Week 4 Quiz

Which of the following is not an Internal user of financial information?

• Government

• Managers

• Shareholders

• Employees

Which of these users of financial information makes business decisions, such as how much tax a business is expected to pay for a given period?

• Lenders

• Customers

• Government

• Employees

Select the incorrect statement among the following:

• The Cost Concept requires that the Cost of assets are to be recorded at historical cost.

• According to the accrual concept revenue are to be recorded when cash is received

• The matching concept requires that revenue and expenses should be recognised in the same period.

• According to the going concern concept the business is assumed to operate into the unforeseeable future.

Which of the following in a house building company would NOT be classified as an item of inventory?

• Bricks held on a building site

• Bags of cement stored in the company's warehouse

• Stores of cash held on site to meet small day to day expenses

• Land held in the company's land bank on which houses will be constructed.

Which of these can be classified as a current asset item on the Balance Sheet?

• Trade Payables

• Bank Overdraft

• Cash and Cash Equivalent

• Shareholders’ Funds

Which of these is not a variation of the Accounting Equation?

• Asset = Liability + Owners Equity

• Owners’ Equity = Asset – liability

• Liability = Asset – Owners Equity

• Asset = Owners Equity – Liability

Which of these items are labelled as an intangible asset on the balance sheet?

• Property Plant and Machinery

• Goodwill

• Cash at hand

• Inventory

Which of the following would be classified as cash and cash equivalents in the statement of financial position of an insurance company?

• Money due from customers to pay their annual insurance premium

• Money received from customers to pay their annual insurance premiums awaiting payment into the bank

• A refund due from the insurance company's bank relating to overcharging for services in the past

• A refund due to customers for premiums on insurance policies cancelled

Which of these is not a Limitation of the Statement of Financial Position?

• SOFP is just a snapshot at a point in time

• Values on the balance sheet are book value not market value

• SOFP shows how a business’s assets are financed

• Values on the SOFP are quantitative in nature

Which of the following is not a method of depreciating a non-current asset?

• Straight line Method

• Weighted Average Method

• Reducing Balance Method

• Unit of Production Method