Accounting for Decision Making

Which of the following is not a business transaction?

• Purchasing inventory

• Incurring interest on a business loan

• A business owner purchasing a new home

• Receiving cash payment for services provided

Which of the following is not an accounting report?

• Statement of employee job satisfaction

• Statement of financial position

• Statement of profit or loss

• Statement of cash flows

The steps in the process of accounting take place in the following order:

• measuring, identifying, decision making, communicating.

• identifying, measuring, communicating, decision making.

• identifying, communicating, measuring, decision making.

• identifying, decision making, measuring, communicating.

Which one of the following is not grouped together under property, plant and equipment?

• Land

• Vehicles

• Inventory

• Machinery

At what stage of the accounting process are business transactions analysed, recorded and classified?

• Measuring

• Communicating

• Decision making

• Identifying

A supplier, when considering offering credit to a new customer, is most interested in the customer’s:

• ability to pay off debts as they fall due.

• annual dividends.

• taxable income.

• compliance with accounting standards.

The internal user of accounting information is the:

• customer.

• local council.

• auditor from the Australian Tax Office.

• office manager.

The information that would be of most interest to an organisation’s production manager is:

• the ability to pay off debts as they fall due.

• annual dividends.

• continuity of orders for the factory.

• the company tax rate.

An external user of accounting information is the:

• payroll officer.

• supplier.

• production manager.

• inventory clerk.

A bank requesting accounting information is looking for:

• the amount of tax that should be paid.

• cash flows from dividends paid.

• the ability of the entity to repay a loan.

• environmental aspects of the business.