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QUESTION NO: 1
Which accounting theory is best described by the statement 'An approach to accounting is one where a theory is thought of as a body of knowledge that explains and attempts to predict actual accounting practice'?
A. positive accounting theory
B. historical cost accounting theory
C. general accounting theory
D. normative accounting theory
Answer: A
QUESTION NO: 2
You assumed the role as the Chairperson of the Board of Directors of Daylight Ltd. As you start to write your first directors' report, which one of the following areas are you not required to include in your report?
A. Details of any dividends paid or proposed.
B. Details regarding accounting policies pursued by Daylight in preparation of its financial statements.
C. Details regarding any significant changes to Daylight's state of affairs for the year that just ended.
D. Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight.
Answer: B
QUESTION NO: 3
The International Accounting Standards Board's Conceptual Framework for Financial Reporting for the preparation and presentation of financial statements is concerned with the information needs of most users, but not for each possible user.
Which one of the following stakeholders would not be one of the users that the Conceptual
Framework is concerned about?
A. governments and regulatory bodies
B. members of the public who have small investment holdings in the company
C. a company's executive management
D. potential investors in the company
Answer: C
QUESTION NO: 4
Which one of the following bodies makes accounting standards in Australia?
A. AASB
B. FRC
C. IASB
D. ASIC
Answer: A
QUESTION NO: 5
Which one of the following is not an advantage of accounting regulation?
A. It instils public confidence in the accounting system employed in commerce and industry.
B. It provides quality of information in and across financial statements.
C. It provides the required accounting information to all necessary shareholders.
D. It provides flexibility in the way accounting information is presented to users.
Answer: D
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Updated: May 28, 2022