1Lazy Company is currently in its third year of operation and has yet to issue financial statements. Which accounting concept or principle has been violated by the company? Group of answer choices

accounting entity concept

accounting period concept

cost principle

going concern principle

2

Williams Washing Machines Pty Ltd purchased second-hand equipment for its operation for $25,000. The equipment was worth $35,000. Applying the cost principle, how much should the equipment be recorded at in Williams Washing Machines statement of financial position?

Group of answer choices

The company could choose either $25,000 or $35,000.

$35,000.

$30,000 (which is the average of the two prices).

$25,000.

3 A conceptual framework for financial reporting will not include discussion on:

Group of answer choices

the objective of financial reporting.

the elements of financial reports.

the qualitative characteristics of financial reports.

how to prepare financial ratio analysis.

4

Who are not the primary users of financial reports according to the Conceptual Framework?

Group of answer choices

other creditors.

equity investors.

government.

lenders.

5

Which of the following is not an indicator of a reporting entity under SAC 1?

Group of answer choices

The entity is politically or economically important.

The entity is considered large in terms of sales, assets, borrowings, employees and customers.

The entity receives government grants.

The entity is managed by individuals who are not owners of the entity.

6

The following are qualities of faithful representation in the Conceptual Framework except:

Group of answer choices

prudence.

free from material error.

neutrality.

completeness.

7

Which of the following is a constraint on financial reporting?

Group of answer choices

timeliness.

allocation of scarce resources.

financial reports are not the only source of information.

cost.

8)

On 1 April 2016, Waratah Ltd paid for a yearly insurance for $24,000. How much of insurance expense should be recognised in the income statement on 31 December 2016?

Group of answer choices

$ 18,000.

$10,000.

$ 16,000.

$12,000.

9)

In AASB 118, revenue is recognised on the sale of goods when the following conditions are satisfied, except:

Group of answer choices

the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.

the entity has transferred to the buyer the significant risks and rewards of ownership of the goods.

the amount of revenue can be measured with certainty.

it is probable that the economic benefits of the revenue will flow to the entity.

10)

Which of the following best describes the relationships among the various aspects of GAAP?

Group of answer choices

They operate in isolation.

They are interrelated and need to be applied in a particular order.

They are interrelated with no particular order of application.

There is no relation at all.