,Chapter 1 – Introduction to Business Accounting and the Role of Professional Skills
COMPLETION
1. Information explosion, evolving forms of businesses, more complex business activities, increased
regulations, globalisation and technological advances are all factors affecting the ______________of
the business environment.
ANS: complexity
PTS: 1 DIF: Difficult TOP: The changing business environment
2. An __________ ___________ is a means by which accounting information about a business’ activity
is identified, measured, recorded and summarised so it can be communicated in an accounting report.
ANS: accounting system
PTS: 1 DIF: Moderate TOP: The accounting system
3. A business financial statement is meant to convey information about the business to ________ and
__________ users in order to help them make decisions about the business.
ANS: internal; external
PTS: 1 DIF: Difficult TOP: Ethics in business and accounting
4. __________ ___________ is a system in which individuals own businesses that produce and sell
services and/or goods for a profit.
ANS: Private enterprise
PTS: 1 DIF: Moderate TOP: Private enterprise
5. _________ ___________ perform services or activities that benefit individuals or business customers.
ANS: Service businesses
PTS: 1 DIF: Easy Top: Service businesses
6. ____________________ businesses purchase goods for resale to their customers.
ANS: Merchandising
PTS: 1 DIF: Easy TOP: Merchandising business
, 7. ____________________ are merchandising businesses that sell their products directly to the final
customer or consumers.
ANS: Retailers
PTS: 1 DIF: Easy TOP: Merchandising business
8. ____________________ are merchandising businesses that sell their goods to retailers or other
commercial users.
ANS: Wholesalers
PTS: 1 DIF: Easy TOP: Merchandising business
9. ____________________ refers to the funds a business needs to operate or expand operations.
ANS: Capital
PTS: 1 DIF: Moderate TOP: Entrepreneurship and sources of capital
10. ____________________ businesses make their products and then sell these products to their
customers.
ANS: Manufacturing
PTS: 1 DIF: Moderate TOP: Manufacturing business
11. ____________________ are businesses owned by two or more individuals.
ANS: Partnerships
PTS: 1 DIF: Easy TOP: Partnership
12. An ____________________ is an individual who is willing to risk the uncertainty of not knowing if
customers will buy what their business provides, in exchange for the reward of a profit, along with the
reward of seeing their business succeed.
ANS: entrepreneur
PTS: 1 DIF: Moderate TOP: Entrepreneurship
13. _________________________ are businesses owned by one person who is the sole investor of capital
into the business.
ANS: Sole proprietorships or sole traders
PTS: 1 DIF: Moderate TOP: Sole proprietorship
, 14. _________________________ are the most common type of business organisation.
ANS: Sole proprietorships or sole traders
PTS: 1 DIF: Easy TOP: Sole proprietorship
15. A ____________________ is a business organisation that has a separate identity from its owners.
ANS: Company/Corporation
PTS: 1 DIF: Moderate TOP: Company/Corporation
16. _________________________ are issued to the owners of a company as evidence of their investment
of capital in the business.
ANS: Company shares
PTS: 1 DIF: Difficult TOP: Company/Corporation
17. _______________ ____________ ____________ __________ are the currently accepted principles,
practices and standards that businesses use for financial accounting and reporting in Australia, New
Zealand and all over the world.
ANS: Generally accepted accounting principles
PTS: 1 DIF: Difficult TOP: Generally accepted accounting principles
18. _______________ is the difference between the cash and credit sales of a business (revenues) and its
total costs (expenses).
ANS: Profit
PTS: 1 DIF: Easy TOP: Basic financial statements
19. An _______________ shows a business’ revenues, expenses and net income (or net loss) for a time
period, usually one year.
ANS: income statement
PTS: 1 DIF: Moderate TOP: Income statement
20. The International Federation of Accountants (IFAC) is an independent, worldwide organisation. It has
developed a ________ ___ ______ for accountants in each country to use as a basis for producing their
own versions.
ANS: code of ethics
COMPLETION
1. Information explosion, evolving forms of businesses, more complex business activities, increased
regulations, globalisation and technological advances are all factors affecting the ______________of
the business environment.
ANS: complexity
PTS: 1 DIF: Difficult TOP: The changing business environment
2. An __________ ___________ is a means by which accounting information about a business’ activity
is identified, measured, recorded and summarised so it can be communicated in an accounting report.
ANS: accounting system
PTS: 1 DIF: Moderate TOP: The accounting system
3. A business financial statement is meant to convey information about the business to ________ and
__________ users in order to help them make decisions about the business.
ANS: internal; external
PTS: 1 DIF: Difficult TOP: Ethics in business and accounting
4. __________ ___________ is a system in which individuals own businesses that produce and sell
services and/or goods for a profit.
ANS: Private enterprise
PTS: 1 DIF: Moderate TOP: Private enterprise
5. _________ ___________ perform services or activities that benefit individuals or business customers.
ANS: Service businesses
PTS: 1 DIF: Easy Top: Service businesses
6. ____________________ businesses purchase goods for resale to their customers.
ANS: Merchandising
PTS: 1 DIF: Easy TOP: Merchandising business
, 7. ____________________ are merchandising businesses that sell their products directly to the final
customer or consumers.
ANS: Retailers
PTS: 1 DIF: Easy TOP: Merchandising business
8. ____________________ are merchandising businesses that sell their goods to retailers or other
commercial users.
ANS: Wholesalers
PTS: 1 DIF: Easy TOP: Merchandising business
9. ____________________ refers to the funds a business needs to operate or expand operations.
ANS: Capital
PTS: 1 DIF: Moderate TOP: Entrepreneurship and sources of capital
10. ____________________ businesses make their products and then sell these products to their
customers.
ANS: Manufacturing
PTS: 1 DIF: Moderate TOP: Manufacturing business
11. ____________________ are businesses owned by two or more individuals.
ANS: Partnerships
PTS: 1 DIF: Easy TOP: Partnership
12. An ____________________ is an individual who is willing to risk the uncertainty of not knowing if
customers will buy what their business provides, in exchange for the reward of a profit, along with the
reward of seeing their business succeed.
ANS: entrepreneur
PTS: 1 DIF: Moderate TOP: Entrepreneurship
13. _________________________ are businesses owned by one person who is the sole investor of capital
into the business.
ANS: Sole proprietorships or sole traders
PTS: 1 DIF: Moderate TOP: Sole proprietorship
, 14. _________________________ are the most common type of business organisation.
ANS: Sole proprietorships or sole traders
PTS: 1 DIF: Easy TOP: Sole proprietorship
15. A ____________________ is a business organisation that has a separate identity from its owners.
ANS: Company/Corporation
PTS: 1 DIF: Moderate TOP: Company/Corporation
16. _________________________ are issued to the owners of a company as evidence of their investment
of capital in the business.
ANS: Company shares
PTS: 1 DIF: Difficult TOP: Company/Corporation
17. _______________ ____________ ____________ __________ are the currently accepted principles,
practices and standards that businesses use for financial accounting and reporting in Australia, New
Zealand and all over the world.
ANS: Generally accepted accounting principles
PTS: 1 DIF: Difficult TOP: Generally accepted accounting principles
18. _______________ is the difference between the cash and credit sales of a business (revenues) and its
total costs (expenses).
ANS: Profit
PTS: 1 DIF: Easy TOP: Basic financial statements
19. An _______________ shows a business’ revenues, expenses and net income (or net loss) for a time
period, usually one year.
ANS: income statement
PTS: 1 DIF: Moderate TOP: Income statement
20. The International Federation of Accountants (IFAC) is an independent, worldwide organisation. It has
developed a ________ ___ ______ for accountants in each country to use as a basis for producing their
own versions.
ANS: code of ethics
