1 The internal user of accounting information is the:

Select one:

a office manager.

b local council.

c auditor from Australia Tax Office (ATO).

d customer.

2 Which of the following must exist before income can be recognised?

Select one:

a The increase in future economic benefits related to an increase in an asset or a decrease in a liability must have arisen.

b The increase in future economic benefits must be able to be measured reliably.

c Income recognition must occur at the same time as the recognition of increases in assets or reductions in liabilities.

d All options above must exist.

3 State the effect of each of the following business transactions for Peter Rabbit Pty Ltd.

December 8 Took out a loan from Smith Bank $18 000.

Select one:

a increase Cash at bank decrease Loan Payable

b decrease Cash at bank decrease Loan Payable

c increase Cash at bank increase Loan Payable

d decrease Cash at bank increase Loan Payable

4 A sole trader form of business organisation:

Select one:

a must have at least two owners.

b is classified as a separate legal entity.

c consists of one individual who controls and manages the business.

d combines the records of the business with the personal records of the owner.

5 Which one of these accounts is a non-current liability;

Select one:

a Salary Payable

b Prepaid Rent

c Loan Payable (due to be paid less than 12 months)

d Loan Payable (due to be paid more than 12 months)

6 Mining Manufacturing Pty Ltd purchased machinery for its manufacturing process on 1 February 2020.

The machinery cost $650,000.

Mining Manufacturing Pty Ltd estimates that the machinery has a useful life of nine years.

The machinery has a $218,000 residual value.

Using straight-line depreciation, estimate the depreciation expense to be recorded in the statement of profit or loss for the year in which the machine was purchased, assuming Mining Manufacturing reporting period ends on 30 June 2020.

Select one:

a $16,000

b $48,000

c $12,000

d $20,000

7 The steps in the process of accounting take place in the following order:

Select one:

a identifying, decision making, measuring, communicating.

b identifying, communicating, measuring, decision making.

c measuring, identifying, decision making, communicating.

d identifying, measuring, communicating, decision making.

8 State the effect of each of the following business transactions for Alyssa Flower Pty Ltd.

August 5 Purchased office suite of furniture on credit $8 000.

Select one:

a increase office furniture decrease cash at bank

b increase office furniture decrease account payable

c decrease office furniture decrease cash at bank

10 Mike Auto Care Ltd serviced a motor vehicle on 1 June and issued the invoice to the owner when the motor vehicle was picked up the next day, 2 June. The owner sends a cheque to Mike Auto Care Ltd on 4 June which is received and banked by Mike Auto Care Ltd on 6 June.

Mike Auto Care Ltd will recognise income on:

Select one:

a 4 June

b 6 June

c 1 June

d 2 June

d increase office furniture increase accounts payable