Business Accounting
Final Exam
Course Introduction
Business Accounting provides students with a comprehensive understanding of the principles and practices essential to the accounting processes within a business environment. The course covers fundamental topics such as the accounting cycle, preparation and interpretation of financial statements, management of assets and liabilities, and the application of accounting information for decision-making purposes. Emphasizing both theoretical concepts and practical skills, students learn how to analyze financial data, ensure regulatory compliance, and utilize accounting tools to support business operations and strategic planning. This course serves as a foundation for further study in accounting, finance, and other related business 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 Flashcards
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Sample Questions
Q1) What does a statement of financial position show?
A)The details of how much profit was earned in the period
B)The cash movements that took place over a particular period
C)The financial position at the end of the period
D)The change in financial position over a particular period
Answer: C
Q2) What are the four key qualities of accounting information?
A)Relevance, reliability, comparability and understandability
B)Identification, analysis, reliability and timeliness
C)Planning, control, comparability and analysis
D)Understandability, identification, analysis and relevance
Answer: A
Q3) The accounting report that is specifically designed to answer the question, 'What cash movements took place over a particular period?' is:
A)the statement of financial position.
B)the statement of cash flows.
C)the statement of comprehensive income.
D)all of the above.
Answer: B
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Chapter 2: Measuring and Reporting Financial Position
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Sample Questions
Q1) 'A present obligation of an entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits,' is the generally acceptable definition of:
A)an asset.
B)equity.
C)a liability.
D)an expense.
Answer: C
Q2) Which of the following is regarded as a tangible asset?
A)Franchise
B)Goodwill
C)Long-term investment
D)Copyright
Answer: C
Q3) Which of these is not an asset?
A)Accounts payable
B)Loan to J Troja
C)Accounts receivable
D)Both A and B
Answer: A
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Chapter 3: Measuring and Reporting Financial Performance
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Sample Questions
Q1) Which of these is not an area where judgement must normally be applied in order to calculate depreciation expense?
A)Determining the residual or disposal value of the asset
B)Determining the expected useful life of the asset
C)Choosing a depreciation method
D)None of the above
Answer: D
Q2) The method of inventory valuation that assumes the earliest inventory acquired is the first to be sold is the:
A)lower of cost and net realisable value method.
B)average cost method
C)FIFO method.
D)LIFO method.
Answer: C
Q3) In practice, under accrual accounting, most income is recognised:
A)when the goods are delivered.
B)when the cash is received.
C)when the goods are produced.
D)when an order is received.
Answer: A
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Chapter 4: Recording Transactionsthe Journal and Ledger Accounts
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Sample Questions
Q1) After adjustments are completed, the next step is to prepare:
A)the balance sheet.
B)the profit and loss statement.
C)the trial balance.
D)the adjusted trial balance.
Q2) The process of transferring revenue and expense accounts to the profit and loss account, and then transferring the balance of the profit and loss account and drawing account to the capital account is:
A)creating the trial balance.
B)creating the profit and loss statement.
C)balancing the accounts.
D)closing off the accounts.
Q3) A sale on account results in a debit to cash and a credit to sales.
A)True
B)False
Q4) Which of the following is a contra account?
A)Depreciation expense
B)Bad debt expense
C)Cost of sales
D)Accumulated depreciation
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Chapter 5: Accounting Systems and Internal Control
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Sample Questions
Q1) Which of the following is not a name used to describe the subsidiary record in which credit transactions are usually first recorded?
A)Journal
B)Book of original entry
C)Ledger
D)Day book
Q2) Disagreement between the bank statement balance and the cash account balance indicates one of more errors in the cash account.
A)True
B)False
Q3) The ledger containing revenue and expense accounts is the:
A)nominal ledger.
B)general ledger.
C)sales ledger.
D)purchases ledger.
Q4) The records for all accounts are kept in a single, large book called the ledger.
A)True
B)False
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Chapter 6: Introduction to Limited Companies
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Sample Questions
Q1) Limited liability means:
A)the liability of shareholders for company debts is normally limited to the amount they have paid for their shares.
B)the liability of directors for company debts is limited.
C)if the company fails, the creditors may have to bear greater losses than if they were dealing with a non-company.
D)Both A and C
Q2) If the retained profit figure in a company statement of financial position increases from the beginning of the year to the end of the year, it is most probable that:
A)profit for the year is less than dividends declared.
B)bonus shares have been issued.
C)additional capital has been raised during the year.
D)profit for the year is more than dividends declared.
Q3) Which of the following is a legal entity?
A)Company
B)Partnership
C)Sole proprietorship
D)All of the above
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Chapter 7: Regulatory Framework for Companies
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Sample Questions
Q1) Information if by its omission, misstatement or non-disclosure has the potential to influence economic decision-making, is regarded as:
A)reliable.
B)true and fair.
C)material.
D)objective.
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) The price at which one operating segment of a business sells goods to another operating segment of the same business is the:
A)segment price.
B)trading price.
C)transfer price.
D)inter-segment price.
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9
Chapter 8: Measuring and Reporting Cash Flows
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Sample Questions
Q1) Which of the three main financial statements was chronologically the last to be required to be included as part of the external financial reports?
A)Statement of comprehensive income
B)Statement of financial position
C)Statement of cash flows
D)None, all three reports have always been required to be included in external financial reports
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) Which of these items will appear in a statement of cash flows?
A)Carrying value of an asset sold
B)Adjustment in the balance of an asset account caused by a revaluation
C)Proceeds from the sale of a fixed asset
D)All of the above
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10
Chapter 9: Corporate Social Responsibility and Sustainability Accounting
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Sample Questions
Q1) Which of the following would not be seen as a positive CSR disclosure?
A)Recycling materials
B)Rehabilitating mining sites
C)Admission of excessive pollution emissions
D)Using environmental audits
Q2) On what does sustainability reporting tend to report?
A)Social sustainability
B)Issues impacting on the environment
C)Both A and B
D)Neither A nor B
Q3) The perspective in the balanced scorecard approach that is concerned with how the business is running internally is the:
A)learning and growth perspective.
B)customer perspective.
C)financial perspective.
D)business perspective.
Q4) Briefly outline the essence of the balance scorecard approach.
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Chapter 10: Analysis and Interpretation of Financial Statements
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Sample Questions
Q1) Which of these ratios measure returns to shareholders?
A)Earnings per share
B)Dividend yield
C)Return on ordinary shareholders' funds
D)All of the above
Q2) Place the key steps in financial ratio analysis in order of occurrence. i) Select the ratios considered appropriate and carry out the calculations.
ii) Interpret and evaluate what the ratios reveal.
iii) Identify the users and their information needs.
A)ii, i, iii.
B)iii, ii, i.
C)iii, i, ii.
D)i, ii, iii.
Q3) Calculate the return on capital employed if net profit before interest and tax is $440 000, shareholders' funds are $5 000 000 and long-term loans are $4 000 000.
A)4.9%
B)11.0%
C)6.2%
D)12.2%
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Chapter 11: Costvolumeprofit Analysis and Relevant Costing
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Sample Questions
Q1) The vertical axes on a break-even chart and a profit-volume chart respectively are:
A)profit: sales revenue and costs.
B)volume of output: volume of output.
C)sales revenue and costs: profit.
D)fixed costs: sales revenue.
Q2) Semi-fixed costs are best defined as:
A)having both fixed and variable elements.
B)varying over time.
C)costs ignored in cost-volume-profit analysis.
D)None of the above
Q3) As output increases, variable costs per unit are:
A)semi-fixed.
B)constant.
C)variable.
D)proportional to total costs.
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13
Chapter 12: Full Costing
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Sample Questions
Q1) At the time of the industrial revolution in Britain, the manufacturing sector was characterised by the following features, except for:
A)high use of technology.
B)a relatively uncompetitive market.
C)direct labour-intensive and direct labour-paced production.
D)a low level of overheads relative to direct costs.
Q2) Refer to the information above. The indirect costs incurred in providing a perm to a client would be:
A)all costs mentioned above.
B)shampoo and conditioner, electricity and gas, depreciation on equipment.
C)shampoo and conditioner, electricity and gas, colour and perm solution.
D)shampoo and conditioner, electricity and gas.
Q3) The approach to overhead costs under activity-based costing is that:
A)overheads provide service to cost objects.
B)overheads are caused by activities.
C)overheads happen.
D)overheads can be traced to cost objects.
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Page 14
Chapter 13: Planning and Budgeting
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Sample Questions
Q1) The debtor's budget shows the planned amount owing from credit sales. The closing balance of the accounts receivable account is calculated as follows:
A)(opening balance plus sales)less cash receipts.
B)(opening balance less sales)less cash receipts.
C)(opening balance less sales)plus cash receipts.
D)(opening balance plus sales)plus cash receipts.
Q2) Refer to the table above. What is the projected cash inflow from accounts receivable in January?
A)$43 000
B)$15 000
C)$20 000
D)$28 000
Q3) Budgets are generally regarded as having several areas of usefulness. Which of these is not one of them?
A)They can facilitate control within the business.
B)They tend to promote forward thinking.
C)They help coordinate the various sectors of the business.
D)They can be used to allocate direct expenses.
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Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) Which of the following statements is incorrect?
A)It may be very difficult to quantify all factors that impact on an investment decision.
B)Investment decisions are made easier as cash forecasts are always correct.
C)The validity of assumptions made in relation to an investment proposal may influence the final decision.
D)The results from using an investment appraisal method is only one input into the final decision.
Q2) The finding from surveys of the methods of business investments that is true is:
A)businesses generally only use one method to assess each investment decision.
B)there is a tendency for larger businesses to use the discounting methods.
C)the payback method is hardly used in practice.
D)All of the statements are true
Q3) Refer to the table above. What is the annual net cash flow for years 1-4?
A)$10 000
B)$30 000
C)$40 000
D)$20 000
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