economic business Essay

Submitted By cjhendry1991
Words: 1153
Pages: 5

University of Aberdeen

Session 2010-2011

Examination for the Degree of MA
AC1009: Accounting and Accountability
Wednesday 26 January 2011, 15.00 – 17.00, Games Hall, Butchart Centre
Answer all questions from SECTION A, and two from the SECTION B.

(Answer all questions from this section)

Question 1 (20 sub questions 2 marks each, total 40 marks)
Select the correct answer (only one choice is correct)
1.1 The main purpose of a _______________ is to generate surpluses and use the wealth for social and community objectives.
a. partnership
b. sole proprietorship
c. not-for-profit organisation
d. private limited liability company
1.2 According to the Companies Act 2006, the _____________ are required to prepare a
_____________ report.
a. shareholders, business prospect
b. auditors, business review
c. stakeholders, business prospect
d. directors, business review
1.3 In a partnership, the partners make decisions collectively and are accountable to one another.
This is a form of ________________ accountability.
a. hierarchical
b. market
c. legal
d. participatory
1.4 The directors are responsible for filing the company’s accounts and reports with the
International Accounting Standards Board (IASB).
a. True
b. False

1.5 ___________________ is a network-based organisation which develops the framework for voluntary sustainability reporting.
a. Global Reporting Initiative
b. Global Sustainability Reporting
c. Global Environmental Reporting
d. Global Voluntary Reporting
Questions continued over…
Page 1 of 5

1.6 Which of these are the qualitative characteristics of financial information?
I. Comparability
II. Consistency
III. Accountability
IV. Understandability

I and II
I and III
I, II and IV all of the above

1.7 Functionalists believe that the accounting profession is here to make money.
a. True
b. False
1.8 The financial accounting information system involves two important sub-systems. They are:I. Transaction Processing Systems
II. Inventory management systems
III. Decision Support Systems
IV. Accounting training Systems

I and III
II and III
I and IV
II and IV

1.9 What does APB stand for?
a. Audit Practices Board
b. Auditing Practices Board
c. Accounting Practices Board
d. Accounting Practical Board
1.10 The Transaction Processing Systems (TPS) involves which three key activities?
I. Capturing transactions
II. Recording transactions
III. Classifying transactions
IV. Interpreting transactions

I, II and IV
II, III and IV
I, II and III
I, III and IV


Which statement is correct regarding an accountability relationship.
Power wielder is the one who exercises the delegated power.
Accountability holder is the one who exercises the delegated power.
For an effective accountability relationship, power wielder should be able to keep the accountability holder accountable.
d. Normally, accountability holder is obliged to provide accounts to the power wielder.
Questions continued over…
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An accountability mechanism is
Always a legal arrangement within which one party is held accountable to the other
Necessarily an informal arrangement within which one party is held accountable to the other
Any sort of social arrangement within which one party is held accountable to the other. d.
Necessarily a hierarchical arrangement within organisations to hold subordinates accountable to the superiors.


The primary job of the external auditor is to
assess whether the board of directors have performed their legal duties and responsibilities b. assess whether the accountants are appropriately qualified to perform accounting activities in the company
assess whether the financial statement are prepared in accordance with accounting standards and company law.
assess whether the company has earned sufficient profit…