Principles of Accounting
Mock Exam
Course Introduction
Principles of Accounting provides an introduction to fundamental accounting concepts and practices. The course covers the accounting cycle, including the recording, summarizing, and reporting of business transactions. Students will learn how to prepare and interpret financial statements such as the balance sheet, income statement, and cash flow statement. Topics include basic accounting terminology, the double-entry system, accrual versus cash accounting, internal controls, and ethics in accounting. By the end of the course, students will have a solid foundation to understand how accounting information supports business decision-making.
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) A user's main demand is for credible periodic reporting of an enterprise's financial position and performance.Credible means:
A) 100 per cent accurate.
B) easily understandable by users of financial statements.
C) sufficiently trustworthy and competently prepared for it to be used to make decisions.
D) relevant to the needs of decision-makers.
Answer: C
Q2) Which of the following statements about accrual accounting is NOT true?
A) The impact of transactions on the financial statements is recognised when the cash is received or paid.
B) The financial statements include estimates.
C) Judgements made by accountants affect profit.
D) Transactions are recognised at the time when revenue and expenses occur.
Answer: A
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) Sales less cost of goods sold equals:
A) gross profit.
B) net profit.
C) net assets.
D) net sales.
Answer: A
Q2) Wages of $30 000 were paid in June for work done in June;$5000 of wages were owed at end of June for work done in June;and an invoice for $8000 was received for June advertising to be paid in July.What are total expenses for June 2016?
A) $30 000
B) $35 000
C) $43 000
D) $30 000.
Answer: C
Q3) 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
Page 4
To view all questions and flashcards with answers, click on the resource link above.
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) Identify the journal entry required to correctly record the following transaction. Purchased goods on credit.
A) Dr Inventory
Cr Accounts payable
B) Dr Inventory
Cr Accounts receivable
C) Dr Accounts receivable
Cr Inventory
D) Dr Purchases
Cr Cash at bank
Answer: A
Q2) For the following transaction,identify the type of change that would have occurred in the accounting equation: Assets = Liabilities + Issued Capital + Opening retained profits + Revenue - Expenses - Dividends
12 months' depreciation was charged on the office building.
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: B
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) Which transaction represents a customer paying his/her account?
A) (5A)
B) (6A)
C) (7)
D) (8)
Q2) Which of the following accounts does NOT appear on a post-closing trial balance?
A) Insurance expense
B) Prepaid rent
C) Accumulated depreciation
D) Retained profits
Q3) Which of the following is NOT a source document of a business enterprise?
A) Trial balance
B) Purchase order
C) List of the day's collections
D) An invoice
Q4) Which of the following statements about closing the accounts is NOT true?
A) Sales revenue account is debited.
B) Depreciation account is credited.
C) Share capital is debited.
D) A net loss is debited to the retained profits account.
Page 6
To view all questions and flashcards with answers, click on the resource link above.
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) A machine purchased on 1 July 2016 cost $100 000 and has a zero estimated salvage value.The useful life of the machine is five years.If the machine was sold on 30 September 2018,what would its net book value be?
A) $45 000
B) $50 000
C) $55 000
D) None of the answers provided
Q2) XYZ invested $1 million with a bank for 1 year on 1 May 2016 at 9 per cent (interest payable at end of loan).What is the debit side of the adjusting entry at 30 June 2016?
A) Dr Accrued revenue receivable $15 000
B) Dr Interest revenue $15 000
C) Dr Unearned revenue $15 000
D) None of the answers provided
Q3) If a company neglects to make an adjustment for accrued expenses:
A) profit will be overstated and liabilities understated.
B) profit will be overstated and liabilities overstated.
C) profit will be overstated and assets understated.
D) profit will be understated and liabilities overstated.
To view all questions and flashcards with answers, click on the resource link above. Page 7
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) Systemic effects arise when:
A) the shares of a deceased estate are sold to enable a distribution to be made to beneficiaries.
B) market-wide changes in share prices come from the economic system.
C) an announcement is made regarding the future prospects of a particular company.
D) the takeover of a large public company is announced.
Q2) Which of the following is not a key point of the Framework?
A) Relevance and faithful representation are the primary qualitative characteristics that financial information should possess.
B) Consistency should not be an end in itself.
C) The concept of prudence should always take precedence over reliability.
D) Financial information may lose its relevance if there is undue delay in reporting it.
Q3) The return you earn by owning a share is:
A) the cash from dividends.
B) the current price of the share on the Australian Securities Exchange.
C) the change in the market price of the share.
D) cash from dividends plus the change in the market price of the share.
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) On 30 June,the petty cash fund of Charles Ltd was replenished when the count of petty cash on hand totalled $60.Vouchers revealed that postage expenses of $40 had been incurred.The journal entry to record replenishment was:
A) Dr Postage expense$40\(\quad \)\(\quad \)Cr Cash$40
B) Dr Postage expense$40\(\quad \)\(\quad \)CrPetty cash$40
C) Dr Petty cash$40\(\quad \)\(\quad \)\(\quad \)\(\quad \)Cr Cash$40
D) none of the answers provided.
Q2) 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
Q3) What was the final bank balance in Alison Ltd's ledger at 31 December?
A) $5400 Dr
B) $5400 Cr
C) $8600 Dr
D) $8600 Cr
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) Management uses the percentage-of-sales approach method to calculate the allowance for doubtful debts.Management calculated the allowance for doubtful debts on the basis of 2 per cent of sales.However,by year-end it was aware that the rate should have really been 3 per cent of sales.Management does not adjust the allowance for doubtful debts at year-end.As a result:
A) assets are overstated,and net profit is overstated.
B) assets are overstated,and net profit is understated.
C) assets are understated,and net profit is overstated.
D) assets are understated,and net profit is understated.
Q3) Which of the following is NOT a purpose served by special journals?
A) Reduces the number of postings to the general ledger.
B) Eliminates the general journal.
C) Reduces the number of entries requiring narrations.
D) Makes it easier to find errors.
Page 10
To view all questions and flashcards with answers, click on the resource link above.
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) If purchase prices are falling,which cost flow assumption provides the highest cost of goods sold?
A) FIFO
B) Annual weighted average
C) Moving weighted average
D) LIFO
Q2) Inventory with a value of $300 000 was written down to $250 000 in June 2016 because of falling prices in the industry.This transaction will:
A) decrease assets,profit and shareholders' equity.
B) decrease assets and profit,but not shareholders' equity.
C) decrease assets and shareholders' equity but not profit.
D) decrease assets and decrease shareholders' equity.
Q3) The entry to record a credit sale when the perpetual inventory method is employed will include a debit to:
A) cost of goods sold.
B) sales.
C) purchases.
D) inventory.
To view all questions and flashcards with answers, click on the resource link above.
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) What was the accumulated depreciation at 31 December 2017?
A) $21 000
B) $31 500
C) $42 000
D) $52 500
Q2) The equipment is to be depreciated by the reducing balance method (at twice the straight-line rate).What is the amount of depreciation for the first full year?
A) $40 000
B) $75 000
C) $80 000
D) $85 000
Q3) Which of the following would NOT be included in property,plant and equipment?
A) Land
B) Buildings
C) Furniture
D) Inventory
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) When unearned revenue increases:
A) cash increases.
B) an expense increases.
C) an expense decreases.
D) revenue increases.
Q2) The auditors informed the company that the provision for long service leave was understated by $100 000 at 30 June 2016 and that the account should be adjusted.The company adjusted the account so that:
A) liabilities increase and profit decreases.
B) liabilities increase but profit is unaffected.
C) profit increases but there is no effect on liabilities.
D) there is no effect on either profit or liabilities.
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) Which of the following statements about the general reserve account is NOT true?
A) A transfer to this account may be used to indicate to shareholders that it is unlikely to be paid out in dividends.
B) Amounts can be transferred back from it to retained profits.
