Singapore A-Level H2 Principles of Accounting central themes overview quiz (SEAB 9755) quiz

Assets $=$ Revenue $-$ Expenses

Assets $=$ Liabilities $+$ Equity

Equity $=$ Assets $+$ Liabilities

Liabilities $=$ Assets $+$ Equity

$7{,}333$

$4{,}000$

$6{,}000$

$6{,}667$

Financial accounting deals only with cash received and paid, while management accounting deals only with reported profit

They are identical in purpose and audience, differing only in the names that the two fields happen to use for them

Management accounting must follow the recognised external reporting standards, while financial accounting is free of them

Financial accounting reports performance and position to external users; management accounting informs internal decisions

$2.4:1$

$0.42:1$

$70{,}000$

$1.7:1$

Because the calculation itself is optional once a rough estimate of profitability has been written down

Because the ratio is meaningful only when judged against prior periods, the industry or a benchmark

Because all profitability ratios mean exactly the same thing, so any single one of them can be read alone

Because a higher ratio is always better regardless of context, so no comparison or judgement is needed

It ignores fixed manufacturing overheads entirely and never charges any of them against the profit of the business at all

It treats fixed manufacturing overheads in exactly the same way as marginal costing, as a period cost

It includes a share of fixed manufacturing overhead in the cost of each unit, so some is carried in closing inventory

It charges fixed manufacturing overheads to units only in the periods when the business makes a loss

$80$

$30$

$50$

$20$

It ignores cash flows after the payback point and the time value of money

It is far too complicated to calculate without specialist software and detailed discounting tables

It always discounts every future cash flow, which makes it identical in practice to net present value

It cannot be used to inform any real investment decision and is never applied in actual businesses

Presentation is completely irrelevant as long as the final total figure at the bottom turns out correct

A recognised format and correct classification let users read and compare the statements, and the papers reward it

Only the closing cash figure matters to any user, so the rest of the presentation can be set out freely

Presentation actually changes the underlying transactions themselves, so the chosen format directly alters the reported profit

To calculate the annual depreciation charge on the non-current assets shown in the accounts

To value the closing inventory at the lower of cost and net realisable value at the year end

To agree the cash-book balance with the bank statement, identifying timing differences and errors

To appraise a proposed investment by comparing its expected cash inflows against its initial outlay

Only when the cash from the customer has actually been received by the business in full

Only at the very end of the financial year, when all of the accounts are finally drawn up

When the annual budget setting out expected sales is formally approved by the directors

When it is earned, regardless of when the cash is received

Only the future cash flows that differ between the alternatives

All of the historical sunk costs the business has already committed to and paid for in the past

The total of every single cost the business has ever incurred, whether or not it changes with the decision

The depreciation already charged on the assets, even though no further cash flow results from it