11 Accounting Quiz 1

'Accountability' refers to:

• being held responsible to another authority for actions carried out

• keeping a record of all money that has gone out of an organisation

• the communication of information to various parties

• the form that communication takes; for example, graphs

Creditors are interested in accounting information because:

• they wish to keep a close watch on the business's financial stability

• they wish to decide whether or not they will receive their money

• they wish to decide whether to extend credit facilities

• all of the options

Which of the following statements is incorrect?

• Accounting is a discipline or body of knowledge.

• Accounting will stop businesses from failing.

• Accounting provides information to interest parties.

• Accounting records, processes, reports and interprets information.

Which of the following factors will influence the future development of accounting?

• Legal factors

• Technology trends

• Social expectations

• All of the options

Which of the following types of business organisations usually have limited liability for debts?

• Sole traders

• Partnerships

• Public companies

• All of the options

The Statement of Financial Position:

• shows the cash that the business received during the period

• shows the assets, liabilities and owner's equity of the business at a point in time

• shows the financial stability of the business at a point in time

• shows the financial performance of the business at a point in time

The audit report

• states if the financial reports are in accordance with the Corporations Act 2001 & relevant accounting standards

• contains an opinion that the auditor is satisfied that the financial statements present fairly the results of the operations & cash flows & the financial position

• states that the auditor has met the standards of being independent from the company being audited

• all of the options

Which of the following statements is correct?

• The Statement of Cash Flows shows the cash flows from the operating activities during the period.

• The Statement of Cash Flows shows the cash flows from operating activities during the period.

• The Statement of Cash Flows shows the cash flows used in financing activities during the period.

• All of the options.

The Statement of Profit or Loss shows:

• the equity for the period

• the revenues and expenses for the period

• the assets purchased during the period

• new loans acquired during the period

Which of the following statements is correct?

• An external auditor is an employee of the business.

• Dividends paid by a business are shown in the Statement of Profit or Loss.

• Net assets will always equal the equity of the business.

• The profit figure from the SOPL appears in the SOFP as a decrease to the equity figure.