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| 2012-09-30 16:40:55 | What is the purpose of management accounting? | what-is-the-purpose-of-management-accounting |
What is the purpose of management accounting?Answer: To help management run the business in a way that achieves the objectives of the business. |
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| 2012-09-30 16:46:37 | What are the attributes of good information? | what-are-the-attributes-of-good-information |
What are the attributes of good information?Answer: Good information should be:
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| 2012-09-30 16:47:54 | What is the difference between data and information? | what-is-the-difference-between-data-and-information |
What is the difference between data and information?Data consists of facts that have been gathered. Information is data that has been processed in a way that is meaningful to the person who receives it. |
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| 2012-09-30 16:54:20 | What are the purposes of costing (i.e. calculating the cost of producing a product or service)? | what-are-the-purposes-of-costing-i-e-calculating-the-cost-of-producing-a-product-or-service |
What are the purposes of costing (i.e. calculating the cost of producing a product or service)?Answer: To enable a selling price to be set To calculate a profit per unit To value inventory |
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| 2012-09-30 17:11:56 | When sampling, what is meant by a ‘sampling frame’? | when-sampling-what-is-meant-by-a-sampling-frame |
When sampling, what is meant by a ‘sampling frame’? Answer:A sampling frame is a numbered list of all items in a population |
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| 2012-09-30 17:17:34 | What is meant by ‘random sampling’? | what-is-meant-by-random-sampling |
What is meant by ‘random sampling’?Answer: Each item in the population has an equal chance of being selected. |
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| 2012-09-30 17:18:46 | What is meant by ‘systematic sampling’? | what-is-meant-by-systematic-sampling |
What is meant by ‘systematic sampling’?Every n’th item is selected, after a random starting item |
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| 2012-09-30 17:19:40 | What is meant by ‘quota sampling’? | what-is-meant-by-quota-sampling |
What is meant by ‘quota sampling’?Answer: The population is stratified and a sample of each strata is restricted to a fixed number. |
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| 2012-09-30 21:36:49 | What is meant by a ‘line of best fit’? | what-is-meant-by-a-line-of-best-fit |
What is meant by a ‘line of best fit’?Answer: The line that most nearly goes through all the points when the data is plotted on a graph. |
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| 2012-09-30 21:37:39 | Describe a ‘pie chart’? | describe-a-pie-chart |
Describe a ‘pie chart’? Answer:A pie chart is a circle that is divided into segments representing each type of observation. The size of each segment is proportional to the proportion of the total that are within each type of observation. |
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| 2012-09-30 21:38:27 | What are ‘direct costs’? | what-are-direct-costs |
What are ‘direct costs’?Direct costs are those that can be specifically measured in each unit of production. |
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| 2012-09-30 21:39:09 | What is the ‘prime cost’ of a unit of production? | what-is-the-prime-cost-of-a-unit-of-production |
What is the ‘prime cost’ of a unit of production?Answer: The prime cost is the total of the direct costs of a unit. |
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| 2012-09-30 21:39:49 | What is mean by ‘indirect costs (or overheads)’? | what-is-mean-by-indirect-costs-or-overheads |
What is meant by ‘indirect costs (or overheads)’? Answer:Indirect costs are those costs which cannot be specifically identified with a specific cost unit or cost centre. |
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| 2012-09-30 21:40:35 | What is a ‘variable cost’? | what-is-a-variable-cost |
What is a ‘variable cost’?A variable cost is one which varies in total with the level of activity. |
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| 2012-09-30 21:41:12 | What is a ‘fixed cost’? | what-is-a-fixed-cost |
What is a ‘fixed cost’?Answer: A fixed cost is one which remains constant in total over certain levels of activity. |
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| 2012-09-30 21:41:44 | What is a ‘stepped fixed cost’? | what-is-a-stepped-fixed-cost |
What is a ‘stepped fixed cost’?Answer: A stepped fixed cost is one that is fixed in total within a certain level of activity, but where once an upper limit of activity is reached then a new higher level of fixed cost occurs. |
