Deck 1: Decision Making and the Role of Accounting

Question 1

Which of these is not an economic decision?

A)Religious belief
B)Taking out a loan
C)Purchasing a mobile phone
D)Renting a flat

Answer 1

A

Question 2

The term used to describe the economic events which are the inputs of the accounting information system is:

A)Contracts
B)Transactions
C)Deals
D)Agreements

Answer 2

B

Question 3

Which of these is not a characteristic of financial accounting?

A)Compliance with accountant standards
B)Annual reporting
C)Verification by audit
D)Format determined by the user

Answer 3

D

Question 4

There are four steps in the accounting process,which of the steps is most concerned with the classification and summarisation of financial data?

A)Identification
B)Measurement
C)Recording
D)Communication

Question 5

Which of the four stages of the accounting process is considered to require the most extensive training,experience and judgement?

A)Identifying
B)Measuring
C)Recording
D)Communicating

Question 6

Financial reports intended to serve the diverse needs of a variety of external user groups who are unable to obtain their own accounting information are known as:

A)General-purpose financial reports
B)Specific-purpose financial reports
C)Management reports
D)Internal reports

Question 7

The job of the modern accountant is a challenging one.The most critical requirement is:

A)Neatness
B)Punctuality
C)Ability to manage change
D)Ability to add up

Question 8

The conversion of raw materials into finished products by a manufacturing entity is which of the following?

Question 9

Accounting is a profession that has evolved in response to society's need for economic information to help people make:

A)Dollars
B)Decisions
C)Demands
D)Donations

Question 10

External decision-makers:

A)Exist outside the organisation but have an interest in it
B)Reside overseas
C)Operate from branch locations
D)Must be owners

Question 11

Which of the following has been the most influential in redefining the role of accountants as analysts and decision makers rather than as mainly number-crunchers?

A)The collapse of major company groups
B)The trend towards globalisation
C)Developments in information technology
D)The increase in demand for non-financial information

Question 12

The two broad branches into which accounting is divided are:

A)Company and partnership
B)Management and financial
C)Taxation and audit
D)Commercial and non-commercial

Question 13

Special-purpose financial statements provide information mainly for the use of which of these parties?

Question 14

How many of the following decisions would be made by external as opposed to internal decision-makers? Investing funds in the business,assessing an application for a loan,expanding the product range,hiring staff.

A)A 1
B)B 2
C)C 3
D)D 4

Question 15

Which of the following is not normally an economic decision?

A)Buying household groceries
B)Exchanging goods at a swap meet
C)Booking a holiday over the Internet
D)Choosing a marriage partner

Question 16

Which type of information about J Company would be of most interest to its trade creditors?

A)Ability to pay debts as they fall due
B)Annual dividends
C)Taxable income
D)Continuity of orders for the factory

Question 17

'General purpose' in the term general-purpose financial reports refers to the fact that the reports are:

A)Generally reliable
B)Useful to a variety of users
C)Generally up to date
D)Generally available

Question 18

The term 'general-purpose financial statements' refers to the fact that the information in the reports is:

A)Generally reliable but not perfect
B)Useful for general purposes but not in making specific decisions
C)Average information for several accounting periods
D)Prepared to provide general information for use by all external users

Question 19

Which type of information about J Company would be of most interest to the Australian Taxation Office?

A)Sales
B)Taxable income
C)Continuity of orders for the factory
D)Compliance with accounting standards

Question 20

External decision makers can be divided into four groups,to which of these groups do investors and creditors belong?

A)Managers and governing bodies
B)Recipients of goods and services
C)Resource providers
D)Reviewers and overseers

Question 21

Which statement is incorrect?

A)An audit committee acts as a corporate governance device
B)An audit committee helps to ensure the independence of the internal audit process
C)The ASX requires listed companies to disclose whether they have an audit committee
D)Very few large companies in Australia have audit committees

Question 22

The economic activities of an entity that are the raw material of accounting are known as t__________________.

Question 23

Select the incorrect statement from the following:

A)The liability of shareholders to contribute to the debts of an insolvent company is limited
B)A sole proprietorship is an accounting entity
C)Individual partners are personally liable for partnership debts
D)Partnerships are regarded as separate legal entities

Question 24

Behaviour which conforms to established professional standards is said to be:

A)Legal
B)Ethical
C)Illegal
D)Complying

Question 25

Accounting reports prepared for a range of users who do not have the authority to obtain the information they need for decision-making are called _____________-purpose financial reports.

Question 26

________________ is often called the 'language of business'.

Question 27

The accounting function within an organisation that includes costing,budgeting and planning is known as m____________ accounting.

Question 28

Maintaining a satisfactory relationship between an entity's resource inputs and its output of product or services is referred to as:

A)Planning
B)Efficiency
C)Organising
D)Effectiveness

Question 29

In the accounting profession the initials CPA stand for:

A)Certified Practising Accountant
B)Company Professional Accountant
C)Competent Practising Auditor
D)Chief Planning Associate

Question 30

The type of accounting that deals with the collection,allocation and control of costs in an organisation is called:

A)Budgeting
B)Cost accounting
C)Internal auditing
D)None of the above

Question 31

The type of behaviour that would not be regarded as ethical is:

A)Blaming others for your own mistakes
B)Using confidential information for personal gain
C)Manipulating the financial statements
D)Accepting a pay rise

Question 32

How many of the following are differences between management and financial accounting?
O Types of reports produced
O Frequency of reports
O The format of reports
O The users of reports

A)One
B)Two
C)Three
D)Four

Question 33

The address of the website of CPA Australia is:

A)www.cpaaustralia.com.au
B)www.cpa.com.au
C)www.aaa.com.au
D)www.CPA.org.au

Question 34

Accounting is the process of identifying,measuring,recording and communicating economic information to interested parties for _______________-making.

Question 35

In order to avoid later disputes it is desirable that a partnership agreement:

A)Is in writing
B)Should have the partners sharing profits and losses equally
C)Should set up the partnership as a separate legal entity
D)Should set out in detail how the how all likely transactions are to be recorded.

Question 36

Accounting reports prepared for users who have the authority to obtain the information they need for decision-making are called ___________-purpose financial reports.

Question 37

The area of accounting that deals with the preparation of plans and forecasts of future operations is called:

A)Auditing
B)Costing
C)Budgeting
D)Liquidating

Question 38

Which statement relating to ethics is not correct?

A)A high standard of ethical behaviour is in the long-term interest of businesses
B)The accounting professional bodies have set down rules of professional conduct for their members
C)Ethics is concerned with whether human actions are proper or improper
D)Ethical decisions are always easy to make

Question 39

Which type of information about J Company would be of most interest to its production manager?

A)Continuity of orders for the factory
B)Taxable income
C)Annual dividends
D)Compliance with accounting standards

Question 40

Accounting work with the primary purpose of verifying the financial statements is called:

A)Tax accounting
B)Consulting
C)Auditing
D)Management accounting

Question 41

The three main types of business entities used in modern society are the sole trader,the partnership and the _____________.

Question 42

Ownership units in a company are called s__________________.

Question 43

The initials ICAA stand for _________________ of _______________ ______________ in _________________.

Question 44

Behaviour conforming to acceptable moral standards is said to be e_________________.

Question 45

The initials CPA stand for __________ __________ __________.

Question 46

A business that is unable to pay its long-term debts is referred to as i________________.