Chapter1 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) One advantage of the company form of organisation is that A) it allows specialist managers to administer the day- to- day operations of the company B) it is subject to very few financial reporting regulations shareholders have unlimited liability D) company directors have limited liability 2) Companies in Australia are legally incorporated under which statute? A) Corporations Act C) Income Tax Assessment Act B) Sarbanes Oxley Act D) none of the above 3) The practice of people acting in their own self-interest is referred to as: A) economic rationality C) economic interest B) ethicalrationality D) none of the above 4) Which of the following is NOT one of the major accounting professional bodies in Australia? A) AICPA B) IPA C) ICAA D) CPA Australia 5) Which of the following statements is correct? A) companies can hold shares in other companies B) the major shareholders in companies are company directons ) companies cannot hold shares in other companies D) the major shareholders in companies are individual investors 6) 7 The concept of limited liability limits: A) the liability of investors to the extent of their investment B) the liability of directors to the extent of their investment Q the liability of director to the extent of their contribution to the company's lossers D) the liability of investors to the extent of their contribution to the company's losses 8) 10) Any party with an interest in, or affected by the actions of, an organisation is referred to as a: B) stakeholder C) shareholder D) debtholder 11) The organisation in Australia that is responsible for developing, issuing and maintaining accounting standards and pronouncements in Australia is the: A) AARF B) AASB FRC D) FASB 12) With the separation of ownership from control arises the potential of a conflict of interest between A) managers and auditors C) owners and shareholders B) owners and managers D) creditors and managers 13) The main benefits to accrue from the adoption of international accounting standards include A) increasing comparability of financial reports B) removing barriers to international capital flows ) improving the quality of financial reporting in Australia to best international practice D) all of the above 14) Which of the following is NOT a common perspective on companies