Certificate in Credit T21 – 5R Strategic Consultancy Sdn Bhd

Name

Gross Profit is calculated as

Sales - Total Expenses

Net Profit - Tax

Sales - Cost of Good Sold

Sales - Operating Expenses

Cash received from issuing new shares is classified under

Investing activities

Financing activities

Non-Cash activities

Operating activities

A limitation of Statement of Comprehensive Income (SCI) is that profit can be manipulated through

Cash receipts

Changes in accounting estimates such as provision or useful life

Assets revaluation

Interest expense capitalisation exclusively

What is stated in the Director Report's declaration?

Address of directors

Relatives of directors

Appointment of directors

Chairman's report

For the purpose of credit assessment, the first step to reviewed by credit officer is

Auditor's opinion of the financial statement and notice of the directors

Statement of Financial Position

Statement of Comprehensive Income

Statement of Cash flow

Which of the activities examines the Cash Flow effects from the company day to day trading activities and its efficiency in managing working capital?

Cash Flow from projection activities

Cash Flow from operating activities

Cash Flow from financing activities

Cash Flow from investing activities

Which reports are only required for companies that are listed on the stock exchange?

I. Chairman's Report
II. Director's Report
III. Activities Report
IV. Auditor's Report

II and IV

I and III

III and IV

I and III

Which of the activities examines the effects from the company's strategic decision?

Cash Flow from operating activities

Cash Flow from projection activities

Cash Flow from investing activities

Cash Flow from financing activities

The term Working Capital is best defined as

Accumulated Profit

Current Assets less Current Liability

Total Assets less Total Liability

Cash plus Trade Receivable

Which of the followings are mandatory report required by the Company Act?

I. Chairman's Report
II. Director's Report
III. Activities Report
IV. Auditor's Report

II and IV

III and IV

I and II

I and III

The following are normally included in the notes to accounts except

Provisions for bad and doubtful debts

Subsequent statement of Financial Position events

Significant accounting policies

Breakdown of fixed assets by categories

Accumulated profits generated by the company over the years and not distributed to shareholders as dividend or bonus share is called

Revaluation Reserve

Shareholder Funds

Capital Reserve

Revenue Reserve

Which of the following correctly represents the accounting equation?

Assets = Equity

Assets + Liabilities = Equity

Assets - Liabilities = Expenses

Assets = Liabilities + Equity

Which of the following items would appear below to Operating Profit in Statement of Comprehensive Income?

Administrative Expenses

Finance Costs

Cost of Sales

Depreciation

Which statement best describes a limitation common to all 3 financial statements?

They can be influenced by management judgement

They do not show historical data

They include too much forward looking information

they are nit prepared according to standard

The Statement of Financial Position is segmented into Assets and Liabilities. Generally assets are classified into the following categories:

I. Fixed Assets
II. Non-Current Assets
III. Intangible Assets
IV. Current Assets

I and IV

II, III and IV

All the above

II and IV

The matching principles ensure that

Only material items are recorded

Only cash transaction are recorded

Revenue and Expenses are recorded when earned or incurred

Income is recognised when cash is received

The Statement of Comprehensive Income shows

Assets and Liabilities as at specific date

Revenue - Cost of Sales - Expenses

Revenue and Expenses are matched over period

Changes in Cash flow

"We are unable to satisfy ourselves as to the completeness and accuracy of the company accounting record owing to insufficient documentary record and unsatisfactory internal control". "We are unable to express the opinion that..." . The statement represent which auditor's report?

Qualified Opinion

Unqualified Opinion

Adverse Opinion

Disclaimer Opinion

In the statement of Financial Position, current assets are

Assets which are in liquid form

Assets expected to be used or converted into cash within 12 months

Assets used for more than accounting period

Cash, Stock and Trade Receivable

Which of the following can be classified under current as well as non-current liabilities?

I. Hire-Purchase Creditors
II. Overdraft
III. Bill Payable
IV. Term Loan

II and III

III and IV

I and IV

I and II

The statement of Financial Position shows

Changes in Retained Earning over period

Asset, Liabilities and Equity as at particular date

Cash inflow and outflow during a period

The profitability of the business

The Director's Report primary serve to

Details of company tax obligations

Present auditor's independent opinion

Provide audited financial statement

Present management's commentary on performance and future out look

Interest paid on loan is classified under

Financing inflow

Operating or Financing activity depending on accounting policy

Investing activity

Non-cash adjustment

Besides Statement of Financial Position and Statement of comprehensive Income, what are the other Financial Information Annual Report?

I. Statement of Cash flow
II. Statement of Projected Cash flow
III. Statement of Equity Changes
IV. Note to the Financial Statements

All the above

I, II and III

I, III and IV

I and II

Liabilities are classified into the following categories:

I. Owner's Equity
II. Paid Up Capital
III. Long-term Liabilities
IV. Current Liabilities

III and IV

II, III and IV

I, II and IV

All the above

Annual Report is comprehensive compilation of accounting and legal information regarding the company's business results for the year just ended. Those information are:

I. Director's Information
II. Auditor's Information
III. Financial Information
IV. Non-Financial Information

I, II and III

III and IV

I and II

All the above

A company with strong profits but negative operating cash flow may indicate

Healthy liquidity

Overtrading

Efficient Collection

Strong capital structure

The Statements of Cash Flows provide information's on

Solvency ratios

Liquidity and cash movements

Shareholders equity

Profitability

When comparing a trading and a manufacturing company, what is the typical characteristic of a trading company?

High operating profit margin

Value added product

Small capital

Large capital expenditure

The auditor's report in the annual report express

Board's opinion on financial soundness

Management's opinion on accounting policy

An independent opinion on whether financial statements are true or fair

The bank's credit rating of the company

The following details statements are not required statutory to be part of the set of accounts that need to be filed with CCM.

I. Statement of Comprehensive Income
II. Detailed Statement of Comprehensive Income
III. Manufacturing Account
IV. Statement of Cash flow

I and II

I and IV

II and III

All the above

An increase in Administrative Expenses will

Decrease in Operating Profit

No effect on Profit

Increase in Retained Earning

Decrease in Gross Profit

Which of the following is key limitation of Statement of Financial Position (SOFP)?

It provides forward looking indicators

It shows assets at current market price

It reflects financial position at a single point in time

It include all Contingent Liability

Which section of annual report explains significant changes in accounting estimate and judgements?

Notes the accounts

Auditor's Report

Chairman's statements

Corporate governance statement

Which are the following is not typically included in on annual report?

Auditor's Report

Director's Report

Marketing Plan for next financial year

Statement of Cash flow

Depreciation Expenses is included in the Statement of Comprehensive Income to

Deduct bob-cash items

Create cash reserves for replacement

Spread the cost of fixed assets over their useful lives

Reflect the fall in market value of assets

Arrange in sequence order the 3 critical activities of statement of Cash Flow

I. Cash Flow from projection activities
II. Cash Flow from financing activities
III. Cash Flow from operating activities
IV. Cash Flow from investing activities

II, III and IV

III, IV and II

III, IV and I

I, II and III

Purchase of machinery is shown in the Statement of Cash Flow as

Financing Outflow

Investing Outflow

Operating Inflow

Investing Inflow

Which of the following statement is true?

The bottom line in the detailed manufacturing statement represents the cost of good manufactured

The depreciation recorded in the Statement of Comprehensive Income is higher than depreciation captured in the manufacturing statement

Private exempt companies are required to have their financial statements audited and to be filed with CCM

The bottom line in the detailed manufacturing statement represents the net profit after tax

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