted from profit.
B)A decrease current assets is added to profit.
C)An increase in current liabilities is deducted from profit.
D)All of the above are true.
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8
Chapter 7: Corporate Social Responsibility and Sustainability Accounting
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Sample Questions
Q1) Research has found that in Australia, environmental disclosures in annual reports tend to be:
A)mostly positive in nature.
B)mostly negative in nature.
C)about half positive and half negative.
D)all positive.
Q2) An argument against corporate social responsibility is:
A)It is too costly.
B)It is too difficult.
C)Business is about building wealth for its shareholders, not helping society.
D)All of the above.
Q3) 'How companies manage the business process to produce an overall positive impact on society' is a definition of:
A)environmental responsibility.
B)corporate social responsibility.
C)ethics.
D)none of the above.
Q4) Briefly outline the essence of the balance scorecard approach.
Page 9
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Chapter 8: Analysis and Interpretation of Financial Statements
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Sample Questions
Q1) The following information was extracted from the financial records of Ross Ltd for the year ended 30 June 2018: \[\begin{array} { l r }
\text { Cash Sales } & \$ 50,000 \\
\text { Credit Sales } & 200,000 \\
\text { Accounts receivable } & 25,000 \\
\text { Cost of Sales } & 130,000
\end{array}\] If there are 365 trading days per year, calculate for the managing director the number of days that accounts receivable are outstanding at 30 June 2018.
A)86 days.
B)51 days.
C)114 days.
D)46 days.
Q2) A firm has total assets of $800,000 and total liabilities of $200,000. If profit after tax and interest is $150,000, the return on shareholders' funds is: A)25%.
B)8%.
C)12.5%.
D)9%.
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Chapter 9: Cost-Volume-Profit Analysis and Relevant
Costing
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Sample Questions
Q1) Which of these would be considered a fixed cost?
A)Cost of fuel for a transport company.
B)Laundry costs to wash towels used by a hairdresser.
C)Insurance premium.
D)Materials used in production.
Q2) The contribution margin is so called because it contributes to:
A)variable costs.
B)fixed and variable costs.
C)fixed costs and profit.
D)fixed costs.
Q3) How are fixed costs best defined?
A)as fixed in relation to changes in activity over the relevant range of output.
B)as fixed for all time.
C)as fixed for 6 months.
D)as fixed for a given number of products.
Q4) What does an operating loss indicate?
A)sales are greater than break-even.
B)sales are less than break-even.
C)sales are equal to break-even.
D)none of the above.
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Chapter 10: 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) Which of the following statements is correct?
A)Full costing takes into account all resources sacrificed to achieve a specific objective.
B)Full costing only takes into account manufacturing costs.
C)Only variable costs are required to determine the selling price for a product.
D)Full costing cannot be used in the service industries.
Q3) What does an overhead recovery rate represent?
A)a rate at which jobs will be charged with overheads.
B)a rate at which jobs are charged labour costs.
C)a rate at which jobs are charged to clients.
D)a rate at which jobs use overhead.
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Chapter 11: Budgeting
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Sample Questions
Q1) How can a budget help in decision making?
A)by identifying excesses or shortages of cash.
B)by predicting purchase requirements for raw materials.
C)by identifying future resource constraints.
D)all of the above.
Q2) The variances which management should investigate each month are:
A)Only favourable variances.
B)Only adverse (unfavourable)variances.
C)All variances.
D)All variances management deems significant.
Q3) Refer to the table above. If a patio set costs $100 to produce, what will be the cost of sales in the budgeted statement of comprehensive income for the period October to December 2018?
A)$1,800,000.
B)$1,900,000.
C)$2,200,000.
D)$1,500,000.
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13
Chapter 12: Capital Investment Decisions
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Sample Questions
Q1) The time value of money is an important concept in investment decisions as it takes into account that:
A)a dollar received today is more valuable than a dollar received tomorrow.
B)a dollar received today is equal to a dollar received tomorrow.
C)a dollar received tomorrow is more valuable than a dollar received today.
D)it takes time to earn profits.
Q2) To calculate the Accounting Rate of Return, it is necessary to determine annual profit. Annual profit is calculated on a/an:
A)market value basis.
B)cash basis.
C)accrual basis.
D)current cost basis.
Q3) What is the main disadvantage of the Internal Rate of Return method?
A)it ignores the scale of projects, which could lead to wrong decision-making.
B)it is difficult for management to incorporate it into decision-making.
C)it is too simplistic.
D)all of the above.
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14
Chapter 13: The Management of Working Capital
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Sample Questions
Q1) The ABC system of managing inventory:
A)is the activity-based costing system.
B)is a method of applying different levels of inventory control based on the value of each category of inventory.
C)is a simple system of managing inventory based on three codes.
D)none of the above.
Q2) Orange Company expects demand for a product to be 12,005 units annually. It costs $5 per unit to hold inventory for one year. Order costs are $50 per order. The economic order quantity is:
A)600 units.
B)1,200 units.
C)240 units.
D)490 units.
Q3) Which item is not part of working capital?
A)cash.
B)plant.
C)accounts receivable.
D)inventory.
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15
Chapter 14: Financing the Business
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Sample Questions
Q1) Which of the following is not a type of short-term debt finance?
A)Bank overdraft.
B)Factoring of accounts payable.
C)Invoice discounting.
D)None of the above.
Q2) Equity finance differs from debt finance as:
A)dividends are tax deductible, unlike interest on debt.
B)its claim on assets has priority over debt.
C)it is permanent financing whereas debt is not.
D)all of the above are differences.
Q3) The firm's financial structure relates to how the firm:
A)finances its assets.
B)manages its accounts receivable.
C)meets its daily financial payments.
D)all of the above.
Q4) The underlying rationale of Australian Securities Exchange is:
A)to enable stockbrokers to charge commission on buying and selling shares.
B)to enable investors to sell their shares easily.
C)to enable companies to raise new capital.
D)Both B and C.
Page 16
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