C) The general reserve account provides an indication of where funds are invested.
D) The general reserve account appears under shareholders' equity in the balance sheet.
Q2) Which of the following are NOT eliminated in the preparation of consolidated financial statements?
A) Intercompany receivables
B) The account for the parent company's investment in the subsidiary
C) Intercompany sales and expenses
D) Assets of the subsidiary
Q3) The journal entry on 12 February 2016 would include:
A) Dr Interim dividend declared,$25 000.
B) Cr Cash,$25 000.
C) Cr Retained profits,$25 000.
D) none of the answers provided.
To view all questions and flashcards with answers, click on the resource link above.
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) 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
Q2) What is the effect of the error on 2015 cash from operations?
A) There is no cash effect.
B) It is $1200 too high.
C) It is $1800 too high.
D) It is $3000 too high.
Q3) Revenue from a credit sale should not be recognised until:
A) the goods have been paid for.
B) the warranty period has expired.
C) collection is reasonably assured.
D) it is certain that the goods will not be returned.
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) Which of the following is NOT a financing cash flow?
A) Dividends received
B) Issue of shares
C) The borrowing of $10 000 from the bank
D) Share buybacks
Q2) Which of the following is an operating cash flow?
A) Issue of shares
B) Purchase of equipment
C) Repayment of a loan
D) Receipt of cash from accounts receivable
Q3) The net operating profit of Patrick Ltd was $31 000.Depreciation expense was $10 000 and gain on sale of equipment was $2000.Accounts receivable increased by $15 000 and inventory decreased by $7000.Accounts payable decreased by $8000.What was the cash flow from operations?
A) $47 000
B) $39 000
C) $25 000
D) $23 000
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) What is the effect on ROA,which was 20 per cent prior to the change?
A) It increases.
B) It decreases.
C) There is no effect.
D) It cannot be determined from the information provided.
Q2) What was the number of days' inventory on hand?
A) 73 days
B) 69.5 days
C) 64 days
D) 50 days
Q3) Which of the following could explain a decrease in the quick ratio?
A) A change from FIFO to LIFO
B) A change in the depreciation method used
C) Slow-moving inventory
D) Increase in accounts payable
Q4) Which of the following would NOT decrease the return on equity ratio?
A) An increase in company income tax
B) Transfers from retained profits to general reserve
C) Reduced profit margins
D) Issue of shares
To view all questions and flashcards with answers, click on the resource link above. Page 17
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) Which of the following would be decreased by the change?
A) Cash
B) Cost of goods sold
C) Net profit
D) No accounts would be decreased
Q2) In which of the following areas has choice largely been made by a standard-setting body,legislators or by accepted practice,so that companies are NOT free to make their own decisions?
A) Selection of depreciation method
B) How to determine allowance for doubtful debts
C) Inventory valuation method
D) Whether to include goodwill in the balance sheet
Q3) Which of the following is NOT an area in which companies typically make policy accounting choices?
A) When to recognise revenue
B) The method of depreciation to use
C) How to value inventories
D) Dividend policy
To view all questions and flashcards with answers, click on the resource link above.
18
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) For which item is the Global Reporting Initiative not useful?
A) Demonstrating how the organisation is influenced by expectations about sustainable development
B) Sustaining the level of dividends to shareholders
C) Comparing performance within an organisation
D) Assessing sustainability performance
Q2) Which of the following is NOT a reason why a company would prepare a sustainability report?
A) Increasing the return to shareholders
B) Demonstrating a commitment to managing the environment
C) Increasing the company's reputation
D) Improvement of management reports
Q3) Which of the following is NOT a recent trend in sustainability reporting?
A) Corporate responsibility reporting helps companies grow their business and increase its value.
B) Corporate responsibility reporting has been combined with financial reporting.
C) Corporate responsibility reporting provides financial value.
D) Corporate responsibility reporting guarantees that dividends will be paid to shareholders.
To view all questions and flashcards with answers, click on the resource link above.
Page 19