MBA - Lec 1

The term ‘general purpose financial statements’ refers to the fact that the information conveyed is

• generally reliable

• useful for general purposes but not for making specific decisions

• potentially valuable for a number of users

• comparable over several accounting periods

Which of the following is not a business transaction?

• Purchasing inventory

• Incurring interest on a business loan

• A business owner purchasing a new home

• Receiving cash payment for services provided

Accounting is the process of identifying, communicating and _______________ economic information for the purposes of decision making

Which of these entities is least likely to have users dependent on general purpose financial statements?

• A multinational company

• A company with a large number of shareholders

• A publicly listed company

• A small company whose shareholders also run the business

A business plan explains

• the goals of the firm

• how it will operate the business

• the likely outcomes of the planned business

• all of the above

Which theory describes the relationship between the shareholders and managers of an entity?

• Stakeholder theory

• Agency theory

• Legitimacy theory

• Stewardship theory

_________________ technology supports cryptocurrencies such as Bitcoin

Which of the following is not likely to be a growth area for the accountants of the future?

• Sustainability accounting

• Forensic accounting

• Transaction processing

• E-Commerce

Corporate governance responsibilities for a company ultimately rest with

• individual managers

• the shareholders

• the stock exchange

• the board of directors

Which of the following is not a limitation of accounting information?

• The use of historical data to predict future events

• The time delay from when events take place and their reporting

• Its subjective nature

• Its objective nature