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| 2012-09-30 21:42:44 | What is a ‘semi-variable cost’? | what-is-a-semi-variable-cost |
What is a ‘semi-variable cost’?A semi-variable cost is a combination of variable and fixed costs. |
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| 2012-09-30 21:43:43 | Which would be the dependent variable? | which-would-be-the-dependent-variable |
If we have an equation relating the total sales revenue to the total advertising spend, which would be the dependent variable?Answer: The dependent variable would be the sales revenue (it depends on the amount of advertising expenditure.) |
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| 2012-09-30 21:44:27 | In the linear equation y = a + bx, which is the dependent variable? | in-the-linear-equation-y-a-bx-which-is-the-dependent-variable |
In the linear equation y = a + bx, which is the dependent variable?Answer: The dependent variable is y |
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| 2012-09-30 21:45:08 | In the linear equation y = a + bx, where y is the total cost and x is the total production, what is the fixed cost? | in-the-linear-equation-y-a-bx-where-y-is-the-total-cost-and-x-is-the-total-production-what-is-the-fixed-cost |
In the linear equation y = a + bx, where y is the total cost and x is the total production, what is the fixed cost?Answer: The fixed cost is ‘a’ in the equation |
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| 2012-10-01 14:14:23 | What is the variable cost per unit? | what-is-the-variable-cost-per-unit |
In the linear equation y = a + bx, where y is the total cost and x is the total production, what is the variable cost per unit?Answer: The variable cost per unit is ‘b’ in the equation |
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| 2012-10-01 14:15:36 | What would be the gradient of the line? | what-would-be-the-gradient-of-the-line |
If the linear equation y = a + bx, were to be drawn on a graph, what would be the gradient of the line?Answer: The gradient of the line would be ‘b’. |
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| 2012-10-01 14:16:10 | What is meant by a ‘cost unit’? | what-is-meant-by-a-cost-unit |
What is meant by a ‘cost unit’?Answer: A cost unit is a unit of product or service for which the cost is calculated. |
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| 2012-10-01 14:16:48 | What is meant by a ‘cost centre’? | what-is-meant-by-a-cost-centre |
What is meant by a ‘cost centre’?Answer: A cost centre is a production or service location, activity, function or item of equipment for which the total cost can be calculated. |
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| 2012-10-01 14:17:32 | What is a ‘purchase requisition form’? | what-is-a-purchase-requisition-form |
What is a ‘purchase requisition form’?Answer: A purchase requisition form is prepared by the department that requires the material and is sent to the purchasing department. |
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| 2012-10-01 14:18:04 | What is a ‘delivery note’? | what-is-a-delivery-note |
What is a ‘delivery note’?Answer: A delivery note is included by the supplier with the goods, and lists the quantity of goods that are being delivered. |
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| 2012-10-01 14:18:38 | What is mean by the FIFO method of valuing inventory? | what-is-mean-by-the-fifo-method-of-valuing-inventory |
What is meant by the FIFO method of valuing inventory?Answer: FIFO means first-in-first-out and means that we assume that items are issued out of inventory in the order in which they were received into inventory. Therefore, any closing inventory is assumed to be made up of the most recent items received into inventory. |
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| 2012-10-01 14:19:35 | Which of the following methods of inventory valuation are acceptable under IAS 2 for financial accounting | which-of-the-following-methods-of-inventory-valuation-are-acceptable-under-ias-2-for-financial-accounting |
Which of the following methods of inventory valuation are acceptable under IAS 2 for financial accounting:FIFO; LIFO; Weighted Average Cost ?Answer: FIFO and Weighted Average Cost are allowed by IAS 2. LIFO is not allowed. |
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| 2012-10-01 14:20:20 | In the formula on the formula sheet for the Economic Order Quantity, what does the symbol Co represent? | in-the-formula-on-the-formula-sheet-for-the-economic-order-quantity-what-does-the-symbol-co-represent |
In the formula on the formula sheet for the Economic Order Quantity, what does the symbol C o represent?Answer: C o represents the cost of placing one order. |
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| 2012-10-01 14:21:00 | In the formula on the formula sheet for the Economic Order Quantity, what does the symbol D represent? | in-the-formula-on-the-formula-sheet-for-the-economic-order-quantity-what-does-the-symbol-d-represent |
