Financial Reporting
Chapter Exam Questions
Course Introduction
Financial Reporting is an essential course that introduces students to the principles, standards, and practices used in the preparation and interpretation of financial statements for business entities. The course covers key topics such as the accounting cycle, measurement of assets and liabilities, revenue recognition, and the presentation and disclosure of financial information in accordance with international and local accounting standards. Emphasis is placed on analyzing financial statements to assess organizational performance and inform decision-making, as well as understanding the regulatory environment that governs financial reporting. By the end of the course, students will be equipped with the skills to prepare, interpret, and critically evaluate financial reports for a range of stakeholders.
Recommended Textbook
Financial Accounting An Integrated Approach 6th Australia Edition by Trotman
Available Study Resources on Quizplus 17 Chapters
777 Verified Questions
777 Flashcards
Source URL: https://quizplus.com/study-set/3730 Page 2
Chapter 1: Introduction to Financial Accounting
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/74401
Sample Questions
Q1) The owner withdraws inventory for his own use from the business.To which financial statement assumption does this relate?
A) Materiality
B) Monetary
C) Accounting period
D) Accounting entity
Answer: D
Q2) The life of a business is divided into equal periods to determine profit or loss for that period.What assumption/concept underlies this procedure?
A) Materiality
B) Monetary
C) Accounting period
D) Accounting entity
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Measuring and Evaluating Financial Position and
Financial Performance
Available Study Resources on Quizplus for this Chatper
60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/74400
Sample Questions
Q1) Which of the following is NOT an expense?
A) Dividends declared
B) Amount owed to electrician to be paid in the next period
C) Cost of goods sold
D) Wages
Answer: A
Q2) What is James's owners' equity?
A) $110
B) $2590
C) $2810
D) $7810
Answer: C
Q3) ssume no dividends were declared during the year.If the balance of retained profits at the start of the year was $50 000,what was the profit for the year?
A) $30 000
B) $80 000
C) $50 000
D) $40 000
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: The Double-Entry System
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/74399
Sample Questions
Q1) An account for advertising that had appeared in a local newspaper was received.There was no previous record of the charge.
A) An asset increased and another asset decreased.
B) An asset decreased and an expense increased.
C) An asset decreased and a liability decreased.
D) A liability increased and an expense increased.
Answer: D
Q2) A business purchases inventory for $220,paying $50 cash and owing the rest.The journal entry will include:
A) a debit to accounts payable of $170.
B) a debit to inventory of $170.
C) a credit to accounts payable of $50.
D) a credit to accounts payable of $170.
Answer: D
Q3) What was Livermore's net profit for the year ended 30 June 2016?
A) $1750
B) $2000
C) $3250
D) $8950
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Record-Keeping
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/74398
Sample Questions
Q1) What source document supports the provision of services on credit?
A) Supplier's invoice received by the business
B) A copy of a credit note issued by the vendor
C) Cash receipt
D) Invoice sent by the business to a customer
Q2) What is the closing balance of inventory?
A) $120 000
B) $140 000
C) $200 000
D) $260 000
Q3) Which of the following errors,each considered individually,would cause the trial balance totals to be unequal?
A) A transaction was not posted.
B) A payment of $64 for supplies was posted as a debit of $46 to Supplies and a credit of $46 to cash.
C) A payment of $131 to a creditor was posted as a debit of $131 to accounts payable and a debit of $131 to accounts receivable.
D) Cash received from customers on account was posted as a debit of $240 to cash and a credit of $240 to accounts payable.
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Accrual Accounting Adjustments
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/74397
Sample Questions
Q1) If the Prepaid rent account before adjustment at the end of the month has a debit balance of $1500,representing a payment made on the first day of the month,and if the monthly rent was $1000,the amount of prepaid rent that would appear on the balance sheet at the end of the month,after adjustment,is:
A) $500.
B) $1000.
C) $1500.
D) $2500.
Q2) Which of the following does NOT appear in the balance sheet?
A) Commission payable
B) Prepaid commission
C) Commission revenue received in advance
D) Commission revenue
Q3) What is the journal entry made by TV Manufacture Ltd on 7 October 2016?
A) Dr Warranty expense Cr Warranty liability
B) Dr Warranty liability Cr Warranty expense
C) Dr Warranty liability Cr Cash
D) Dr Cash Cr Warranty liability
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Financial Reporting Principles, accounting
Standards and Auditing
Available Study Resources on Quizplus for this Chatper
42 Verified Questions
42 Flashcards
Source URL: https://quizplus.com/quiz/74396
Sample Questions
Q1) Which of the following statements about comparability is true?
