Quiz Questions In Lectures Flashcards
Who is responsible for financial statements, planning and tax?
Chief Financial Officer
Treasurer
Controller
Controller
Which of the following is true?
Annual statements don’t require a Directors reports
Annual statements don’t require a cash flow statement
The prudence convention dictates that the most optimistic value should always be used
Annual statements don’t require a cash flow statement
Which two of the following are true?
Balance sheets take a long-term view of financial performance
Cash flow can be assessed using balance sheets
Value can be assed using balance sheets
Profit can be assessed using profit and loss statements
Value can be assed using balance sheets
Profit can be assessed using profit and loss statements
Which two of the following are true?
Long term assets should always balance with short term assets
Long term assets should always balance with long term liabilities
Assets should always balance with liabilities
Double entry accounting is a dishonest practice that involves counting things twice to ‘cook the books’
Double entry is the mechanism for creating accurate balance sheets
Assets should always balance with liabilities
Double entry is the mechanism for creating accurate balance sheets
Which two of the following are true?
A balance sheet should always balance
A balance sheet should never balance
A balance sheet can’t always balance
A balance sheet provides a snap-shot of a companies value but can be manipulated or ‘cooked’
A balance sheet provides an objective, accurate and reliable assessment of value
A balance sheet should always balance
A balance sheet provides a snap-shot of a companies value but can be manipulated or ‘cooked’
What would you use to help establish whether a company could meet their liabilities?
The Balance sheet
The Profit & Loss account
The Directors summary
The Auditors report
The Balance sheet
Which of the following is true?
A profit and loss statement provides a comprehensive view of a companies financial health
A range of different financial statements and some ‘reading between the lines’ is required to establish a sense of a companies financial health
A comprehensive view of financial health can be obtained by ensuring there is consistency between the various financial reports
A range of different financial statements and some ‘reading between the lines’ is required to establish a sense of a companies financial health
What do shareholder ratios show?
Show return on stakeholder equity
Show how productively a firm is using its assets
Show the firms return on investments
Show how quickly the firm can get its hands on cash
Show the ability of a firm to honor its depts.
Show return on stakeholder equity
A business has a ‘acid test’ value of 0.4. Which of the following is correct?
The business is definitely on the rocks
The business has loads of cash sitting around that could perhaps be working harder (maybe they are just about to make a big investment).
The business is appealing to someone looking to get their hands on quick cash
The business probably has high levels of inventory
The business probably has high levels of inventory
A business has a ‘acid test’ value of 8.2 Which of the two following are correct?
The business is definitely on the rocks
The business has loads of cash sitting around that could perhaps be working harder (maybe they are just about to make a big investment).
The business is appealing to someone looking to get their hands on quick cash
The business has high levels of inventory
The business has loads of cash sitting around that could perhaps be working harder (maybe they are just about to make a big investment).
The business is appealing to someone looking to get their hands on quick cash
If you were using ‘acid test’ to assess how productive a company is and they have a low value (0.3), which other measure would be appropriate to evaluate performance?
Inventory turnover ratio because it would indicate
how well they were using their stock (a acid test
value of 0.3 could suggest high inventory levels).
Inventory turnover ratio because it would indicate
that they profitability (a value of 0.3 would suggest
that they were struggling to be profitable)
Return on assets because it would tell you how much
return they were getting on assets and assets are a
key term used to calculate the acid test value
Inventory turnover ratio because it would indicate how well they were using their stock (a acid test value of 0.3 could suggest high inventory levels).
Based on the Transition Systems Architect accounts, which two of the following statements are true?
There is nothing to be alarmed about, everything looks in order
It is always a healthy to see that total receivables and revenue are increasing
As long as either revenue or receivables is increasing, everything is ok
The increase in unbilled receivables is cause for concern, especially during a period where sales increase.
The accounts suggest an overly aggressive approach to revenue recognition
The increase in unbilled receivables is cause for concern, especially during a period where sales increase.
The accounts suggest an overly aggressive approach to revenue recognition
Same Store Sales is an example of a financial metric which falls outside GAAP. Which two of the following are true?