In the formula on the formula sheet for the Economic Order Quantity, what does the symbol D represent?Answer: D represents the total demand per year. |
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| 2012-10-01 14:21:36 | In the formula on the formula sheet for the Economic Order Quantity, what does the symbol Ch represent? | in-the-formula-on-the-formula-sheet-for-the-economic-order-quantity-what-does-the-symbol-ch-represent |
In the formula on the formula sheet for the Economic Order Quantity, what does the symbol C h represent?Answer: C h represents the cost of holding one unit for one year. |
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| 2012-10-01 14:22:51 | In inventory control, what is the difference between the ‘re-order quantity’ and the ‘re-order level’? | in-inventory-control-what-is-the-difference-between-the-re-order-quantity-and-the-re-order-level |
In inventory control, what is the difference between the ‘re-order quantity’ and the ‘re-order level’?Answer: The re-order quantity is the quantity actually ordered each time. The re-order level is the level of inventory that triggers the placing of an order. |
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| 2012-10-01 14:23:23 | In which circumstance do we use the formula for the Economic Batch Quantity instead of the formula for the Economic Order Quantity? | in-which-circumstance-do-we-use-the-formula-for-the-economic-batch-quantity-instead-of-the-formula-for-the-economic-order-quantity |
In which circumstance do we use the formula for the Economic Batch Quantity instead of the formula for the Economic Order Quantity?Answer: When we are producing our own inventory and therefore deliveries arrive over a period instead of all at once. |
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| 2012-10-01 14:23:58 | What is the difference between direct and indirect labour costs? | what-is-the-difference-between-direct-and-indirect-labour-costs |
What is the difference between direct and indirect labour costs?Answer: Direct labour costs are directly involved in the making of products - the basic pay plus overtime premium on specific jobs Indirect labour costs are all other labour costs - general overtime premiums, bonus payments, and the cost of indirect workers (e.g. canteen, maintenance) |
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| 2012-10-01 14:24:33 | What is meant by a piecework system of remuneration? | what-is-meant-by-a-piecework-system-of-remuneration |
What is meant by a piecework system of remuneration?Answer: Employees are paid a fixed amount for each unit produced. |
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| 2012-10-01 14:29:20 | Define the labour turnover ratio | define-the-labour-turnover-ratio |
Define the labour turnover ratio.Answer: Labour turnover ratio = number of leavers who require replacing / average number of employees x 100% |
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| 2012-10-01 14:49:28 | Define the labour efficiency ratio | define-the-labour-efficiency-ratio |
Define the labour efficiency ratioAnswer: Labour efficiency ratio = expected hours to produce actual output / actual hours to produce actual output x 100% |
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| 2012-10-01 14:50:58 | Define the labour idle time ratio | define-the-labour-idle-time-ratio |
Define the labour idle time ratioAnswer: Idle time ratio = idle hours / total hours x 100% |
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| 2012-10-01 14:51:40 | Define the labour capacity ratio | define-the-labour-capacity-ratio |
Define the labour capacity ratioLabour capacity ratio = Number of hours spent working / total hours available x 100% |
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| 2012-10-01 14:52:18 | Define the labour production volume ratio (activity ratio) | define-the-labour-production-volume-ratio-activity-ratio |
Define the labour production volume ratio (activity ratio)Answer: The labour production volume ratio = expected hours to produce actual output / total hours available (budgeted) x 100% |
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| 2012-10-01 15:17:20 | What is the difference between the allocation of overheads and the apportionment of overheads? | what-is-the-difference-between-the-allocation-of-overheads-and-the-apportionment-of-overheads |
What is the difference between the allocation of overheads and the apportionment of overheads?Allocation - whole cost items are charged to the relevant cost centre Apportionment - cost items are shared/divided between several cost centres |
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| 2012-10-01 15:18:42 | If there is an over-absorption of overheads, does it mean that the actual total overheads a more or less than the total overheads absorbed? | if-there-is-an-over-absorption-of-overheads-does-it-mean-that-the-actual-total-overheads-a-more-or-less-than-the-total-overheads-absorbed |