A) A company has to use the same accounting methods in all parts of a company.
B) The same depreciation method should be employed for all assets of a company.
C) The same accounting methods must be used as those used by other companies in the industry.
D) None of the answers provided.
Q2) Identify the accounting concept or principle that relates to the statement in the following question: If a particular item is,by reason of its nature or its size,significant to a proper understanding of the situation,it should be separately stated.
A) Relevance
B) Faithful representation
C) Materiality
D) Comparability
Q3) Use of the same accounting methods over time facilitates:
A) disclosure.
B) relevance.
C) comparability.
D) faithful representation.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/74395
Sample Questions
Q1) What was the bank balance in Simon Ltd's books at 31 October before the adjustments?
A) $15600 Dr
B) $15800 Cr
C) $17200 Cr
D) $18800 Dr
Q2) What was the bank balance in Alison Ltd's books at 31 December before the adjustments?
A) $7800 Dr
B) $7900 Cr
C) $8600 Dr
D) $9400 Cr
Q3) In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly service charge appearing on the bank statement,$45,is to:
A) add it to the balance as per bank statement.
B) deduct it from the balance as per bank statement.
C) add it to the balance per company records.
D) deduct it from the balance per company records.
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Accounts Receivable and Further
Record-Keeping
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/74394
Sample Questions
Q1) In posting the total of the cash column in a cash receipts journal,the entry that would be made is:
A) Dr Cash.
B) Cr Cash.
C) Dr each of the specific accounts that comprise the total.
D) Cr each of the specific accounts that comprise the total.
Q2) Which of these items is the source document for the purchase journal?
A) Purchase order
B) Invoice from supplier
C) Duplicate of invoice sent to customer
D) Copy of receipt sent to customer
Q3) What was the balance of the creditors control account at 30 June 2016?
A) $5200
B) $5500
C) $6000
D) $9200
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Inventory
Available Study Resources on Quizplus for this Chatper
42 Verified Questions
42 Flashcards
Source URL: https://quizplus.com/quiz/74393
Sample Questions
Q1) What was the value of cost of goods sold of Algo,using the LIFO assumption in a perpetual inventory system?
A) $2600
B) $2700
C) $2720
D) $1400
Q2) A company discovered that inventory that cost $1000 and normally sells for $1200 has become obsolete and will be scrapped next month.The effect of the adjusting journal entry is to:
A) decrease profit by $1000 and decrease total assets by $1000.
B) decrease profit by $1200 and decrease total assets by $1000.
C) decrease profit by $1200 and decrease total assets by $1200.
D) decrease profit by $1000 and not affect total assets.
Q3) Which of the following statements about the perpetual inventory control method is NOT true?
A) When a sale is made,cost of goods sold is increased.
B) When inventory is purchased,it is treated as an expense.
C) A separate record is kept for each item of inventory.
D) An inventory count can reveal inventory losses.
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Noncurrent Assets
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/74392
Sample Questions
Q1) Assuming Norman Ltd used the reducing balance method of depreciation and a rate of 40 per cent,the depreciation expense for the year ending 30 June 2017 is:
A) $9720.
B) $10 800.
C) $11 800.
D) none of the answers provided.
Q2) A truck that cost $250 000 and had accumulated depreciation of $180 000 was sold for $50 000 cash in June 2017.This transaction will:
A) increase assets and decrease profits.
B) increase assets and increase profits.
C) decrease assets and decrease profits.
D) decrease assets and increase profits.
Q3) What was the accumulated depreciation at 30 June 2017?
A) $0
B) $1500
C) $3000
D) $4500
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Liabilities
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/74391
Sample Questions
Q1) What is the interest expense for the first six months?
A) $4426
B) $5000
C) $5312
D) $6000
Q2) As a result of some major excavations this year for mining,PLM Ltd is obliged to carry out land restoration at the end of the excavations.This cost of the restoration will be shown in the balance sheet under:
A) accounts payable.
B) accruals.
C) provisions.
D) contingent liability.
Q3) Which of the following is a liability?
A) Unearned revenue
B) Sales revenue
C) Accrued revenue
D) Prepayments
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Completing the Balance Sheet
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/74390
Sample Questions
Q1) If Sky-High Ltd used the equity basis,what revenue would it record for the year ended 31 December 2016 in respect of its investment in Down Ltd?
