What is the net profit for 2016

Assignment Help Financial Accounting

Reference no: EM133675412

Accounting for Business Decisions

Decisions/Accounting for Managers

Q1. Which of the following use accounting information?
Shareholders
Banks
Trade unions

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3

Q2. Which of the following organisations may use financial statements?
Australian Taxation Office
A church congregation
A university

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3

Q3. Financial performance means:

A. providing information about the cash position of an entity.
B. setting out the enterprise's set of financial resources and obligations at a point in time.
C. identifying, measuring and communicating economic information to allow informed decisions.
D. generating new resources from day-to-day operations over a period of time.

Q4. Which of the following statements is NOT true?

A. Judgements need to be made in determining profit.
B. Attempts are made to measure incomplete transactions.
C. The impact of transactions is recognised when cash is received or paid.
D. Estimates are made of certain balance sheet items.

Q5. Which type of information would be of most interest to trade creditors?

A. Dividends declared
B. Ability to pay debts
C. Pollution of waterways adjacent to the firm's factory
D. Continuity of orders for the firm's products

Q6. 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.

Q7. Does measuring economic performance involve: (i) estimates; (ii) adjustments; and/or (iii) judgements?

A. (i) and (ii) only
B. (i) and (iii) only
C. (ii) and (iii) only
D. (i), (ii) and (iii)

Q8. During 2016, a company makes credit sales of $500 000, of which $375 000 is collected at year-end. It pays $200 000 in expenses and owes $25 000 for electricity used during 2016. Accrual profit is:

A. $150 000.
B. $175 000.
C. $275 000.
D. $300 000.

Q9. During 2016, a company makes credit sales of $500 000, of which $375 000 is collected at year-end. It pays $200 000 in expenses and owes $25 000 for electricity used during 2016. What would the profit be if cash accounting rather than accrual accounting was used?

A. $150 000
B. $175 000
C. $275 000
D. $300 000

Q 10. What is the net profit for 2016 given the following information?

                                  $
Cash sales                10 000
Credit sales               30 000
Cash received from accounts receivable 22 000
Wages paid               8000
Wages owing at year-end    5000

A. $22 000
B. $27 000
C. $32 000

Q11. During 2016, a company makes credit sales of $600 000, of which $350 000 is collected at year-end. It pays $220 000 in expenses and owes $20 000 for electricity used during 2016. Profit according to accrual accounting is:

A. $130 000.
B. $380 000.
C. $360 000.
D. $710 000.

Q12. During 2016, a company makes credit sales of $600 000, of which $350 000 is collected at year-end. It pays $220 000 in expenses and owes $20 000 for electricity used during 2016. What would the profit be if cash accounting rather than accrual accounting were used?

A. $130 000.
B. $110 000.
C. $380 000.
D. $730 000.

Q13. Use the information given below to answer the following question.

                                $
Cash sales           20 000
Credit sales            60 000
Cash received from accounts receivable 42 000
Wages paid             10 000
Wages owing at year-end 8000

What is the net profit for 2016?

A. $70 000
B. $62 000
C. $104 000
D. $112 000

Q14. Which of the following use accounting information?
Shareholders
Banks
Trade unions

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3

Q15. Which of the following is NOT shown in the heading of the balance sheet?

A. The name of the enterprise
B. The title of the report
C. The period covered by the report
D. All of the answers are shown in the heading

Q16. Which of the following is NOT an asset?

A. Marketable securities
B. Accounts receivable
C. Provisions for employee entitlements
D. Inventory

Q17. Which of the following statements about an income statement is NOT true?

A. An income statement provides information on an organisation's profitability at a certain point in time.
B. An income statement includes revenues earned during a period, and expenses incurred in earning the revenues.
C. The expenses may include depreciation.
D. For revenue to be included, it is not necessary for cash to have been received.

Q18. Which of the following statements about an income statement is true?

A. An income statement provides information on an organisation's profitability at a certain point in time.
B. An income statement deducts liabilities from assets to determine shareholders' equity.
C. The expenses relate to cash payments.
D. For revenue to be included, it is not necessary for cash to have been received.

Q19. Assets are initially recorded at cost. What assumption/concept underlies this procedure?

A. Accounting entity
B. Monetary
C. Historical cost
D. Going concern

Q20. A company's assets are differentiated from the senior manager's. What assumption/concept underlies this procedure?

A. Accounting entity
B. Monetary
C. Historical cost
D. Going concern

Q21. Financial statements are prepared on the premise that the organisation will continue operations in the foreseeable future. To which financial statement assumption does this relate?

A. Accounting entity
B. Monetary
C. Historical cost
D. Going concern

Q22. 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

Q23. 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

Q24. The owner of a corner store keeps separate private and business transactions. To which financial statement assumption does this relate?

A. Materiality
B. Accounting entity
C. Accounting period
D. Going concern

Q25. A balance sheet:

A. lists the assets and liabilities at present cash values.
B. shows how the resources of an entity change during a period of time.
C. shows all facts affecting the financial position of the entity.
D. lists the assets, liabilities and owners' equity at a specific point in time.

Reference no: EM133675412

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