An entity's equity is one-third of its total liabilities. Its assets total $200,000. What is the amount of its owners' equity? (Type your answer without the $ or comma eg: 70000) Answer: The primary purpose of accounting is to Select one: O a. provide employment to persons who have a talent for dealing with numbers. O b. provide information that management can use to convince shareholders that management deserve high salaries. O c. help people make decisions about economic activities. Od minimise the amount of profit that an organisation has earned. Proceeds from the sale of motor vehicles will be included in the statement of cash flows as: Select one O a. A financing activity O b. An investing activity Oc. An operating activity Od. A cash activity According to the Conceptual Framework which of the following is the correct definition of income? Select one: a. Increases in assets or decreases of liabilities that result in decreases in equity. b. Increases in assets or increases of liabilities that result in increases in equity. Identify which of the following are at least three of the accounting functions for businesses Select one: a. Planning, buying and selling O b. Planning, controlling and decision support c. Saving, controlling and decision support. O d. Planning, communicating and decision support. The section of the statement of cash flows that is generally considered to be the best measure of company's ability to continue the business in the medium to longer term is Select one O a. Cash flow from investing activities O b.Cash flow from financing activities O c. Cash flow from operating activities d. Each gives an equal estimation The two effects on the accounting equation when a business is established by contributing $20,000 cash is Select one a. Increase asset bank and increase equity b. Increase asset bank and decrease equity c Increase equity and decrease asset bank d. None of these are correct. The two effects on the accounting equation when a business is established by contributing $20.000 cash is Select one a. Increase asset bank and increase equity O b. Increase asset bank and decrease equity Oc Increase equity and decrease asset bank O d. None of these are correct. Another name for the balance sheet is the Select one: O a. Statement of financial operation. O b. Statement of financial position. Oc Statement of financial performance. O d. Statement of financial performance and position. An entity wishes to increases its return on asset (ROA). Which of the following courses of action will help achieve a short term increase in ROA? Select one: a. Increases sales b. Issue ordinary share c. Buy more assets O d. None of the above Which of the following actions would NOT affect the quick / liquid ratio of a firm? Select one: O a. Purchase inventory on credit O b. Sell fixed assets for cash O c.Sell inventory on credit Od. Collect outstanding accounts receivable Greenfield's Company has a 8% return on average assets of $400,000 and a net profit ratio of 5%. Greenfield's sales are closest to? Select one: O a. $750,000 O b.$450,000 O c. $640,000 O d. $520,000 Alpha increased its gearing from last year, if the average rate of interest paid on its liabilities is 4.3% (slightly less than profit generated per dollar of asset), then what effect did this have on its return on equity (ROE) for the year? Select one: a. An improvement in the ROE Ob. A worsening of the ROE Oc. Neither a favourable or unfavourable effect Od Cannot be determined
