Business Analysis and Reporting
Review Questions
Course Introduction
Business Analysis and Reporting is a course that equips students with the critical skills needed to interpret, analyze, and communicate financial and non-financial information in a business context. The course covers essential topics such as data analysis, financial reporting, performance measurement, and the use of analytical tools to support decision-making. Students learn to critically evaluate business scenarios, develop insights from data, and prepare clear, impactful reports for various stakeholders. Emphasis is placed on ethical considerations, regulatory environments, and the role of technology in modern business reporting, preparing students for roles in business analysis, consulting, and management.
Recommended Textbook
Accounting Business Reporting for Decision Making 6th Edition by Jacqueline Birt
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Chapter 1: Introduction to Accounting and Business Decision Making
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Sample Questions
Q1) The financial reports that meet the information needs of a range of users unable to demand accounting information are called ____________ purpose financial statements.
Answer: general
Q2) The information provided in financial statements is the result of past transactions and does not provide information.
Answer: forecast
Q3) Which of the following is not a cost associated with providing financial information?
A) Collecting.
B) Processing.
C) Reviewing.
D) Disseminating.
Answer: C
Q4) The work of recording financial transactions is normally carried out by a _______________ not an accountant.
Answer: bookkeeper
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Page 3
Chapter 2: Accounting in Society
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Q1) Not compromising your professional judgement because of bias or a conflict of interest is known as maintaining ______________.
Answer: objectivity
Q2) The role of accountants in reporting and promoting sustainability includes:
A) reporting sustainability performance.
B) internal control procedures.
C) analysing of energy consumption costs.
D) all of the above.
Answer: D
Q3) APES 110 Code of Ethics for Professional Accountants is issued by:
A) the Institute of Chartered Accountants in Australia.
B) CPA Australia.
C) Australian Securities and Investments Commission.
D) Accounting Professional & Ethical Standards Board.
Answer: D
Q4) One of the principles outlined by the ASX Corporate Governance Council is that companies should respect the rights of _______________.
Answer: shareholders
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Chapter 3: Business Structures
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Sample Questions
Q1) 'For-profit' business structures differ in terms of:
A) equity structure.
B) owner liability.
C) taxation.
D) all of the above.
Answer: D
Q2) Gym classes and excavation of building sites are examples of _________________ services.
Answer: equipment-based
Q3) A sole trader form of business organisation:
A) consists of one individual who controls and manages the business.
B) must have at least two owners.
C) combines the records of the business with the personal records of the owner.
D) is classified as a separate legal entity.
Answer: A
Q4) Manufacturing entities are involved in the conversion of raw materials into _____________ _____________.
Answer: finished goods
Q5) In Australia a discretionary trust is also known as a _____________ trust.
Answer: family
5
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Chapter 4: Business Transactions
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Sample Questions
Q1) A business borrows $10 000 from the bank.What effect does this transaction have on the accounting equation?
A) An increase in the asset cash of $10 000 and an increase in the liability bank loan of $10 000.
B) An increase in the asset cash of $10 000 and a decrease in the liability bank loan of $10 000.
C) A decrease in the asset cash of $10 000 and a decrease in the liability bank loan of $10 000.
D) A decrease in the asset cash of $10 000 and an increase in the liability bank loan of $10 000.
Q2) Which of the following is not a business transaction?
A) Selling goods on credit.
B) Signing a contract to hire a new employee.
C) Purchasing office equipment for cash.
D) Owner withdrawing cash from the business bank account for personal use.
Q3) A worksheet is a ___________ spreadsheet used by accountants to organise information and assist in the preparation of financial statements.
Q4) _________ is added to opening equity to calculate ending equity.
Q5) Expenses have a (positive/negative)____________________ effect on Equity.
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Chapter 5: Balance Sheet
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Sample Questions
Q1) The entity that is under no legal requirement to prepare a balance sheet is a:
A) company.
B) not-for-profit business.
C) sole trader.
D) partnership.
Q2) If total assets equal $295 000,total liabilities are $165 000 and total equity equals $130 000 then net assets equals:
A) $295 00
B) $130 000
C) $165 000
D) $30 000
Q3) Select the asset that is not an identifiable intangible asset:
A) brand name.
