Multiple Choice Questions
1. Which is the main body responsible for overseeing the regulation of companies in Australia?
A. The Institute of Chartered Accountants in Australia
B. The Australian Securities and Investments Commission
C. The International Accounting Standards Board
D. The Australian Stock Exchange
2. If assets and liabilities at the start of the period equal, respectively, $120 000, $65 000, income for the period equals $20 000 and expenses equal $11 000 what is equity at the end of the period? Assume these are the only changes in equity for the period.
A. $55 000
B. $46 000
C. $64 000
D. $9000
3. If sales are $950 000, the cost of sales is $600 000 and average inventory is $60 000 the average time taken to sell inventory in days is:
A. 23 days
B. 10 days
C. 15.8 days
D. 36.5 days
4. Green Pty Ltd usually takes 70 days to pay its suppliers. In order to encourage prompt payment supplier Blue Pty Ltd offers Purple Co a 2% discount for payment within 10 days. What is the annual percentage cost of the discount to Green Pty Ltd?
A. 2%
B. 12.2%
C. 98%
D. 14%
5. Axil Carpets reports the following data from the year's master budget:

Axil's capacity is 100 000 metres per year and the normal selling price is $25 per metre. A one-time-only order for 1000 metres has been received at a special price of $21 per metre. The order would not disturb regular business. If the order is accepted overall net profit will increase by:
A. $1000
B. $2000
C. $8000
D. $4000
6. Per share
Book value on 3 June 2013 .................................. $22
Quoted market value on 30th June 2013 ................... $43
Earnings per share for the current year ..................... $4.1
Dividend per share for the current year ................... $3.0
The price-earnings ratio of the shares at 30 June 2013 is:
A. 10.5 to 1
B. 5.4 to 1
C. 14.3 to 1
D. none of the above
7. Y Company is evaluating an investment proposal using the payback method. Cash inflows are expected to be $9000 in year 1, $8000 in year 2, $6000 in year 3, and $4000 in year 4. The initial investment required is $20 000. Assuming even cash inflows within each year what is the payback period?
A. 2.8 years
B. 2.5 years
C. 3 years
D. 4 years
8. Based on an expected production level of 30,000 units Jono Ltd's cost estimates are:
Direct labour ............................. $25 per unit,
Direct materials ........................ $10 per unit
Variable overhead ..................... $11 per unit,
Fixed overheads ........................ $200 000
Calculate the expected total production costs for Jono Ltd if production estimates are revised upward to 32 000 units.
A. $1 472 000
B. $1 768 000
C. $1 672 000
D. $1 685 333
9. Information for Yellow Pty Ltd's cash budget is:

Credit sales are collected 25% in the month of sale and the balance in the following month. What will be collected in cash from credit sales in March?
A. $137 500
B. $130 000
C. $140 000
D. $105 000
10. WEN Properties collects rents from three properties. For the year ended 30 June 2013 $26 000 rent has been collected in cash from the properties. On investigation it is found that on one property the tenant is behind in payments and owes $1300 for rent up to 30 June 2013 while on a second property rent of $800 has been paid in advance for the first two weeks of July 2013. What is the amount that will be shown for rent received in the income statement of WEN Properties?
A. $26 000
B. $25 500
C. $27 300
D. $26 500

Transcribed Image Text:

Per metre $13 S5 Total Variable manufacturing cost Fixed selling and administrative costs 500 000 Jan Feb S140 000 March $130 000 April $150 000 Estimated credit sales $120 000