MBA Lec 3

Which of the following statements about the statement of financial position is not true:

• Assets are listed in order of liquidity

• It is reported at a particular point in time

• The total of the assets must equal the total of the liabilities plus equity

• It represents the cash received and paid during the period

If total assets equal $295 000, total liabilities are $165 000 and total equity equals $130 000, then net assets equals

• $295 000

• $130 000

• $165 000

• $30 000

An accountant is required to make choices in measuring the value of

• property, plant and equipment

• inventory

• development expenditure

• all of the above

Pizza Ltd leases coded welding equipment from Hotdog Ltd. The lease is non-cancellable, and Pizza Ltd has the right to purchase the equipment at the end of the lease term for $85 000. Which of the following statements is true?

• Pizza Ltd has legal ownership of the equipment

• Pizza Ltd does not have control over the equipment

• Pizza Ltd is the lessor of the equipment

• While Pizza Ltd controls the equipment, it does not have legal ownership of the equipment

Which of these is not a current liability?

• Dividend payable

• Account payable

• General reserve

• Accrued expense

C. Mickelborough purchases 1500 shares of McPherson Ltd that were listed on the stock exchange. As a result of this transaction, what will be the effect on the total equity of McPherson Ltd?

• Total equity will remain unchanged

• Total equity will increase

• Total equity will decrease

• Total equity will be greater than total assets

The statement of financial position usually reports the entity’s financial position for both the current period and the previous period. This information is known as

• comparative information

• comprehensive information

• financial reporting

• narrative information

1.              In the statement of financial position, how is inventory categorised?

• Current liability

• Non-current asset

• Non-current liability

• Current asset

Which of the following assets is not an identifiable intangible asset?

• Brand name

• Trademark

• Goodwill

• Development expenditure

How are current and non-current liabilities categorised?

• Based on whether the liability is secured or unsecured

• Based on the size of the liability

• Based on to whom the liability is owed

• Based on when the liability is due for payment