Question 1

The external user of accounting information is the:
A)Purchasing officer.
B)Director of Research and Development.
C)Inventory clerk.
D)Customer.

Accepted Answer

An external user is someone who is outside of the organization and therefore cannot access internal accounting information. A customer is an example of an external user who relies on accounting information, such as financial statements, to make decisions about purchasing goods or services. The purchasing officer, director of research and development, and inventory clerk are all internal users who have access to internal accounting information within the organization.

Question 2

Which of the following is not a role of the Australian Securities and Investments Commission?
A)To uphold the law uniformly,effectively and quickly.
B)To promote confident and informed participation in the financial system by investors and consumers.
C)To be responsible for ensuring that financial institutions can honour their commitments
D)To make information about companies and other bodies available to the public.

Accepted Answer

Ensuring that financial institutions can honour their commitments falls under the responsibility of the Australian Prudential Regulation Authority (APRA), not ASIC.

Question 3

The difference between bookkeepers and accountants is:
A)just in the name because bookkeepers and accountants always do the same job
B)that bookkeepers perform all the steps in the accounting process but accountants only do steps one and two.
C)that accountants perform all the steps in the accounting process but bookkeepers only do steps one and two.
D)that bookkeepers require a higher level of education to perform their duties than accountants.

Accepted Answer

Bookkeepers typically handle basic record-keeping tasks such as data entry, maintaining ledgers, and reconciling accounts. In contrast, accountants analyze financial data, prepare tax returns, and provide financial advice. Accountants perform higher-level accounting functions than bookkeepers, which include interpreting financial data, creating financial statements, and recommending courses of action based on financial analysis. Therefore, accountants perform all the steps in the accounting process, while bookkeepers only do steps one and two. Keep in mind that while bookkeepers do not necessarily require a higher level of education than accountants, they do need a thorough understanding of basic accounting principles and proficiency with accounting software.

Question 4

Legally enforceable accounting standards that apply to Australian companies are issued by
A)the Financial Reporting Council.
B)the Australian Stock Exchange.
C)the Australian Securities and Investments Commission.
D)the Australian Accounting Standards Board.

Accepted Answer

Legally enforceable accounting standards that apply to Australian companies are issued by the Australian Accounting Standards Board (AASB). The Financial Reporting Council (FRC) oversees the AASB's strategic direction, and the Australian Securities and Investments Commission (ASIC) is responsible for enforcing compliance with the accounting standards. The Australian Stock Exchange (ASX) sets listing rules for companies but does not issue accounting standards.

Question 5

Which of these is not likely to be the responsibility of a bookkeeper?
A)calculating and paying wages
B)checking a customer's credit rating
C)preparing the bank reconciliations
D)selecting an accounting package to the used by the entity

Accepted Answer

The answer of Which of these is not likely to...

Question 6

Which of these would not be considered an internal user of accounting information?
A)The chairman of ASIC
B)The human resources manager
C)The Chief Financial Officer
D)The Production supervisor

Accepted Answer

The chairman of ASIC is an external user of accounting information as they are a regulator of the accounting profession and not a part of the company's internal operations. The human resources manager, Chief Financial Officer, and Production supervisor are all internal users of accounting information as they are part of the company's management and use accounting information for decision-making within the organization.

Question 7

The Corporations Act 2001 is primarily enforced by
A)the Financial Reporting Council.
B)the Australian Securities Exchange.
C)the Australian Securities and Investments Commission.
D)the Australian Accounting Standards Board.

Accepted Answer

The Australian Securities and Investments Commission (ASIC) is responsible for enforcing the Corporations Act 2001 in Australia. ASIC is the government regulator tasked with ensuring that companies and financial markets operate fairly, transparently, and in compliance with Australian law. The Financial Reporting Council (A) is responsible for overseeing the accounting and auditing standards in Australia, but it does not have enforcement powers. The Australian Securities Exchange (B) is a stock exchange where companies can list their shares for trading but does not have regulatory powers. The Australian Accounting Standards Board (D) also sets accounting standard but does not have enforcement powers.

Question 8

The body that oversees the operations of financial institutions such as banks and building societies in Australia is:
A)APRA.
B)ASX.
C)ACCC.
D)ATO.

Accepted Answer

APRA (Australian Prudential Regulation Authority) is the regulatory body that oversees the operations of financial institutions in Australia. ASX (Australian Securities Exchange) is the primary stock exchange in Australia, ACCC (Australian Competition and Consumer Commission) is responsible for promoting competition and protecting consumers in the Australian market, and ATO (Australian Taxation Office) is responsible for managing the tax system in Australia.

Question 9

The internal user of accounting information is the:
A)Building maintenance manager.
B)Supplier.
C)Environmental lobby group.
D)Auditor from the Australian Tax Office.

Accepted Answer

The building maintenance manager is an internal user of accounting information as they need to keep track of expenses related to building maintenance and repairs. The supplier, environmental lobby group, and auditor from the Australian Tax Office are all external users of accounting information.

Question 10

The information that would be of most interest to an organisation's production manager is:
A)ability to pay off debts as they fall due
B)continuity of orders for the factory.
C)annual dividends.
D)taxable income.

Accepted Answer

The continuity of orders for the factory is crucial for the production manager, as it directly affects the ability of the factory to maintain production levels and meet targets. The manager needs to know if there will be a consistent demand for the products so they can plan for the necessary staff, equipment, and supplies. The other options are more relevant to the financial health and profitability of the organization, which are important but not directly tied to the production manager's responsibilities.

Question 11

Select the option that does not represent a difference between financial and management reporting.
A)The level of detail in the reports
B)Whether the reports are quantitative only or are both quantitative and qualitative
C)How up-to-date the report is
D)Whether the reports are useful for decision-making

Accepted Answer

Both financial and management reporting should be useful for decision-making. Therefore, option D does not represent a difference between the two types of reporting. Options A, B, and C all represent differences between financial and management reporting.

Question 12

The Corporations Act gets its powers from which section of the Australian Constitution?
A)50
B)51
C)52
D)53

Accepted Answer

The Corporations Act 2001 (Cth) draws its power from Section 51(xx) of the Australian Constitution, which grants the Commonwealth parliament the power to make laws with respect to "foreign corporations and trading or financial corporations formed within the limits of the Commonwealth".

Question 13

How many of the following are differences between management and financial accounting?
*Types of reports produced
*Frequency of reports
*The format of reports
*The users of reports
A)One
B)Two
C)Three
D)Four

Accepted Answer

All four options listed are differences between management and financial accounting. Management accounting reports are typically more detailed and forward-looking, while financial accounting reports are more focused on presenting historical financial information to external stakeholders. Management accounting reports may be produced weekly or even daily, while financial accounting reports are typically produced quarterly, semi-annually, or annually. The format of management accounting reports may be highly customizable to meet the needs of specific users, while financial accounting reports must follow specific accounting standards and formats. Finally, the users of management accounting reports are generally internal stakeholders such as managers and employees, while the users of financial accounting reports are typically external stakeholders such as investors, regulators, and creditors.

Question 14

The content of management accounting reports is governed by:
A)the Australian Securities Exchange.
B)the Corporations Act 2001
C)CPA Australia and the Institute of Chartered Accountants of Australia.
D)there are no specific rules governing the content of management accounting reports

Accepted Answer

Management accounting reports are internal documents used by management for decision-making purposes, and there are no specific external rules or regulations governing their content.

Question 15

The steps in the process of accounting take place in the following order:
A)measuring,identifying,decision making,communicating
B)identifying,communicating,measuring,decision making
C)identifying,measuring,communicating,decision making
D)identifying,decision making,measuring,communicating

Accepted Answer

The first step in accounting is to identify and analyze financial transactions. The second step is to measure those transactions in monetary terms. The next step is to communicate the information in financial statements, and finally, decision making occurs based on the information provided in those statements. Therefore, the correct order is identifying, measuring, communicating, and decision making.

Question 16

Management accounting reports are prepared:
A)based on GAAP and IASB accounting standards
B)to provide information for a wide range of stakeholders
C)to provide up to date information to managers for decision making
D)based only on historical figures

Accepted Answer

Management accounting reports are prepared to provide up to date information to managers for decision making. They are not necessarily based on GAAP and IASB standards and may also provide information to a limited range of stakeholders rather than a wide range. While they may use historical figures as a basis for analysis, they may also incorporate future projections and forecasts.

Question 17

Which of the following countries has not adopted IFRS?
A)Germany
B)Russia
C)Japan
D)USA

Accepted Answer

The United States (USA) has not fully adopted IFRS. While some US companies may choose to use IFRS voluntarily or for specific purposes, such as filing with the SEC as a foreign private issuer, the US generally follows its own accounting standards, known as Generally Accepted Accounting Principles (GAAP).

Question 18

Which of the following is not a business transaction?
A)incurring interest on a business loan
B)purchasing office supplies
C)receiving fees for services
D)hiring a new employee

Accepted Answer

Hiring a new employee is not a business transaction in the traditional sense as it does not involve the exchange of goods or services for money. However, it may have financial implications for the business, such as the payment of wages and benefits.

Question 19

The number of countries in which financial reports are prepared using global accounting standards is:
A)60
B)80
C)100
D)more than 120

Accepted Answer

As of 2021, more than 120 countries have adopted or given permission to use global accounting standards such as International Financial Reporting Standards (IFRS) or their local equivalent. Therefore, option D is the correct answer.

Question 20

The information about a customer that would be of most interest to a supplier is:
A)ability to pay off debts as they fall due.
B)annual dividends.
C)taxable income.
D)compliance with accounting standards.

Accepted Answer

The ability of a customer to pay off their debts as they fall due is of utmost importance to a supplier. It determines whether the supplier will get paid for their goods or services on time, or if they will have to chase the customer for payment, wait for extended periods, or even take legal action to recover their debts. This information can be obtained through credit checks or monitoring the customer's payment behavior. Annual dividends, taxable income, and compliance with accounting standards may not directly impact the supplier's relationship with the customer.

Quiz 1: Introduction to Accounting

The external user of accounting information is the:

Which of the following is not a role of the Australian Securities and Investments Commission?

The difference between bookkeepers and accountants is:

Legally enforceable accounting standards that apply to Australian companies are issued by

Which of these is not likely to be the responsibility of a bookkeeper?

Which of these would not be considered an internal user of accounting information?

The Corporations Act 2001 is primarily enforced by

The body that oversees the operations of financial institutions such as banks and building societies in Australia is:

The internal user of accounting information is the:

The information that would be of most interest to an organisation's production manager is:

Select the option that does not represent a difference between financial and management reporting.

The Corporations Act gets its powers from which section of the Australian Constitution?

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

The content of management accounting reports is governed by:

The steps in the process of accounting take place in the following order:

Management accounting reports are prepared:

Which of the following countries has not adopted IFRS?

Which of the following is not a business transaction?

The number of countries in which financial reports are prepared using global accounting standards is:

The information about a customer that would be of most interest to a supplier is: