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Question(s) / Instruction(s):

All the information regarding the financial health of an entity can be found in the balance sheet.

a.            True

b.            False


Question 2

A main source of company regulation in Australia is the Corporations Act.

a.            True

b.            False


Question 3

Which of these is an asset?

Choose one answer.

a.            Income tax payable       

b.            Income received in advance      

c.             Interest earned on investments              

d.            None is an asset              


Question 4

An advantage of a private company becoming a public company is:

Choose one answer.

a.            Increased disclosure      

b.            The opportunity costs of under pricing a share offer       

c.             The potential to reduce the cost of equity           

d.            Separation of ownership and control     




Question 5

The external user of accounting information is:

Choose one answer. 

a.            Director of Research and Development.               

b.            Inventory clerk.               

c.             Purchasing officer.         

d.            Customer.          


Question 6

If the assets owned by a business total $50,000 and the liabilities total $37,000 equity must equal $87,000.

a.            True 

b.            False


Question 7

Which of these is not a part of equity?

Choose one answer. 

a.            Expenses            

b.            Income                

c.             Bank     

d.            General reserve              


Question 8

ABC Restaurant Pty Ltd started the year with total assets of $60,000 and total liabilities of $40,000. During the year the business earned $100,000 in income and incurred $55,000 in expenses. Dividends paid were $10,000.

The profit for ABC for the period was:

Choose one answer.


a.            $20 000.               

b.            $35 000.               

c.             $45 000.               

d.            $90 000.               



Question 9

Company shareholders, whose shares are fully paid, have no personal liability for company debts.

a.            True 

b.            False


Question 10

A partnership has which of these set of characteristics?

Choose one answer. 

a.            Simple to set up but increased government regulation.                

b.            Harder to raise funds and gives the owner full control.  

c.             Shared control, tax advantages for family members, increased skills and resources.        

d.            Easier to transfer ownership and raise funds, and limited liability.            


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