A) $90 000
B) $150 000
C) $190 000
D) $280 000
Q2) Which of the following statements about the equity method is NOT true?
A) The investment asset is valued at cost on acquisition.
B) The investment asset is increased for the investing company's share of the investee company's profit.
C) When the investee company pays a dividend,the investing company credits dividend revenue.
D) The investment asset is decreased for the investing company's share of the investee company's loss.
Q3) A credit balance in retained profits:
A) equals the balance of cash available for dividends.
B) indicates that a profit was earned in the last financial period.
C) represents the profits earned and not paid out in dividends.
D) indicates that a loss was earned in the last financial period.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Revenue and Expense Recognition: Additional Concepts
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/74389
Sample Questions
Q1) If revenue increased by 30 per cent,with no effect on expenses other than income tax,what would be the effect on net after tax profit?
A) It would increase by $6600.
B) It would decrease by $6600.
C) It would increase by $4620.
D) It would decrease by $4620.
Q2) At what point would you expect revenue from sales of building materials to be recognised?
A) During production
B) On completion of production
C) At point of sale or delivery
D) When cash is received
Q3) How much profit was earned during the third year if the completion of production method was used?
A) $360 000
B) $440 000
C) $800 000
D) $400 000
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/74388
Sample Questions
Q1) The retained profits of Franko Ltd at the beginning of the year were $270 000 and at the end of the year $320 000.Net profit after tax for the year was $510 000.During the year,$100 000 was transferred to general reserve.The proposed final dividend at the beginning of the year was $200 000 and at the end of the year $250 000.What was the amount of interim dividend paid during the year?
A) $110 000
B) $160 000
C) $260 000
D) $360 000
Q2) Which of the following is a financing activity?
A) Repayment of loan by other entity
B) Share buyback
C) Discount received
D) Discount allowed
Q3) Which of the following is NOT classified as a financing activity?
A) Issue of shares
B) Dividend payments
C) Sale of equipment
D) Borrowing from a finance company
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
50 Verified Questions
50 Flashcards
Source URL: https://quizplus.com/quiz/74387
Sample Questions
Q1) Additional credit sales of $2 million (cost price $1.5 million)are made.This transaction will:
A) increase ROA,ROE and CR.
B) increase ROA and ROE but not CR.
C) increase ROA and CR but not ROE.
D) increase ROA,increase ROE and decrease CR.
Q2) The operating profit after tax of Calculus Ltd is $10 million and sales are $100 million.Asset turnover is 1.25 times p.a.What is Calculus Ltd's ROA?
A) 0.0125
B) 0.1
C) 0.125
D) 1.25
Q3) Which of the ratios listed helps to indicate whether current liabilities could be paid without having to sell the inventory?
A) Current ratio
B) Profit margin
C) Quick ratio
D) Return on assets
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Accounting Policy Choices
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/74386
Sample Questions
Q1) What would be the effect on net profit after tax if the reducing balance method were used rather than the straight-line method?
A) There would be a $375 000 increase.
B) There would be a $375 000 reduction.
C) There would be a $262 500 increase.
D) There would be a $262 500 reduction.
Q2) What effect would such a policy change have on net profit before tax?
A) There would be a $75 000 reduction.
B) There would be a $45 000 reduction.
C) There would be a $30 000 reduction.
D) There would be no effect.
Q3) Which of the following would be increased by an accounting policy change involving use of the reducing balance method of depreciation in place of the straight-line method,leading to an increase in depreciation expense?
A) Assets
B) Net profit
C) Retained profits
D) Expenses
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Sustainability Reporting
Available Study Resources on Quizplus for this Chatper
21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/74385
Sample Questions
Q1) Which of the following are Environmental GRI performance indicators?
(i)Emissions: direct greenhouse gas emissions.
(ii)Compliance: monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.
(iii)Products and services: percentage of products sold and their packaging materials that are reclaimed,by category.
A) (i)and (ii)only
B) (i)and (iii)only
C) (ii)and (iii)only
D) (i), (ii)and (iii)
Q2) Which of the following is NOT disclosed in sustainability reports?
A) Assessments of the impact on the local community
B) Policies and practices regarding sourcing from local suppliers
C) Initiatives to reduce greenhouse gas emissions
D) Accounting policies and estimates
To view all questions and flashcards with answers, click on the resource link above.