Business Reporting and Analysis Review
Questions
Course Introduction
Business Reporting and Analysis introduces students to the principles and practices of collecting, analyzing, and presenting financial and non-financial information for effective decision-making in organizations. The course covers the fundamentals of financial statements, management reports, and key performance indicators, emphasizing the interpretation of data to assess business performance and support strategic planning. Through practical exercises and case studies, students learn to use analytical tools and techniques to prepare clear, concise, and impactful reports tailored to diverse stakeholders, fostering critical thinking and data-driven business insights.
Recommended Textbook
Accounting Business Reporting for Decision Making 6th Edition by Jacqueline Birt
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14 Chapters
869 Verified Questions
869 Flashcards
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Page 2
Chapter 1: Introduction to Accounting and Business Decision Making
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64 Flashcards
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Sample Questions
Q1) An external user of accounting information is the:
A) payroll officer.
B) supplier.
C) production manager.
D) inventory clerk.
Answer: B
Q2) Which of the following is not a cost associated with providing financial information?
A) Collecting.
B) Processing.
C) Reviewing.
D) Disseminating.
Answer: C
Q3) Which of the following is an example of a liability?
A) Allowance for doubtful debts.
B) Revenue received in advance.
C) Prepayments.
D) Accumulated depreciation.
Answer: B
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Chapter 2: Accounting in Society
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Sample Questions
Q1) A major criticism of the financial planning industry is that:
A) financial planners are paid via commissions.
B) financial planners are not salespeople.
C) financial planners are paid from direct fees for services provided.
D) financial planners make recommendations based on their client's objective and risk profile.
Answer: A
Q2) Which of these is not an ethical principle?
A) Do unto others as you would have them do unto you.
B) The end justifies the means.
C) The greatest good for the greatest number.
D) The end does not justify the means.
Answer: B
Q3) Which of the following is not a specific legal duty and responsibility of a company director?
A) To act with due care and diligence.
B) To avoid improper use of information.
C) To act in good faith.
D) To benefit their own personal interests.
Answer: D
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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) A disadvantage of a partnership is that of 'mutual agency' which means:
A) each partner has limited liability for the debts incurred on a contract entered into by any other partner.
B) each partner must contribute the same capital and skills to the partnership.
C) each partner has the right to enter into contracts on behalf of the partnership.
D) only the partner with the highest cash contribution has the right to enter into contracts on behalf of the partnership.
Answer: C
Q3) A major (advantage/disadvantage)____________________ of a sole trader is the set up costs.
Answer: advantage
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Page 5
Chapter 4: Business Transactions
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Sample Questions
Q1) An owner pays her private motor vehicle insurance from the business bank account.This is:
A) a business transaction.
B) a business event.
C) a personal transaction.
D) none of the above.
Q2) Blitz Pty Ltd has the following accounts and balances listed in its trial balance.Assuming all transactions have been entered correctly,the total debits and credits in the trial balance equal: \( \begin{array}{lr}\text { Capital } & \$ 15000 \\ \text { Cash } & 2000 \\ \text { Accounts payable } & 7000 \\ \text { Inventory } & 5500 \\ \text { Accounts receivable } & 9500 \\ \text { Property, plant and equipment } & 15000 \\ \text { Loan payable } & 24000 \\ \text { Motor vehicles } & 14000\end{array} \)
A) $31 000
B) $61 000
C) $43 500
D) $46 000
Q3) An error that occurs when only one part of a transaction is recorded is known as a __________ - __________ error.
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Page 6
Chapter 5: Balance Sheet
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Sample Questions
Q1) Inventory is categorised in the balance sheet as a:
A) current asset.
B) current liability.
C) non-current asset.
D) non-current liability.
Q2) Which of the following factors must be considered when making a recognition decision?
A) uncertainty as to whether a liability exists.
B) probability of an inflow or outflow of economic benefits.
C) uncertainty as to the reliable measurement of a monetary value.