If there is an over-absorption of overheads, does it mean that the actual total overheads a more or less than the total overheads absorbed?Answer: The actual overheads are less than the total overheads absorbed. |
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| 2012-10-02 14:31:42 | What is mean by the word ‘contribution’? | what-is-mean-by-the-word-contribution |
What is meant by the word ‘contribution’?The contribution is the profit before fixed costs (or the revenue less all variable costs). |
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| 2012-10-02 14:32:31 | What is mean by the ‘marginal cost of production’? | what-is-mean-by-the-marginal-cost-of-production |
What is meant by the ‘marginal cost of production’?Answer: The marginal cost of production is the total of all variable production costs. |
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| 2012-10-02 14:33:25 | What is the reason for a difference between the profit calculated under marginal costing principles and the profit calculated under absorption costing principles? | what-is-the-reason-for-a-difference-between-the-profit-calculated-under-marginal-costing-principles-and-the-profit-calculated-under-absorption-costing-principles |
What is the reason for a difference between the profit calculated under marginal costing principles and the profit calculated under absorption costing principles?Answer: The difference is because of the difference in the way opening and closing inventories are valued. Under marginal costing they are valued at the marginal (variable) cost of production; under absorption costing they are valued at the full cost of production (variable plus fixed). |
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| 2012-10-02 14:33:59 | Under what circumstances will the profit using marginal costing and the profit using absorption costing be the same? | under-what-circumstances-will-the-profit-using-marginal-costing-and-the-profit-using-absorption-costing-be-the-same |
Under what circumstances will the profit using marginal costing and the profit using absorption costing be the same?The profits will be the same if there is no change in the level of inventory over the period (i.e. when the closing inventory is the same level as the opening inventory). |
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| 2012-10-02 14:34:26 | What is the difference between a profit mark-up and a profit margin? | what-is-the-difference-between-a-profit-mark-up-and-a-profit-margin |
What is the difference between a profit mark-up and a profit margin?Answer: A mark-up is when the profit is calculated as a percentage of cost; a margin is when the profit is calculated as a percentage of selling price. |
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| 2012-10-02 14:34:54 | In process costing, what is meant by a normal loss? | in-process-costing-what-is-meant-by-a-normal-loss |
In process costing, what is meant by a normal loss?A normal loss is the loss that is expected to occur. |
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| 2012-10-02 14:35:47 | In process costing, what is meant by an abnormal loss? | in-process-costing-what-is-meant-by-an-abnormal-loss |
In process costing, what is meant by an abnormal loss?Answer: An abnormal loss is the excess of the actual loss over the normal (or expected) loss. |
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| 2012-10-02 14:36:44 | In process costing, what is meant by an abnormal gain? | in-process-costing-what-is-meant-by-an-abnormal-gain |
In process costing, what is meant by an abnormal gain?Answer: An abnormal gain is the amount by which the actual loss is less than the normal (or expected) loss. |
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| 2012-10-02 14:37:13 | In process costing, how are abnormal losses or gains valued? | in-process-costing-how-are-abnormal-losses-or-gains-valued |
In process costing, how are abnormal losses or gains valued?Abnormal gains and losses are valued at full cost per unit. |
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| 2012-10-02 14:37:39 | What is meant by the term ‘by-product’? | what-is-meant-by-the-term-by-product |
What is meant by the term ‘by-product’?A by-product is output from a process which has a low value relative to the main product(s) being produced in the process. |
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| 2012-10-02 14:38:55 | What are the four main differences between the output of service and manufacturing businesses? | what-are-the-four-main-differences-between-the-output-of-service-and-manufacturing-businesses |
