An external user of accounting information is the:
a. payroll officer.
*b. supplier.
c. production manager.
d. inventory clerk.
Correct answer: b
Learning Objective 1.2 ~ Outline the importance of accounting and its role in decision making by various users
A bank requesting accounting information is looking for:
a. the amount of tax that should be paid.
b. cash flows from dividends paid.
*c. the ability of the entity to repay a loan.
d. environmental aspects of the business.
Correct answer: c
Learning Objective 1.2 ~ Outline the importance of accounting and its role in decision making by various users
Which of these would not be considered an internal user of accounting information?
a. The human resources manager.
*b. The chairman of CPA Australia.
c. The chief financial officer.
d. The purchasing officer.
Correct answer: b
Learning Objective 1.2 ~ Outline the importance of accounting and its role in decision making by various users
Which of the following are differences between management and financial accounting?
Types of reports produced.
The users of reports.
The format of reports.
Frequency of reports.
a. I and III only.
b. II, III and IV only.
c. I and II only.
*d. all of the above.
Correct answer: d
Learning Objective 1.3 ~ Explain the differences between financial accounting and management accounting
Management accounting reports are prepared:
*a. to provide up-to-date information to managers for decision making.
b. to provide information for the shareholders of the business entity.
c. based only on historical figures.
d. based on GAAP and IASB accounting standards.
Correct answer: a
Learning Objective 1.3 ~ Explain the differences between financial accounting and management accounting
The content of management accounting reports is governed by:
a. the Australian Securities and Investment Commission.
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.
Correct answer: d
Learning Objective 1.3 ~ Explain the differences between financial accounting and management accounting
Which of the following reports would not be prepared for financial accounting purposes?
Statement of Financial Position.
Statement of Cash Flows.
*c. Statement of Management Performance.
Statement of Profit or Loss.
Correct answer: c
Learning Objective 1.3 ~ Explain the differences between financial accounting and management accounting
An SME (small to medium sized enterprise) is a business entity with:
*a. annual revenue between $2 million and $250 million.
b. annual revenue less than $2 million.
c. annual revenue between $2 million and $500 million.
d. annual revenue greater than $250 million.
Correct answer: a
Learning Objective 1.4 ~ Explain the role of accounting information in the business planning process
Which of the following is not a benefit of a business plan?
Provides a formal statement of direction and purpose for the business entity.
Provides management and employees with a set of clearly defined goals.
*c. Allows management to set their own goals.
d. Assists in the evaluation process of the business entity.
Correct answer: c
Learning Objective 1.4 ~ Explain the role of accounting information in the business planning process
The evaluation process of a business plan allows:
more effective use of scarce resources.
improvement in internal communications.
detection of variances between actual and budgeted results.
*d. all of the above.
Correct answer: d
Learning Objective 1.4 ~ Explain the role of accounting information in the business planning process
The number of countries preparing financial reports using global accounting standards is: