Question 1

When applying the principle of duality to the balance sheet equation, an increase in assets will not normally result in:

Accepted Answer

A)  an increase in liabilities. 
B)  an increase in another asset. 
C)  an increase in owners' equity. 
D)  a decrease in another asset. 
A)  an increase in liabilities. 
B)  an increase in another asset. 
C)  an increase in owners' equity. 
D)  a decrease in another asset.

Question 2

The Club of Winston Churchill has the following items disclosed on its balance sheet. The only item missing is owners' equity:   What are the values of the club's total assets and net assets?

Accepted Answer

A)  Total assets $293 500 and net assets $113 500 
B)  Total assets $293 500 and net assets $110 000 
C)  Total assets $308 500 and net assets $98 500 
D)  Total assets $238 500 and net assets $110 000 
A)  Total assets $293 500 and net assets $113 500 
B)  Total assets $293 500 and net assets $110 000 
C)  Total assets $308 500 and net assets $98 500 
D)  Total assets $238 500 and net assets $110 000

Question 3

Liquidity refers to the ease with which assets can be converted to cash in the normal course of business.

Accepted Answer

A) True 
 B)False

Question 4

Bart Corporation reports these balances in its accounting system. Determine the balance of the Retained Profits account.

Accepted Answer

A)  $360 000 
B)  $580 000 
C)  $620 000 
D)  $780 000 
A)  $360 000 
B)  $580 000 
C)  $620 000 
D)  $780 000

Question 5

An operating cycle may exceed 12 months and be longer than an accounting cycle.

Accepted Answer

A) True 
 B)False

Question 6

If a worksheet does not balance and the imbalance is not caused by a transposition, single-entry or double-entry error, then it must be an addition or subtraction error.

Accepted Answer

A) True 
 B)False

Question 7

The Club of Winston Churchill has the following items disclosed on its balance sheet as at 30 June:   What is the value of the club's current assets as at 30 June?

Accepted Answer

A)  $25 000 
B)  $65 000 
C)  $68 500 
D)  $93 500 
A)  $25 000 
B)  $65 000 
C)  $68 500 
D)  $93 500

Question 8

A mortgage payable that had only 12 months left before due for repayment would be reclassified from a non-current liability to a current liability.

Accepted Answer

A) True 
 B)False

Question 9

At 30 June 2014, the non-current asset section of the balance sheet of Qantas included leasehold aircraft and engines valued at cost, $17 131 million and after depreciation and impairment, a written-down value $11 075 million. [Source: Note 15. Property, Plant and Equipment, Qantas Annual Report 2014, p. 85).

Accepted Answer

The answer of At 30 June 2014, the non-current asset...

Question 10

The most liquid type of asset is:

Accepted Answer

A)  bills receivable. 
B)  cash. 
C)  investment in listed shares. 
D)  inventory. 
A)  bills receivable. 
B)  cash. 
C)  investment in listed shares. 
D)  inventory.

Question 11

When a liability is paid, which of the following is true?

Accepted Answer

A)  Total assets and total liabilities remain the same. 
B)  Total assets and total owners' equity decrease. 
C)  Total assets decrease by the same amount that total liabilities increase. 
D)  Total assets and total liabilities decrease. 
A)  Total assets and total liabilities remain the same. 
B)  Total assets and total owners' equity decrease. 
C)  Total assets decrease by the same amount that total liabilities increase. 
D)  Total assets and total liabilities decrease.

Question 12

A major difference between current and non-current assets is that the future benefits of current assets will expire in a short period of time, whereas the future benefits of all non-current assets will decline over a longer period.

Accepted Answer

A) True 
 B)False

Question 13

Amounts owed by a business enterprise to external parties are described as:

Accepted Answer

A)  assets. 
B)  liabilities. 
C)  equities. 
D)  revenue. 
A)  assets. 
B)  liabilities. 
C)  equities. 
D)  revenue.

Question 14

A balance sheet provides information on the liquidity of the entity.

Accepted Answer

A) True 
 B)False

Question 15

On 31 May, after many months of planning, Macy opened a bike shop by investing $10 000 of his own money. On 31 May he spent 20% of it to pay the rent for three months from 1 June on a store location, and the balance on furnishings and fixtures that had been delivered and set up the night before. A friend had loaned Macy $6000, all of which he used to purchase inventory on 31 May, prior to opening. If Macy prepared a balance sheet as at 31 May, what would be the balances for total assets and total liabilities? Total Assets Total Liabilities

Accepted Answer

A)  $10 000 $6000 
B)  $14 000 $6000 
C)  $16 000 $6000 
D)  $16 000 $10 000 
A)  $10 000 $6000 
B)  $14 000 $6000 
C)  $16 000 $6000 
D)  $16 000 $10 000

Question 16

Which of the following equations is correct?

Accepted Answer

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

Question 17

Blanche started a business by contributing $24 000 cash and a truck valued at $40 000. The company then purchased equipment by paying the $24 000 cash as a down payment (which accounted for half its purchase price), and financed the other half by signing a note payable at the bank. After the above transactions, Blanche's company balance sheet is: Assets Liabilities Owners' Equity

Accepted Answer

A)  $64 000 $0$64 000 
B)  $88 000 $0$88 000 
C)  $88 000 $24 000$64 000 
D)  $112 000$24 000$88 000 
A)  $64 000 $0$64 000 
B)  $88 000 $0$88 000 
C)  $88 000 $24 000$64 000 
D)  $112 000$24 000$88 000

When applying the principle of duality to the balance sheet equation, an increase in assets will not normally result in:

The Club of Winston Churchill has the following items disclosed on its balance sheet. The only item missing is owners' equity: What are the values of the club's total assets and net assets?

Liquidity refers to the ease with which assets can be converted to cash in the normal course of business.

Bart Corporation reports these balances in its accounting system. Determine the balance of the Retained Profits account.

An operating cycle may exceed 12 months and be longer than an accounting cycle.

If a worksheet does not balance and the imbalance is not caused by a transposition, single-entry or double-entry error, then it must be an addition or subtraction error.

The Club of Winston Churchill has the following items disclosed on its balance sheet as at 30 June: What is the value of the club's current assets as at 30 June?

A mortgage payable that had only 12 months left before due for repayment would be reclassified from a non-current liability to a current liability.

The most liquid type of asset is:

When a liability is paid, which of the following is true?

A major difference between current and non-current assets is that the future benefits of current assets will expire in a short period of time, whereas the future benefits of all non-current assets will decline over a longer period.

Amounts owed by a business enterprise to external parties are described as:

A balance sheet provides information on the liquidity of the entity.

Which of the following equations is correct?

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

When applying the principle of duality to the balance sheet equation, an increase in assets will not normally result in:

The Club of Winston Churchill has the following items disclosed on its balance sheet. The only item missing is owners' equity: What are the values of the club's total assets and net assets?

Liquidity refers to the ease with which assets can be converted to cash in the normal course of business.

Bart Corporation reports these balances in its accounting system. Determine the balance of the Retained Profits account.

An operating cycle may exceed 12 months and be longer than an accounting cycle.

If a worksheet does not balance and the imbalance is not caused by a transposition, single-entry or double-entry error, then it must be an addition or subtraction error.

The Club of Winston Churchill has the following items disclosed on its balance sheet as at 30 June: What is the value of the club's current assets as at 30 June?

A mortgage payable that had only 12 months left before due for repayment would be reclassified from a non-current liability to a current liability.

The most liquid type of asset is:

When a liability is paid, which of the following is true?

A major difference between current and non-current assets is that the future benefits of current assets will expire in a short period of time, whereas the future benefits of all non-current assets will decline over a longer period.

Amounts owed by a business enterprise to external parties are described as:

A balance sheet provides information on the liquidity of the entity.

Which of the following equations is correct?

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