, Testbank
to accompany
Company
Accounting 9e
by
Ken Leo , John Hoggett & John Sweeting
Prepared by
Emma Holmes
,John Wiley & Sons Australia, Ltd 2012
1
, Chapter 1: Nature and regulation of companies
Chapter 1: Nature and regulation of companies
True/False Questions (20 in total)
1. Members of a company are allowed to sell their shares at any time, provided they
obtain permission from the other members.
The statement is false. Provided a proper instrument of transfer has been delivered to the
company, members do not have to obtain permission from the other members
Feedback: Section 1.1 The nature of a company
2. Small proprietary companies must prepare audited accounts if requested by ASIC.
The statement is true. ASIC can require small proprietary companies to prepare audited
financial statements under s. 294 of the Corporations Act.
Feedback: Section 1.2 Different types of companies
3. When determining whether a proprietary company is classified as small or large, the
gross assets test is determined based on the average of opening and closing gross assets.
The statement is false. The assets test is based on closing gross assets at the reporting date.
Feedback: Section 1.2 Different types of companies
4. Disclosing entities must prepare annual and half-yearly financial statements, have them
audited and lodge them with ASIC.
The statement is true. This is required under s 302 of the Corporations Act.
Feedback: Section 1.2 Different types of companies
5. Costs incurred in promoting and setting up a company are considered to be capital in
nature and cannot be paid from the company’s assets.
The statement is false. Section 122 of the Corporations Act allows such costs to be paid from
the company’s assets.
Feedback: Section 1.3 Forming a company
6. All company registers must be kept at the registered office of the company.
The statement is false. The Corporations Act allows company registers to be maintained at
the registered office, the principal place of business or at another location approved by ASIC.
Feedback: Section 1.4 Administering a company
1.2 © John Wiley & Sons Australia, Ltd 2012
to accompany
Company
Accounting 9e
by
Ken Leo , John Hoggett & John Sweeting
Prepared by
Emma Holmes
,John Wiley & Sons Australia, Ltd 2012
1
, Chapter 1: Nature and regulation of companies
Chapter 1: Nature and regulation of companies
True/False Questions (20 in total)
1. Members of a company are allowed to sell their shares at any time, provided they
obtain permission from the other members.
The statement is false. Provided a proper instrument of transfer has been delivered to the
company, members do not have to obtain permission from the other members
Feedback: Section 1.1 The nature of a company
2. Small proprietary companies must prepare audited accounts if requested by ASIC.
The statement is true. ASIC can require small proprietary companies to prepare audited
financial statements under s. 294 of the Corporations Act.
Feedback: Section 1.2 Different types of companies
3. When determining whether a proprietary company is classified as small or large, the
gross assets test is determined based on the average of opening and closing gross assets.
The statement is false. The assets test is based on closing gross assets at the reporting date.
Feedback: Section 1.2 Different types of companies
4. Disclosing entities must prepare annual and half-yearly financial statements, have them
audited and lodge them with ASIC.
The statement is true. This is required under s 302 of the Corporations Act.
Feedback: Section 1.2 Different types of companies
5. Costs incurred in promoting and setting up a company are considered to be capital in
nature and cannot be paid from the company’s assets.
The statement is false. Section 122 of the Corporations Act allows such costs to be paid from
the company’s assets.
Feedback: Section 1.3 Forming a company
6. All company registers must be kept at the registered office of the company.
The statement is false. The Corporations Act allows company registers to be maintained at
the registered office, the principal place of business or at another location approved by ASIC.
Feedback: Section 1.4 Administering a company
1.2 © John Wiley & Sons Australia, Ltd 2012