It can be useful but should be considered with caution and in conjunction with other metrics
It is the best means of assessing performance of retail and restaurant businesses
Changes to the definition of SSS are normal and reflect changes in the business environment.
Changes in the definition of SSS are a cause for concern and require further investigation
It can be useful but should be considered with caution and in conjunction with other metrics
Changes in the definition of SSS are a cause for concern and require further investigation
Which two of the following are true?
❑ Cost accounting feeds into financial reports
❑ Is a formality and has very little impact on
practice
❑ Is only required in large organizations who can
afford an accountant
❑ Helps inform management decision making
❑ Cost accounting feeds into financial reports
❑ Helps inform management decision making
Direct costs are:
❑ Labour cost and material cost explicitly associated
with a particular cost object
❑ Labour cost, material cost and overheads
associated with a particular cost object
❑ Direct insurance and equipment such as PPE which
are integral to safe and efficient manufacturing
❑ Labour cost and material cost explicitly associated
with a particular cost object
Manufacturing overheads are:
❑ All production costs
❑ All production costs (except indirect costs such as
insurance and depreciation)
❑ All production costs (except direct materials and
direct labour)
❑ All production costs (except indirect labour and
indirect mateirals)
❑ All production costs (except direct materials and
direct labour)
Indirect costs include: (Please choose three of the following) ❑ Personal Protective equipment ❑ Specially skilled manufacturing operators ❑ Raw materials (pre-processing) ❑ Electricity ❑ Recruitment costs
❑ Personal Protective equipment
❑ Electricity
❑ Recruitment costs
Semi-fixed costs:
❑ Are changeable depending upon the customer or
the business strategy
❑ Reflect seasonal variation in the cost of raw
materials
❑ Reflects stepped increases in cost as volume
increases
❑ Have a variable element and a fixed element
❑ Reflects stepped increases in cost for as volume
increases
Semi-variable costs:
❑ Have a fixed element (for example, planned
maintenance) and a variable element (for example,
unplanned maintenance)
❑ Are changeable depending upon the customer or
the business strategy
❑ Reflect seasonal variation in the cost of raw
materials
❑ Reflects stepped increases in cost as volume
increases
❑ Have a fixed element (for example, planned
maintenance) and a variable element (for example,
unplanned maintenance)
With regards to sunk costs:
❑ It is critical to consider costs already invested when
making decisions about the best course of action.
❑ It is critical that sunk costs are ignored when making
decisions about the best course of action
❑ It is critical that sunk costs are ignored when making
decisions about the best course of action
Opportunity costs :
(Please select two of the following)
❑ Compare the value of an investment with the value
of the next best alternative
❑ Compare the value of an investment with the value
of all other alternatives
❑ Are an objective way to consider costs
❑ Don’t allow for trade-off’s
❑ Are associated with the concept of scarcity
❑ Compare the value of an investment with the value
of the next best alternative
❑ Are associated with the concept of scarcity
Overhead allocation
❑ The one stage method allocated overheads and
direct costs to cost centres
❑ The two stage method allocates overheads to cost centres then cost objects and direct costs to cost objects
❑ Allocation basis are only required for a two step
process
❑ The two stage method allocates overheads to cost centres then cost objects and direct costs to cost objects
Blanket overheads
❑ Are overheads that are applied to duvet production
❑ Are suitable when processes don’t vary and
overheads can be allocated on a consistent basis
❑ Are a convenient way to allocate overheads for
complex processes (for example, bespoke
products)
❑ Are suitable when processes don’t vary and
overheads can be allocated on a consistent basis
Which one of the following is true:
❑ Variable costing often results in under/over
absorption of costs
❑ Absorption costing can result in under/ over
absorption of costs
❑ Variable costing combines variable and fixed costs
and allocates to work in progress cost objects
❑ Absorption costing separates variable and fixed
costs, only fixed costs are attributed to work in
progress cost objects
❑ Absorption costing can result in under/ over
absorption of costs
