Financial Accounting 9th Edition by Miller-Nobles Test bank

Answer: B
Difficulty: Moderate
AACSB: Analytical Thinking, Reflective Thinking
Learning Objective: 5 Use financial statements and return on assets (ROA) to evaluate business performance
A-Head: How do you use financial statements to evaluate business performance

71. Which of the following is used to calculate average assets for the return on assets calculation?

1. Average assets = (Beginning assets + Ending assets) × 2
2. Average assets = (Beginning assets - Ending assets) ÷ 2
3. Average assets = (Beginning assets + Ending assets) ÷ 2
4. Average assets = (Beginning assets - Ending assets) × 2

Answer: C
Difficulty: Moderate
AACSB: Analytical Thinking, Reflective Thinking
Learning Objective: 5 Use financial statements and return on assets (ROA) to evaluate business performance
A-Head: How do you use financial statements to evaluate business performance

Short answer: Write the word or phrase that best completes each statement or answers the question.

72. Assume MetAmbit Ltd had profit of $2500 for the year ended 31 December 2016. Its beginning and ending assets were $35,500 and $18,500, respectively. Calculate MetAmbit's return on assets (ROA). (Round your percentage answer to two decimal places.)

Answer: 9.26%
Difficulty: Moderate
AACSB: Analytical Thinking, Reflective Thinking
Learning Objective: 5 Use financial statements and return on assets (ROA) to evaluate business performance
A-Head: How do you use financial statements to evaluate business performance

Multiple choice: Choose the alternative(s) that best completes the statement or answers the question.

73. The financial examination of a company's financial records is called a(n):

1. appraisal.
2. criminal investigation.
3. audit.
4. financial analysis.

Answer: C
Difficulty: Basic
AACSB: Analytical Thinking, Reflective Thinking
Learning Objective: 6 Describe the organisations and principles that govern accounting
A-Head: What are the organisations and principles that govern accounting?

74. Which of the following activities would NOT be included in the role of an accountant in public practice?

1. internal auditing
2. liquidation
3. tax planning
4. external auditing

Answer: A
Difficulty: Moderate
AACSB: Analytical Thinking, Reflective Thinking
Learning Objective: 6 Describe the organisations and principles that govern accounting
A-Head: What are the organisations and principles that govern accounting?

75. Which of the following is NOT one of the main professional accounting bodies in Australia?

1. Institute of Public Accountants
2. Chartered Accountants Australia and New Zealand
3. Certified Public Accountants of Australia
4. Certified Practising Accountants of Australia

Answer: C
Difficulty: Moderate
AACSB: Analytical Thinking, Reflective Thinking
Learning Objective: 6 Describe the organisations and principles that govern accounting
A-Head: What are the organisations and principles that govern accounting?

76. In Australia, Accounting standards are formulated by the:

1. AASB.
2. FRC.
3. IASB.
4. ASIC.

Answer: A
Difficulty: Basic
AACSB: Analytical Thinking, Reflective Thinking
Learning Objective: 6 Describe the organisations and principles that govern accounting
A-Head: What are the organisations and principles that govern accounting?

77. Which of the following concepts (or principles) would dictate that a person with three different businesses keeps three different bank accounts?

1. Going concern assumption
2. Entity concept
3. Accounting period concept
4. Accrual basis of accounting

Answer: B
Difficulty: Basic
AACSB: Analytical Thinking
Learning Objective: 6 Describe the organisations and principles that govern accounting