Atrills Accounting for Business Students 1st Australian Edition Atrill McLaney – Test Bank

ISBN-10 ‏ : ‎ 1488616574, ISBN-13 ‏ : ‎ 978-1488616570

Chapter 1

Introduction to accounting

Choose the one alternative that best completes the statement or answers the question.

1) Which of the following is the most important function of an accounting system?

1. A) Provide information for decision-making, planning and control
2. B) Keep employees from embezzling funds
3. C) Prepare accounting reports
4. D) Collect and record data

Answer: A

Difficulty: Moderate

Learning Objective: 1.1 Explain the nature and role of accounting.

Topic: Nature and role of accounting

AACSB: 8 Application of knowledge

2) The best description of the primary purpose of providing accounting information is:

1. A) to allow the preparation of a taxation return.
2. B) to assist users in making informed decisions.
3. C) to calculate the bank account balance.
4. D) to enable the financial statements to be prepared.

Answer: B

Difficulty: Basic

Learning Objective: 1.1 Explain the nature and role of accounting.

Topic: Nature and role of accounting

AACSB: 8 Application of knowledge

3) The stages of an accounting system are:

1. A) evaluation, processing, output.
2. B) identification, recording, analysis, reporting.
3. C) setting objectives, planning, analysis.
4. D) none of the above.

Answer: B

Difficulty: Complex

Learning Objective: 1.1 Explain the nature and role of accounting.

Topic: Nature and role of accounting

AACSB: 3 Analytical thinking

4) What are the four key qualities of accounting information?

1. A) Relevance, reliability, comparability and understandability
2. B) Identification, analysis, reliability and timeliness
3. C) Planning, control, comparability and analysis
4. D) Understandability, identification, analysis and relevance

Answer: A

Difficulty: Complex

Learning Objective: 1.1 Explain the nature and role of accounting.

Topic: Nature and role of accounting

AACSB: 8 Application of knowledge

5) The best explanation of relevance is:

1. A) ensuring the benefit of the information is greater than the cost of providing it.
2. B) ensuring that information is expressed as clearly as possible.
3. C) ensuring that information is useful for decision-making.
4. D) ensuring that information is free from bias.

Answer: C

Difficulty: Moderate

Learning Objective: 1.1 Explain the nature and role of accounting.

Topic: Nature and role of accounting

AACSB: 8 Application of knowledge

6) The quality of accounting information that requires items that are basically the same to be treated in the same manner is:

1. A) relevance.
2. B) timeliness.
3. C) understandability.
4. D) comparability.

Answer: D

Difficulty: Moderate

Learning Objective: 1.1 Explain the nature and role of accounting.

Topic: Nature and role of accounting

AACSB: 8 Application of knowledge

7) When accounting information has the potential to change decision-making it is said to be:

1. A) consistent.
2. B) understandable.
3. C) material.
4. D) comparable.

Answer: C

Difficulty: Moderate

Learning Objective: 1.1 Explain the nature and role of accounting.

Topic: Nature and role of accounting

AACSB: 3 Analytical thinking