Question 1

Which of the following best represents examples of liquid assets?

Accepted Answer

A)  Cash and office equipment 
B)  Cash and accounts receivable 
C)  Cash and inventory 
D)  Cash and prepaid assets 
A)  Cash and office equipment 
B)  Cash and accounts receivable 
C)  Cash and inventory 
D)  Cash and prepaid assets

Question 2

The worksheet is a form of:

Accepted Answer

A)  journal. 
B)  financial statement. 
C)  working paper. 
D)  ledger. 
A)  journal. 
B)  financial statement. 
C)  working paper. 
D)  ledger.

Question 3

What is the value of total assets if current assets equal $2200, current liabilities equal $1500, non-current liabilities equal $800 and shareholders' equity equals $2500?

Accepted Answer

A)  $2200 
B)  $3700 
C)  $4800 
D)  $7000 
A)  $2200 
B)  $3700 
C)  $4800 
D)  $7000

Question 4

Gibson, Inc. a retailer, reports the following information:   What is the most likely amount for the firm's current assets?

Accepted Answer

A)  $41 600 
B)  $24 000 
C)  $22 400 
D)  $13 800 
A)  $41 600 
B)  $24 000 
C)  $22 400 
D)  $13 800

Question 5

Non-current assets are best described as:

Accepted Answer

A)  assets that extend benefits beyond the coming financial year or operating cycle. 
B)  tangible assets that extend benefits beyond the coming year or operating cycle, whichever is longer. 
C)  assets that are depreciated for a maximum of 40 years. 
D)  assets that provide economic benefits over the coming year. 
A)  assets that extend benefits beyond the coming financial year or operating cycle. 
B)  tangible assets that extend benefits beyond the coming year or operating cycle, whichever is longer. 
C)  assets that are depreciated for a maximum of 40 years. 
D)  assets that provide economic benefits over the coming year.

Question 6

The Davis Company purchases a new delivery truck by making a 10% cash down payment and signing a note payable for the balance. How will assets, liabilities and owners' equity be affected by this transaction? Assets Liabilities Owners' Equity

Accepted Answer

A)  decrease increase no change 
B)  increase increase no change 
C)  increase decrease increase 
D)  no change increase decrease 
A)  decrease increase no change 
B)  increase increase no change 
C)  increase decrease increase 
D)  no change increase decrease

Question 7

An entity's owners' equity is one-third of its total assets. Its liabilities total $100 000. What is the amount of its total assets?

Accepted Answer

A)  $100 000 
B)  $150 000 
C)  $200 000 
D)  $300 000 
A)  $100 000 
B)  $150 000 
C)  $200 000 
D)  $300 000

Question 8

A common error encountered when examining a worksheet that does not balance is the discovery that the error is mathematically divisible by nine. This type of error is commonly referred to as:

Accepted Answer

A)  an addition or subtraction error. 
B)  a single-entry error. 
C)  a transposition error. 
D)  a double-entry error. 
A)  an addition or subtraction error. 
B)  a single-entry error. 
C)  a transposition error. 
D)  a double-entry error.

Question 9

In relation to the format of a balance sheet, large and complex organisations will summarise assets under broad headings.

Accepted Answer

A) True 
 B)False

Question 10

Aria was trying to determine the amount of total equity in her music business. An exclusive list of accounts is listed below:   Based on this information, the total owners' equity in Aria's business was:

Accepted Answer

A)  $2000 
B)  $10 000 
C)  $14 000 
D)  $16 000 
A)  $2000 
B)  $10 000 
C)  $14 000 
D)  $16 000

Question 11

X Ltd sold 2000 computers in June. The terms of sale included a 12-month warranty. The warranty provides that X Ltd will meet the cost of repairs that are associated with faulty parts attributable to manufacture. Past experience indicates that 10% of computer sales lead to warranty claims at an average cost of $70 for parts and $100 for labour, per computer.
Discuss whether the warranty commitment would meet the definition and recognition criteria of a liability to the firm at 30 June.

Accepted Answer

Definition: the warranty commitment repr

Question 12

On a balance sheet, assets are usually classified as:

Accepted Answer

A)  Current Assets, Fixed Assets, Plant and Equipment, and Intangible Assets. 
B)  Current Assets, Long Term Assets, Plant and Equipment, and Intangible Assets. 
C)  Current Assets, Fixed Assets and Long-term Investments. 
D)  Current Assets and Non-current Assets. 
A)  Current Assets, Fixed Assets, Plant and Equipment, and Intangible Assets. 
B)  Current Assets, Long Term Assets, Plant and Equipment, and Intangible Assets. 
C)  Current Assets, Fixed Assets and Long-term Investments. 
D)  Current Assets and Non-current Assets.

Question 13

Which of the following is not a valid expression of the balance sheet equation?

Accepted Answer

A)  Assets = Liabilities + Owners' Equity 
B)  Assets - Liabilities = Owners' Equity 
C)  Assets - Owners' Equity = Liabilities 
D)  Liabilities + Assets = Owners' Equity 
A)  Assets = Liabilities + Owners' Equity 
B)  Assets - Liabilities = Owners' Equity 
C)  Assets - Owners' Equity = Liabilities 
D)  Liabilities + Assets = Owners' Equity

Question 14

Briefly describe four sources of the common types of errors that may be made in recording transactions (events) in the worksheet.

Accepted Answer

(i) single-entry error i.e., the incompl

Question 15

Which of the following best describes the purpose of the balance sheet?

Accepted Answer

A)  To summarise assets and liabilities for the accounting period 
B)  To report the inflows and outflows of cash 
C)  To balance current period revenues with those of the previous period 
D)  To report assets, liabilities and owners' equity as of a specific date 
A)  To summarise assets and liabilities for the accounting period 
B)  To report the inflows and outflows of cash 
C)  To balance current period revenues with those of the previous period 
D)  To report assets, liabilities and owners' equity as of a specific date

Question 16

In the situation where an entity is insolvent, equity holders will be paid only whatever remains after all liabilities are paid.

Accepted Answer

A) True 
 B)False

Question 17

The balance sheet equation can be represented as: Assets - Liabilities = Equity

Accepted Answer

A) True 
 B)False

Question 18

The balance sheet shows the position of the entity:

Accepted Answer

A)  at a point in time. 
B)  when it is insolvent only. 
C)  when it is making profits. 
D)  for a specified period of time. 
A)  at a point in time. 
B)  when it is insolvent only. 
C)  when it is making profits. 
D)  for a specified period of time.

Question 19

During an accounting period, total assets decreased by $5m while owners' equity increased by $8m. The change in total liabilities during this period must have been a:

Accepted Answer

A)  $3m increase. 
B)  $3m decrease. 
C)  $13m increase. 
D)  $13m decrease. 
A)  $3m increase. 
B)  $3m decrease. 
C)  $13m increase. 
D)  $13m decrease.

Question 20

What is the operating cycle of a business? How does this impact the classification of assets into current and non-current categories?

Accepted Answer

Operating cycle: refers to the time betw

Which of the following best represents examples of liquid assets?

The worksheet is a form of:

What is the value of total assets if current assets equal $2200, current liabilities equal $1500, non-current liabilities equal $800 and shareholders' equity equals $2500?

Gibson, Inc. a retailer, reports the following information: What is the most likely amount for the firm's current assets?

Non-current assets are best described as:

The Davis Company purchases a new delivery truck by making a 10% cash down payment and signing a note payable for the balance. How will assets, liabilities and owners' equity be affected by this transaction? Assets Liabilities Owners' Equity

An entity's owners' equity is one-third of its total assets. Its liabilities total $100 000. What is the amount of its total assets?

A common error encountered when examining a worksheet that does not balance is the discovery that the error is mathematically divisible by nine. This type of error is commonly referred to as:

In relation to the format of a balance sheet, large and complex organisations will summarise assets under broad headings.

Aria was trying to determine the amount of total equity in her music business. An exclusive list of accounts is listed below: Based on this information, the total owners' equity in Aria's business was:

On a balance sheet, assets are usually classified as:

Which of the following is not a valid expression of the balance sheet equation?

Briefly describe four sources of the common types of errors that may be made in recording transactions (events) in the worksheet.

Which of the following best describes the purpose of the balance sheet?

In the situation where an entity is insolvent, equity holders will be paid only whatever remains after all liabilities are paid.

The balance sheet equation can be represented as: Assets - Liabilities = Equity

The balance sheet shows the position of the entity:

During an accounting period, total assets decreased by $5m while owners' equity increased by $8m. The change in total liabilities during this period must have been a:

What is the operating cycle of a business? How does this impact the classification of assets into current and non-current categories?

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Performance and the Worksheet

Presentation of Cash Flows

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters

Exam 5: Presentation of Financial Position and the Worksheet

Which of the following best represents examples of liquid assets?

The worksheet is a form of:

What is the value of total assets if current assets equal $2200, current liabilities equal $1500, non-current liabilities equal $800 and shareholders' equity equals $2500?

Gibson, Inc. a retailer, reports the following information: What is the most likely amount for the firm's current assets?

Non-current assets are best described as:

The Davis Company purchases a new delivery truck by making a 10% cash down payment and signing a note payable for the balance. How will assets, liabilities and owners' equity be affected by this transaction? Assets Liabilities Owners' Equity

An entity's owners' equity is one-third of its total assets. Its liabilities total $100 000. What is the amount of its total assets?

A common error encountered when examining a worksheet that does not balance is the discovery that the error is mathematically divisible by nine. This type of error is commonly referred to as:

In relation to the format of a balance sheet, large and complex organisations will summarise assets under broad headings.

Aria was trying to determine the amount of total equity in her music business. An exclusive list of accounts is listed below: Based on this information, the total owners' equity in Aria's business was:

On a balance sheet, assets are usually classified as:

Which of the following is not a valid expression of the balance sheet equation?

Briefly describe four sources of the common types of errors that may be made in recording transactions (events) in the worksheet.

Which of the following best describes the purpose of the balance sheet?

In the situation where an entity is insolvent, equity holders will be paid only whatever remains after all liabilities are paid.

The balance sheet equation can be represented as: Assets - Liabilities = Equity

The balance sheet shows the position of the entity:

During an accounting period, total assets decreased by $5m while owners' equity increased by $8m. The change in total liabilities during this period must have been a:

What is the operating cycle of a business? How does this impact the classification of assets into current and non-current categories?

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Performance and the Worksheet

Presentation of Cash Flows

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters