Asb1106: introduction to financial and management accounting

ASB2516: FINANCIAL ACCOUNTING 1

CLASS TEST

TIME ALLOWED: 1 HOUR.

You MUST answer ALL questions.


Show clearly in your answer booklet your one ALPHABETICAL answer for each multiple choice question, and workings for section B.

PLEASE SHOW YOUR NAME ON ALL SUBMITTED PAGES.

Question 1

Which of the following measures is most likely to be relevant to a property management company which lets out student accommodation?

1. 
   Return on capital employed
   
2. 
   Non-current asset turnover
   
3. 
   Inventory turnover period
   
4. 
   Rental income earned
   

Question 2

Elliot and Co Pharmaceuticals current Price Earnings (P/E) ratio is 9.0.
The sector average for P/E ratio is 11

1. 
   Elliot and Co Pharmaceuticals is viewed as less risky investment than the sector average; therefore, there is increased confidence about the future of Elliot and Co Pharmaceuticals.
   
2. 
   Elliot and Co Pharmaceutical are seen to be a more risker investment compared to the sector average: there is decreased confidence about Elliot and Co Pharmaceuticals future.
   
3. 
   Elliot and Co Pharmaceutical are viewed as less risky investment compared to the sector average: there is decreased confidence about Elliot and Co Pharmaceuticals future.
   
4. 
   Elliot and Co Pharmaceutical are seen to be a more risker investment compared to the sector average: the increased confidence about Elliot and Co Pharmaceuticals future.
   

Question 3

The acid test ratio should not include the following:

1. 
   non-current liabilities
   
2. 
   trade receivables
   
3. 
   raw materials
   
4. 
   trade payables
   

Question 4

Which one of the following ratio is represented by the given formula?

1. 
   Dividend cover
   
2. 
   Dividend per share
   
3. 
   Dividend yield
   
4. 
   Total shareholder return
   

Question 5

Below is an extract from Reflect Ltd Income Statement 31 December 2019:

	£
Turnover	75,000
Less: cost of sales	42,000
Gross Profit	33,000
Less:
administration expenses	10,000
distribution expenses	11,000
Net Profit	22,000