(20 marks) Question 7 Please complete all of the following. Where more than one answer is accurate, please choose the answer which is most true [1 mark per question] Which of the following is not a way that budgets can assist management in business decision making? 1) Identifying periods of potential cash shortage or excess . b. Planning labour and other inputs Project Management C. d. Assessing the feasibility of long term plans Which business structure would show income tax as an expense in their financial 2) statements? Partnership . b. Sole Trader Company . d. Trust Which of the following items would you exclude to reconcile Profit (or Loss) to Operating 3) Cash Flows Depreciation & Loss on Disposal of Fixed Assets . b. Payments to Suppliers & Dividends paid Impairment of Plant and Equipment & Payments to employees C. d. Depreciation & Wages 4) Management Accounting is the process of: Reporting to Managers on past Financial Performance according to AASB Standards . Providing financial information for internal users for future decision making, including budget b. setting and variance reporting Estimating future financial performance and cash flow C. d. Estimating Cost-Volume-Profit for investment decision making 5) Which of the following lists is least likely to be a business' cost objects? Product, facility, customer, region . b. Council, education, governance, Long Service Leave Country, service, facility, customer C. Business unit, product, state, business process d. Page 21 of 23 6) Which of the following is an advantage of a partnership structure? Limited Liability . b. Relatively simple to set up Tax advantages . d. All of the above A payment to a supplier incorrectly appears on a reconciliation as $59,000 instead of $95,000. This is an example of a 7) Transposition error . Single Entry error b. Double Debit error . d. Intangible error The essential characteristics of a Liability are: 8) A future obligation, arising from a past event, where there is the expectation of an outflow of economic benefits from the entity to settle the obligation . A clear and present obligation, arising from a future event, where there is the expectation of an outflow of economic benefits to settle the obligation b. A probable and reliable obligation, where there is the expectation of an outflow of economic benefits from the entity to settle the obligation . A present obligation, arising from a past event, where there is the expectation of an outflow of economic benefits from the entity to settle the obligation. d. Under accrual accounting, 9) Revenue is equal to total income . Revenue is equal to total receipts b. Revenue is equal to cash sales plus and credit sales . d. Revenue is equal to total debtors 10) Which of the following is not an accounting policy choice? Depreciation method . Residual Value of depreciated assets b. Method of inventory costing . d. Capitalisation of development expenditure 11) What are the three major sections of a Statement of Cash Flows Operating, Investing and Financing . b. Operating, Adjusting and Investing Operating, Financing and Capitalising . d. Operating, Reconciling and Depreciation 12) If NPV is calculated using a discount rate of 20%, which of the following is true The payback period will be five years . b. Cash flows from the second year are discounted (multiplied) by 0.833 Cash flows in the first year will be 20% higher than in the second year C. d. Cash flows from the first year are discounted (multiplied) by 0.833 The 'acid test' or 'quick' ratio is defined as 13) (Current assets - accounts payable) / Current liabilities . b. Only relevant for businesses with strong cash flows Current assets / Current liabilities . (Current assets - inventory) / Current liabilities d. 14) Which of the following might be considered Business Sustainability Principles? Ethics, Environmental Protection and Economic Development . Financial Return, Governance and Transparency b. Business relationships, Employment Practices and Valued products/services . d. All of the above 17) What is the most efficient way of making a decision regarding a capital investment? NPV, as it takes into account the time value of money . b. ARR, as it does not take into account the time value of money Payback period, as it is has the least risk . d. IRR, as it is the easiest to calculate ABC Ltd has the following data in their financial reports. What is the % change from 2017 18) to 2018 for sales? 2017 2018 $673,000 $598,000 Sales Net Profit $75,000 $81,000 11% increase . b. 11% decrease 12.5% increase . d. 12.5% decrease 19) In the data for ABC Ltd in Q 18 above, which year was the most profitable? 2018, as it had the highest net profit . b. 2018, as it had the highest sales 2018, as it had a profit margin of 12% . 2017, as it had a profit margin of 12.5% d. Which of the following is not included under Financing Activities in a Cashflow 20) Statement? Proceeds from share issue . b. Dividends received Repayment of borrowings . Distributions paid d