B) trademark.
C) development expenditure.
D) goodwill.
Q4) If an asset's carrying amount is greater than its recoverable amount an __________ loss will need to be recognised immediately in the statement of profit or loss.
Q5) ________________ assets are non-monetary assets without physical form.
Page 7
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Chapter 6: Statement of Profit or Loss and Statement of Changes in Equity
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Sample Questions
Q1) Which of the following is an example of other comprehensive income?
A) Dividends received.
B) Sales income.
C) Royalties.
D) Revaluations of assets recorded directly in the revaluation surplus account.
Q2) Managers use of accounting discretion allowable under accounting policy choices and estimates to portray a desired level of profit in a particular reporting period is referred to as ___________________ management.
Q3) For a retailing or manufacturing entity,gross profit is equal to sales less:
A) purchases.
B) all expenses.
C) cost of sales.
D) all expenses other than cost of sales.
Q4) Which of the following are included in a statement of changes in equity?
A) All changes in equity arising from equity contributions and dividends paid.
B) All changes in equity arising from shares purchased.
C) All changes in equity arising separately from non-owner changes in equity (e.g. profit).
D) All options are included in a statement of changes in equity.
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Q5) The main expense incurred by a retail business is __________ of __________.
Chapter 7: Statement of Cash Flows
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Sample Questions
Q1) Decision makers have increased their reliance on the statement of cash flows due to the relative difficulty in manipulating the statement of ____________ _______________ compared with manipulating the statement of profit or loss.
Q2) Changes in non-current liabilities and equity in the balance sheet appear in the statement of cash flows under:
A) the reconciliation of operating profit with cash flow from operating activities.
B) operating activities.
C) investing activities.
D) financing activities.
Q3) __________ expense relating to property,plant and equipment is a common business expense that is not included in the statement of cash flows.
Q4) Cash flows from investing activities arise from changes in non- ___________ ____________ on the balance sheet.
Q5) Comparing an entity's profit or loss with its' net cash from operating activities can indicate how well an entity is managing its ______________ _____________.
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Chapter 8: Analysis and Interpretation of Financial Statements
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Sample Questions
Q1) In a vertical analysis,the anchor point for accounts payable is:
A) total assets.
B) total current liabilities.
C) total liabilities.
D) total equity.
Q2) Ratios can be impacted by the accounting policy choices and
made by an entity.
Q3) Which of the following does not measure asset efficiency?
A) Asset turnover ratio.
B) Return on assets.
C) Days inventory.
D) Times debtors turnover.
Q4) ________ before interest and tax divided by net finance costs equals times interest earned.
Q5) If the market share price is $20 and the earnings per share is calculated to be $2.50,the price earnings ratio is:
A) 4 times.
B) 5 times.
C) 8 times.
D) 12.5 times.
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Chapter 9: Budgeting
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Sample Questions
Q1) A review of the financial performance for the month of July noted the following: \(\begin{array}{|l|r|r|}
\hline \text{ Account } & \text{ Budget } & \text{ Actual } \\ \hline \text{ Bank balance at 1 July }& \$ 8000 & \$ 8000 \\ \hline \text{ Total cash payments} & \$ 12000 &\$ 10200 \\ \hline \text{ Total cash receipts }&\$ 25000 & \$ 21500 \\ \hline \end{array}\)
The actual bank balance and variance at 31 July is:
A) bank balance $(3300), Variance $1700 F.
B) bank balance $(3300), Variance $1700 U.
C) bank balance $19 300, Variance $1700 F.
D) bank balance $19 300, Variance $1700 U.
Q2) An unfavourable variance occurs when:
A) actual expenses are less than budgeted expenses.
B) budgeted expenses are greater than actual expenses.
C) actual sales are higher than budgeted sales.
D) budgeted sales are higher than actual sales.
Q3) A program budget is commonly used in the __________ and not-for-profit sector.
Q4) The cash budget shows the ____________ future cash receipts and cash payments.
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Chapter 10: Costvolumeprofit Analysis
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Sample Questions
Q1) The break-even point is where:
A) total sales = fixed costs plus profit.
B) total sales = total variable costs.
C) total sales = total variable costs plus profit.
D) total sales = total costs.
Q2) If fixed costs are $200 000 and variable costs are 60% of the selling price,the break-even point in sales dollars is:
A) $800 000
B) $333 333
C) $200 000
D) $500 000
Q3) An outsourcing decision means:
A) choosing to buy all products to be sold.
B) making all products to be sold.
C) asking another entity to supply services.
D) deciding on whether to buy or make the products or services.
Q4) Buying in a product or service instead of producing it is known as
Q5) The range of activity over which costs are assumed to be valid is the _____________ range.
12
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Chapter 11: Costing and Pricing in an Entity
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Sample Questions
Q1) Assume Clean Motors Ltd manufactures only one component for the motor vehicle industry.In one year the company produced 25 000 units of the component of which 22 000 units were sold.The following costs were recorded for that year:
\( \begin{array}{lr}\text { Direct material } & \$ 750000 \\ \text { Direct labour } & 450000 \\ \text { Manufacturing overhead } & 300000 \\ \text { Administrative expenses } & 84000\end{array} \)
If there were 5000 units in beginning inventory,calculate the value of ending inventory for Clean Motors Ltd.
A) $480 000
B) $180 000
C) $300 000
D) $320 000
Q2) Which of these businesses is likely to operate a job costing system?
A) Pottery workshop.
B) Public accounting office.
C) Small printing business.
D) All are likely to operate a job costing system.
Q3) A cost object is an object that has a __________________ measurement of cost.
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Page 13
Chapter 12: Capital Investment
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Sample Questions
Q1) Which of the following statements is true when projects with IRRs greater than the entity's cost of capital are accepted?
A) The projects will enhance the wealth of the owners.
B) The projects will make additional returns over and above the cost of finance.
C) The projects will return the cost of finance.
D) All of the statements are true.
Q2) The investment decision rule for net present value calculations is to invest:
A) in the project with the lowest NPV.
B) in the project with the lowest discount rate.
C) in the project with the highest discount rate.
D) in the project with the highest positive NPV.
Q3) One method of investment decision making that is appealing to managers is the accounting rate of return (ARR).This method measures the average profit over a period as a percentage of the average:
A) net cash flow.
B) investment.
C) net cash inflow.
D) opportunity cost.
Q4) The ___________ (shorter/longer)a payback period is,the greater the risk.
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Chapter 13: Financing the Business
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Q1) Foreign investment where the investor has significant influence over the key policies of the investee is known as ___________ investment.
Q2) The ease of conversion of an asset into cash is a measure of an entity's
Q3) Which of the following statements is correct with regards to hybrid debt securities?
A) Hybrid debt securities include both debt and equity features.
B) Convertible notes and convertible preference shares are hybrid securities.
C) All of these statements are correct.
D) The issuer receives cash only at the time of issue.
Q4) If working capital is allowed to increase to an inappropriately high level:
A) it can reduce the average rate of return on assets.
B) all of the options are true.
C) it can reduce the average rate of return on equity.
D) there will be an opportunity cost of doing so.
Q5) Which of the following is not a characteristic of debentures?
A) Debentures are issued to raise debt funds.
B) Debentures are secured.
C) Debentures may be issued privately to large institutional investors.
D) None of the above. All of the options are characteristics of debentures.
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Chapter 14: Performance Measurement
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Sample Questions
Q1) In using the balanced scorecard,which of the perspectives would most likely apply to the goals of 'survive','succeed' and 'prosper'?
A) Financial.
B) Customer.
C) Internal operations.
D) Innovation and improvement activities.
Q2) Which of the following is an example of a financial performance measure?
A) Production and delivery lead times.
B) Employee productivity.
C) Process downtime.
D) Return on investment.
Q3) The ___________ value added performance measure is based on the economic increase in an organisation's value after a suitable charge for capital is deducted.
Q4) __________________ is the term used to describe the focus on the efficient use of resources to minimise their impact on the environment.
Q5) Environment ____________ indicators provide information about the local,regional,national or global condition of the environment which could be impacted by an entity.
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