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6. I'm afraid, I'm half as more competent in tax legislation as our chief accountant D
is.
A B
7. For a better managerial control it is necessary to forecast the effects of a C D
decision before taking it, otherwise it will be much more efficient.
A B C D 8. The more the amount of dividends paid to shareholders the fewer the company's
net income.
A B C
9. When a company owns half as much 50% of its shares, it is considered to be a D
Parent Company.
A B C
10.Depreciating fixed assets in Russia is different in the allocation of the cost of D
an asset over its useful life from other countries used international accounting standards.
A
11.Unlike to Russian accounting standards international accounting standards B C D
suggest depreciating fixed assets over the period of their useful life.
A B C D 12.If you are in doubt as to how to value an asset the low of the values is to be
chosen.
A B
13.If a fixed asset is sold and the selling price is high than the asset's book value, a C D
gain is recorded in the accounts and reported in the income statement. A B C
14.The chief accountant told us to verify all the figures in this financial statement D
as sooner as possible.
A B C
15.Drawing up a monthly balance sheet took me ten times as many efforts as
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D
calculating our monthly losses this week.
A B
16.When filing reports to the tax inspection, the graduates of economic C D
universities in Russia face less problems as compared with the graduates of various accounting courses.
A B C D 17.The potential of this company is much easy to predict, so there is less risk
associated with it.
A B C 18.The main deficiency of this company performance is that its profits are half as
D many at present as they used to be.
A B C
19.Profitability is now four times as higher in large companies as compared with D
small ones.
A B
20.In contrast to the past sales, the performance of our products in Russia has been C D
half as much as it has been on Latin-American market.
Score 1 for each mistake spotted
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Test 6
The Types of Accounting
Part A
Choose a correct variant
1.As a rule, a distinction ... between the concepts of management and financial accounting.
a)is usually done
b)is usually described
c)is usually made
2.Financial accounting reports ... a general overview of the financial position of a business.
a)provide
b)indicate to
c)produce
3.Less detailed accounting information is needed for ...
a)managers.
b)internal control.
c)outside users.
4.As is known, financial accounting reports are produced...
a)monthly.
b)annually or biannually.
c)quarterly.
5.Financial reporting provides information that is useful in each of the following situations except...
a)making investment and credit decisions.
b)making employment decisions.
c)assessing business resources claims to those resources and changes in them.
6.Financial accounting reports are essentially ...
a)concerned with the future.
b)backward-booking.
c)frequent and very detailed.
7.Financial accounting reports are used ...
a)to make forecasts.
b)to evaluate the financial position of the business and to make comparisons with other businesses.
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c)to monitor the performance of a business.
8.Generally accepted accounting principles (GAAP) is ... necessary to define accounting practice at a particular time.
a)a set of rules, conventions and practices
b)an accounting body
c)a set of accepted standards
9.Internal reports and analyses prepared by the management accountant are used by ...
a)outside users.
b)every member of the management team.
c)top-level managers.
10.In the management accounting emphasis is placed on supplying relevant information to ...
a)managers who are responsible for particular activities.
b)external auditors.
c)bankers and investors.
11. ... accounting reports may be prepared monthly, quarterly and annually on a regular basis or they may be requested daily on an irregular basis.
a)Financial
b)Management
c)Common
12.When collectively applied to a company's financial and production data, management accounting procedures will... management's' informational needs.
a)satisfy
b)use
c)reflect
13.Most top-level business executives in the USA have a background in ... more often than in any other field.
a)accounting and finance
b)financial management
c)auditing
14.The major task of a manager is ...
a)to analyse accounting information.
b)to set plans for the business and to ensure the achievement of these plans.
c)to provide reliable information to outside users.
15.Management accountants often ... on management decision-making.
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a)affect
b)have an important effect
c)influence
16.Management accounting ... with the provision of accounting information to the management.
a)is concerned
b)is devoted to
c)provides
17.As is known, managers must ... progress of business activity and take corrective actions if necessary.
a)compare
b)monitor
c)finance
18.The volume, frequency and the format of management accounting reports ... by the needs of the management.
a)are dictated
b)depends to some extent on
c)dictate
19.Irrespective of the type of a business, all managers need information about...
a)product costing.
b)product costing, inventory valuation, cost analyses.
c)inventories.
20.Top management... on the management accountant for information to make wellgrounded decisions.
a)depends
b)provides
c)determines
21.Management accountants ... special analysis and reporting techniques to evaluate different alternatives.
a)select
b)use
c)forecast
22.At present large world-wide corporations ... throughout the world and do not restrict their activities to domestic markets any longer.
a)give rise
b)operate
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c)are used
23.The field of management accounting ... specific types of information gathering and reporting and related accounting techniques and procedures.
a)depends on
b)consists of
c)influences on
24.Data for planning and control ... in ways that help management plan production and its related costs.
a)are organized
b)are connected
c)are supposed
25.…is the currency in which the consolidated financial statements are presented.
a)Functional currency
b)Reporting currency
c)Foreign currency
26.Under «temporal» method used in the US historical cost assets are translated at...
costs.
a)current
b)historical
c)future
27.The historical exchange rate (the rate at the time of the transactions) is used for ...
a)monetary assets and liabilities.
b)inventory, plant assets, and contributed capital.
c)only for contributed capital.
28.As a rule, the effects of changes in the exchange rates are reported on the income statement as ... and included in the net income of the company.
a)translation adjustments
b)translation gains or losses
c)translation and measurement
29.Most experts are sure that many problems connected with restating foreign subsidiary financial statements will disappear if companies use some form of...
a)current value accounting.
b)historical value accounting.
c)constant dollar accounting.
30. ... is one of the common measures that has to do with a company's ability to make a profit.
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a)Gross margin
b)Return on assets
c)Good management
31.The return on equity ... by dividing the company's net income by its average owner's equity.
a)is indicated
b)is computed
c)is shown
32. ... are the increases in owner's equity that result from operating the business.
a)Expenses
b)Revenues
c)Net income
33.Just like expenses are recorded when they incur, ... I are generally recorded when they are earned.
a)losses
b)revenues
c)retained returns
34.The investment in the company by an owner increases owner's equity, but it is not
a ...
a)profit.
b)revenue.
c)net income.
35.Revenues from sales consist of gross sales less ... and allowances and sales discounts.
a)sales returned
b)net sales
c)operating losses
36.Merchandising companies, whether wholesale or retail, attempt to earn ... by buying and selling merchandise.
a)an income
b)a revenue
c)yield on capital
37.If a Russian firm does business with a French firm and all their transactions take place in euroes, which firm may incur an exchange gain loss?
a)a Russian firm
b)a French firm
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c)both
38.Our company's ... on shares have increased threefold this year and they are still increasing.
a)revenue
b)yields
c)incomes
39.The use of «temporal» method in currency translation in 1975 in the US ... to American companies.
a)yielded incomes
b)yielded losses
c)increased after tax returns
40.Money received in advance for which the goods will not be delivered or the services performed during the current accounting period is called ...
a)revenue from sales.
b)unearned revenue.
c)yield on capital.
Score 2 for each correct answer. Total 80
Part В
Find a mistake in the following sentences
A B C
1. Because sales discounts reduce revenues from sale they considered in a D
contra account and deducted from gross sales in the income statement. A B
2. Whether the customer will take advantage of the discount by having paid C D
within the discount period is not usually possible to know.
A B C 3. At the end of the accounting period the Sales Discounts Account have
D
accumulated all the sales discounts for the period.
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A B
4. The sales account is used only for recording sales of merchandise, whether C D
the sale are made for cash on for credit. A
5. If an asset has been carried to the debit column of the income statement and B C
if an error involving revenue and liabilities has been made, the net income D
figure should be wrong.
B
6. That at the end of the first and subsequent periods all components of owner's C D
equity are restated are well-known.
A B
7. If the enterprise retains significant risks of ownership, its every transaction C D
are not a sale and revenue is not recognised.
A B
8. Changes that considerably affects the estimates and decisions of users of C D
financial statements should be disclosed in explanatory notes. A B
9. IAS is aimed at providing the transparency of accounting and reflecting the C
real economic situation, which will enable users of financial statements to D
make right decisions.
A B
10.Uniform reporting rules are required in cases where a preparer of the C
financial statements (manager) and their user (shareholder) is different D
individuals, which is typical for large businesses.
A B
11.The fact that the concept of consolidated accounts have been introduced in
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C
the Russian accounting system changes the qualitative characteristics of D
financial statements, enhancing the usefulness of the accounts for potential users. A B
12.Accountants required to use their own judgment without a regulation that C D
provides a basis for the judgment of this sort.
A B C 13.Similarly financial accounting, management accounting involves analyses of
D
various segments of business including cost centres, departments etc. some specific aspect of their operations.
A B 14.Before tackling a particular problem, the management accountant must
C D
decide which information should be useful to the users of the report. A B C
15.Financial accounting comprise the rules governing the procedures of D
accounting and reporting financial information that must disclosed to people outside the company.
A B
16.Although accounting reports prepared for all level of management, from the C
president down to the department manager, the president is responsible for D
running the company in general, and all the costs of the company, in particular. A B C
17.Though every company depend on the aid of many supporting service D
departments are not directly involved in production.
A B C 18.Cash receipts journal is a multicolumn special-purpose journal in which
D
disbursements of cash is recorded.