Public and Private Sector Quiz

The public sector is normally concerned with:

• making profit from the sale of goods

• providing services to specific groups funded from charitable donations

• the provision of basic government services

• raising funds by subscriptions from members to provide common services

Private sector business organisations do not include:

• Private limited companies

• Partnerships

• Public corporations

• Public limited companies

Which of the following is generally the primary aim of profit seeking organisations?

• Maximising the efficiency of the organisation's operations

• Maximising return on capital employed each year

• Maximising customer satisfaction

• Maximising the wealth of the organisation's owners

A company faces seasonal demand for its products. Short-term borrowing will be required to help the company:

• Pay the annual dividend

• Finance its existing loans

• 
  

   Increase its stock levels

• 
  Purchase new machinery

Company G is considering raising finance to invest in new premises. It believes that it should raise debt finance by way of a bank loan. Which of the following statements is correct regarding debt and equity finance?

• Interest payments tend to be cheaper than dividends.

• Interest payments can be suspended in the future if G is unable to afford them.

• Dividends are an allowable deduction against G's profits.

• G will likely need to provide asset security to investors whether it chooses to raise debt or equity finance.

Albus is an accountant. He has recently been asked to calculate the profits for the company he works for. This information is to be used to calculate employee bonuses for the year – including the bonus that Albus himself will receive. Which ethical threat is Albus being exposed to?

• Advocacy

• Self-review

• Self-interest

• Familiarity

Consider the following statements: i. In the event of an ethical dilemma arising, an accountant should first contact their professional body. ii. If a professional accountant has found unethical or illegal conduct and cannot get a satisfactory resolution, they should consider resigning from the appointment. Which of these statements is/are correct?

• (i) only

• (ii) only

• Both

• Neither

What are the consequences if a laundering suspicion is not reported?

• Fine limited to £1m

• Unlimited fine

• 5 year prison sentence

• 10 year prison sentence

In certain circumstances, auditors have a legal duty to disclose confidential client information to third parties. Which THREE of the following describe such circumstances? (Select correct or incorrect for each option).

• When the client is involved in terrorist activities

• When the auditor is corresponding with tax authorities

• When the client has breached regulations of the Financial Conduct Authority

• When there is a suspicion of money laundering

Which of the following are the sequence of the stages of the money laundering process?

• placement, integration, layering

• integration, placement, layering

• placement, layering, integration