Book Title:
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Some examples from this set of practice questions
1.
With regards to accounting information, what does ‘faithful representation’ mean?
Answer: The accounting information is complete, without bias and free from error
2.
Name 4 users of accounting information, as stated in Accounting and Finance for Non-Specialists
Answer: Any 4 of: owners, customers, competitors, employees (and employee representatives), government, community representatives, investment analysts, suppliers, lenders, managers.
3.
Does management accounting follow any regulations?
Answer: No. Management accounting information is produced for internal use by managers so do not need to be regulated
4.
What is the considered the main objective of a business?
Answer: Improve shareholders wealth
5.
True or False: the lower the risk, the higher the return shareholders require
Answer: False. When risk is higher, shareholders will require a higher return to compensate for the increased risk
6.
What decisions will a supplier make based on a companies financial reports?
Answer: Whether or not to supply and any credit terms
7.
True or False: Financial accounting produces general purpose reports to be used by a variety of users
Answer: True. Financial accounting is general purpose, whereas management accounting creates reports for a specific purpose
8.
Why do not-for-profit organisations require accounting information?
Answer: In order to make informed decisions
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