11 Which of the following does not apply to a partnership business?

Select one:

a An ABN must be applied for.

b Pays taxation separately to that of the owners.

c Minimal costs to establish.

d An annual tax return must be prepared.

13 If total assets equal $295,000; total liabilities are $165,000 and total equity equals $130,000 then net assets equals:

Select one:

a $30,000

b $165,000

c $29,500

d $130,000

14 Explain if the following statement true or false for an entity using the accrual method of accounting;

At the end of the reporting period, revenue received for services not yet provided needs to be excluded from the profit or loss determination.

Select one:

a True

b False

15 A company has which of these sets of characteristics?

Select one:

a Separate legal entity and owners have limited liability.

b Owners have shared control and unlimited liability.

c Difficulty raising funds, owners have full control.

d Simple to set up and mutual agency.

16 Which of these is a business transaction?

Select one:

a Buying a new printer for the office use.

b Meeting with the bank manager to extend the bank overdraft.

c Hiring a new contractor to perform work for your business next week.

d Negotiating trading terms with a new supplier.

17 Explain if the following statement true or false for an entity using the accrual method of accounting;

Revenue from sales is included in the statement of profit or loss when it is received, not when it is earned.

Select one:

a True

b False

18 Which one of these accounts is not a current liability;

Select one:

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

b Unearned Revenue

c Accounts Payable

d Accounts Receivable

19 An advantage of operating as a sole trader is:

Select one:

a the owner has unlimited liability.

b the business is not a separate legal entity.

c the business is limited by the skill, time and investment of the owner.

d the owner claims all the profits if the business is sold.

20 The statement of profit or loss:

Select one:

a reports the assets, liabilities and equity at a specific point in time.

b summarises the change in retained earnings over a specific period of time.

c presents the income and expenses of an entity for a specific period of time.

d reports the changes in assets, liabilities and equity over a period of time.