Please answer the following questions and explain why? 1.Which of the following statements relating to an income statement is true?

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1.Which of the following statements relating to an income statement is true?

Select one:

a. It provides information on an organisation’s financial performance for a specified period of time

b. The expenses may include estimates made by a firm’s management 

c. It matches a firm’s revenues to its expenses to determine the entities financial performance or equity

d. All the above statements are true

e. None of the above statements are true

2.Which of following transactions would NOT be included in the determination of Brisbane Ltd’s profit for the current period.

1. Brisbane Ltd sold product for cash;

2. The firm’s Unearned revenue account decreased during the period;

3. The firm incurred Salaries expenses, but these were not paid during the period;

4. Sold a truck for more than its ‘book value’;

5. Depreciated the firm’s equipment

Select one:

a. 1, 2 and 3

b. 2, 3 and 5 

c. 3, 4 and 5

d. 4 and 5

e. None of the above, all of the above transactions would impact on the determination of profit

3.The management of Perth Ltd determines that an intangible asset should be amortised over a five-year period. At the end of the financial year, the effect on the accounting equation is:

Select one:

a. A liability increased and an asset decreased 

b. Total assets decreased and owners’ equity decreased

c. Total assets decreased and a liability decreased

d. A liability increased and owners’ equity decreased

e. None of the above

4.Sydney Logistics Ltd negotiated a fee of$160,000 during the 2018 accounting period as the proposed payment from a client to provide operational support during the 2019 accounting period. In 2018 the negotiation will:

Select one:

a. Increase total assets by $160k and liabilities by $160k 

b. Increase equity and total assets both by $160

c. Decrease liabilities by $160k and increase equity by $560k

d. Increase equity and liabilities in total by $160k and assets by $160k

e. None of the above

5.Canberra Ltd earned sales commission which will be paid for in 2 months’ time. What is the

The management of Canberra Ltd declared a final dividend that will be paid in the following accounting period. What is the effect on the firm’s accounting equation?

Select one:

a. An asset increased and another asset decreased

b. An asset decreased and equity decreased

c. A liability increased and equity decreased 

d. An asset decreased and a liability decreased

e. None of the above

6.Hobart Ltd uses only the Australian dollar to measure/report accounting transactions. What assumption specifically underlies this approach?

Select one:

a. Accounting entity

b. Historical cost concept

c. Timeliness

d. Going concern

e. None of the above 

7.Which of the following results in the recognition of an expense?

Select one:

a. Write-down of inventories

b. Interest charged by the bank

c. Amortisation of intangible assets

d. All of the above result in the recognition of expenses

e. None of the above result in the recognition of expenses 

8.Which of the following statements is true?

Select one:

a. If the total liabilities owed by a business total $110,000 and owner’s equity totals $30,000, assets total $140,000 

b. If total assets decreased by $100,000 during a specific period and liabilities decreased by $40,000 during the same period, the period’s change in equity was a $60,000 decrease

c. If owners equity increased by $150,000 during a specific period and liabilities decreased by $20,000 during the same period the period’s change in assets was an $130,000 increase

d. All of the above are true

e. None of the above are true

9. ‘Unearned Service Revenue’ is classified within a firm’s financial statements as:

Select one:

a. As a revenue account

b. As a non-current asset account

c. As an intangible asset account

d. As an equity account 

e. None of the above

10.Which of the following transactions should result in the recognition of revenue?

Select one:

a. Sale of goods on credit 

b. Provided services for a client in return for merchandise

c. Sale of an asset for great than its ‘book value’

d. All of the above, i.e. all result in the recognition of revenue

e. None of the above, i.e. no option results in the recognition of revenue

11.he correct account classification for the following is:

  1. Asset revaluation reserve
  2. Cash sales
  3. Prepaid Interest
  4. Amortisation expense
  5. Dividends payable

Select one:

a. 1. Revenue 2. Expense 3. Expense 4. Liability 5. Revenue

b. 1. Owners’ equity 2. Revenue 3. Asset 4. Expense 5. Liability 

c. 1. Revenue 2. Owners’ equity 3. Asset 4. Expense 5. Liability

d. 1. Owners’ equity 2. Revenue 3. Owners’ equity4. Liability 5. Revenue

e. None of the abov

12.Which of the following may not be classified as an expense within a firm’s financial statements?

Select one:

a. Wages and salaries

b. Dividend paid to shareholders

c. Interest paid to bank 

d. Depreciation on factory unit

e. None of the above

13.Which of the following items is/are normally classified as equity?

Select one:

a. Minority interest / Outside equity interest

b. Retained earnings 

c. Asset revaluation reserve

d. All of the above are classified as equities

e. None of the above are classified as equities

14.Which accounting concept is involved in the requirement that a firm’s financial statements are prepared immediately following the end of the reporting period.

Select one:

a. Materiality

b. Timeliness 

c. Disclosure

d. Understandability

e. None of the above

15.Please refer the image

Select one:

a. $660,000 

b. $540,000

c. $600,000

d. $450,000

e. None of the above are correct



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