D) all of the above.
Q3) Goodwill is regarded as an ______________ intangible asset.
Q4) 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.
Q5) An essential characteristic of an asset is that the resource must be _________________ by the entity.
Page 7
Q6) Liabilities are known as ______________ claims on the assets of an entity.
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Chapter 6: Statement of Profit or Loss and Statement of Changes in Equity
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Sample Questions
Q1) Expenses classified by function would be categorised as:
A) marketing expenses.
B) borrowing expenses.
C) selling and distribution expenses.
D) all of the above.
Q2) For a retail entity,cost of sales is calculated as follows:
A) ending inventory + purchases - beginning inventory.
B) purchases - ending inventory - beginning inventory.
C) beginning inventory - purchases + ending inventory.
D) beginning inventory + purchases - ending inventory.
Q3) Auto Care Ltd serviced a motor vehicle on 30 April and issued the invoice to the owner when the motor vehicle was picked up at the end of the day.The owner sends a cheque to Auto Care Ltd on 2 May which is received and banked by Auto Care Ltd on 6 May.Auto Care Ltd will recognise income on:
A) 30 April.
B) 2 May.
C) 6 May.
D) 31 May.
Q4) The statement of profit or loss measures an entity's financial _________.
Q5) An entity's profit or loss is measured over a _________ period of time.
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Chapter 7: Statement of Cash Flows
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Sample Questions
Q1) The ___________ method of preparing a statement of cash flows adjusts an entity's profit or loss for the effects of non-cash transactions and deferrals or accruals of operating activities.
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) Free cash flow is:
A) the cash available to loan to other entities.
B) the cash available to pay current liabilities.
C) the cash available to repay debt, pay dividends and expand operations.
D) the cash available to purchase supplies.
Q4) A healthy business would normally expect to have a net cash __________ (inflow or outflow)from operating activities.
Q5) The statement of cash flows assists decision makers in assessing an entity's ability to _______________cash flows.
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Chapter 8: Analysis and Interpretation of Financial Statements
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Sample Questions
Q1) Baxter Trading Pty Ltd has the following balance sheet figures.The debt ratio is: \(\begin{array}{|l|r|}
\hline \text{Current assets }& \$ 300000 \\
\hline\text{ Current liabilities} & 200000 \\
\hline\text{ Non-current assets} & 800000 \\
\hline \text{Non-current liabilities} & 350000 \\ \hline \end{array}\)
A) 50%
B) 43.75%
C) 66.67%
D) 31.82%
Q2) An entity's profit margin is affected by which of the following ratios?
A) Gross profit margin and expense ratios.
B) Inventory and debtors days ratios.
C) Gross profit margin and return on assets.
D) Debt and equity ratios.
Q3) Expressing each item in a financial statement as a percentage of a base amount is known as _____________ analysis.
Page 10
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Chapter 9: Budgeting
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Sample Questions
Q1) A program budget is commonly used in the __________ and not-for-profit sector.
Q2) Beta Ltd estimates their sales volume for the year is 30 000 units.If the beginning materials inventory is $300 000,and the desired ending materials inventory is $240 000,calculate the budgeted cost of materials for the year if the materials cost per unit is $60.
A) $1 740 000
B) $1 860 000
C) $1 800 000
D) $2 040 000
Q3) From the following data calculate the estimated cash received from credit sales during the month of May.Credit sales for March,$25 000; April,$30 000; May,$18 000. Credit sales are normally settled in the following pattern: 50% in the month of sale,40% in the month following the sale,and 10% in the second month following the sale.
A) $12 000
B) $21 000
C) $9 000
D) $23 500
Q4) The master budget is a set of __________ budgets for a future period.
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Page 11
Chapter 10: Costvolumeprofit Analysis
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Sample Questions
Q1) In deciding whether to undertake a special order at a reduced price:
A) the effect on existing customers should be considered.
B) whether the order will make a contribution to fixed costs should be considered.
C) the opportunity cost of forgone regular sales should be considered.
D) all of the options should be considered.
Q2) Mixed costs possess both ________ and ________ characteristics.
Q3) The break-even point will (increase/decrease)___________________ if there is a decrease in total fixed costs.
Q4) Which of the following statements is correct when assessing profitability with resource limitations?
A) Most businesses are not limited by market demand.
B) The most profitable result will be to maximise production of the product with the highest contribution margin per unit of the limiting factor.
C) The most profitable result will be to minimise production of the product with the highest overall contribution margin.
D) Limiting factors only relate to labour hours.
Q5) The horizontal axis of a CVP graph represents the ____________________ level.
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Page 12
Chapter 11: Costing and Pricing in an Entity
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Sample Questions
Q1) Under Australia accounting standards,which of the following are inventoriable product costs?
A) Depreciation of office equipment.
B) Salesmen's salaries.
C) Manufacturing costs.
D) Administration costs.
Q2) Cost drivers can be based on either volume or activity.Which of the following is an activity-based cost driver?
A) Labour hours.
B) Machine hours.
C) Units of output.
D) Time taken to set up machines.
Q3) The system used to allocate costs to cost objects is known as:
A) an accounting system.
B) a costing system.
C) a management system.
D) a resource system.
Q4) An indirect cost is linked to individual cost objects by identification of an appropriate cost ___________.
Q5) A cost object is an object that has a __________________ measurement of cost.
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Chapter 12: Capital Investment
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Sample Questions
Q1) One assumption of the net present value method of investment decision making is:
A) that the cash flows have occurred at the end of each relevant period.
B) that projects are suitable investments if the NPV equals zero.
C) that cash flows are constant throughout the project.
D) that projects with lower NPVs are more profitable.
Q2) The effect of dividend imputation on the PV analysis of investments will depend on the ______________ structure of the entity involved.
Q3) A manufacturer is considering the purchase of a new processing machine.The initial cost of the machine will be $300 000.The expected increase in net cash inflow as a result of the purchase is $75 000 for the first year and $160 000 for each of the next two years.The machine will have a salvage value of zero.At a discount rate of 5%,the net present value of the machine is:
A) $354 758
B) $41 201
C) $54 758
D) $68 934
Q4) Social and environment factors have become important concerns for a/an (increasing/decreasing)_________________number of investments.
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Page 14
Chapter 13: Financing the Business
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Sample Questions
Q1) A change in the days debtors turnover from 35 days to 28 days means that:
A) debtors are purchasing less on credit.
B) credit sales are increasing.
C) debtors are paying their accounts earlier.
D) debtors are paying their accounts later.
Q2) Ordinary shares may be transformed by:
A) issue of preference shares.
B) a share split.
C) a winding-up of the company.
D) all of the above.
Q3) Temporary assets should be financed with:
A) spontaneous sources of funding only.
B) spontaneous and permanent sources of funding.
C) temporary, permanent or spontaneous sources of funding.
D) temporary sources of funding only.
Q4) The _________________ principle is based on the premise of matching the maturity of the source of funding with its use.
Q5) Finance leases are (cancellable/non-cancellable)___________________ contractual arrangements.
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Chapter 14: Performance Measurement
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Sample Questions
Q1) The first reporting period for entities whose characteristics are covered under the National Greenhouse and Energy Reporting Act commenced on:
A) 1 July 2006
B) 1 July 2008
C) 1 July 2010
D) 1 July 2012
Q2) Responsibility centres include cost centres,revenue centres,profit centres and ____________ centres.
Q3) A statement setting out the entity's overall philosophy and objectives is a/an:
A) financial statement.
B) integrated statement.
C) mission statement.
D) income statement.
Q4) Material,energy and water consumption are typical environmental indicators of an organisation's (operational/management)_______________ performance.
Q5) _____________ performance measures are designed to capture performance on multiple tasks,individual and team-based rewards,and short- and long-term rewards.
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