What are the four main differences between the output of service and manufacturing businesses?* Intangibility - the output of a service industry is performance rather than tangible goods. * Perishability - a service cannot be stored * Simultaneity - a service is received by the customer at the same time as it is delivered - it cannot be checked first. * Heterogeneity - every service is likely to be different. |
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| 2012-10-02 14:40:55 | In Activity Based Costing, what is meant by the term ‘cost driver’? | in-activity-based-costing-what-is-meant-by-the-term-cost-driver |
In Activity Based Costing, what is meant by the term ‘cost driver’?A cost driver is whatever activity is causing the cost to occur. |
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| 2012-10-02 14:41:37 | What is meant by the term ‘target cost’? | what-is-mean-by-the-term-target-cost |
What is meant by the term ‘target cost’?The target cost is the maximum cost we can allow in order to achieve the target level of profitability based on a pre-determined selling price. |
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| 2012-10-02 14:42:16 | What is meant by the ‘cost gap’ in the context of target costing? | what-is-meant-by-the-cost-gap-in-the-context-of-target-costing |
What is meant by the ‘cost gap’ in the context of target costing?The cost gap is the excess of the estimated actual cost over the target cost. |
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| 2012-10-02 14:42:52 | What are the basic principles involved in Total Quality Management? | what-are-the-basic-principles-involved-in-total-quality-management |
What are the basic principles involved in Total Quality Management?Answer: ‘Get it right first time’ - i.e. good quality production - no re-working, no rejects Continuous improvement Customer focus |
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| 2012-10-02 14:43:25 | What are the four types of cost relating to quality? | what-are-the-four-types-of-cost-relating-to-quality |
What are the four types of cost relating to quality?Answer: Prevention costs (the costs of improving the quality of the production process) Appraisal costs (the costs of quality control checks) Internal failure costs (the costs of re-working; the costs of rejects) External failure costs ( the costs of delivering poor quality to the customer - e.g. replacements, repair work) |
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| 2012-10-02 14:44:00 | In the formulae for regression analysis on the formulae sheet, what does the symbol n represent? | in-the-formulae-for-regression-analysis-on-the-formulae-sheet-what-does-the-symbol-n-represent |
In the formulae for regression analysis on the formulae sheet, what does the symbol n represent?Answer: n is the number of pairs of observations |
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| 2012-10-02 14:44:37 | What is the symbol for the coefficient of correlation on the formulae sheet? | what-is-the-symbol-for-the-coefficient-of-correlation-on-the-formulae-sheet |
What is the symbol for the coefficient of correlation on the formulae sheet?Answer: r is the coefficient of correlation |
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| 2012-10-02 14:53:29 | What is mean by the expression ‘perfect positive linear correlation’? | what-is-mean-by-the-expression-perfect-positive-linear-correlation |
What is meant by the expression ‘perfect positive linear correlation’?Perfect positive linear correlation means when the observations are plotted on a graph they all lie exactly on a straight line pointing upwards (i.e. both variables increase together) |
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| 2012-10-02 14:54:05 | How is the coefficient of determination calculated? | how-is-the-coefficient-of-determination-calculated |
How is the coefficient of determination calculated?The coefficient of determination is the square of the coefficient of correlation. |
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| 2012-10-02 14:54:41 | What does a coefficient of determination of 0.75 mean? | what-does-a-coefficient-of-determination-of-0-75-mean |
What does a coefficient of determination of 0.75 mean?It means that 75% of the changes in y are explained by changes in x. |
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| 2012-10-02 14:55:26 | If there is perfect negative correlation between two variables, what will be the value of the coefficient of correlation? | if-there-is-perfect-negative-correlation-between-two-variables-what-will-be-the-value-of-the-coefficient-of-correlation |
If there is perfect negative correlation between two variables, what will be the value of the coefficient of correlation?If there is perfect negative correlation, then r will equal -1. |
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| 2012-10-02 14:55:57 | A Laspeyre quantity index number uses base year or current year quantities. Which? | a-laspeyre-quantity-index-number-uses-base-year-or-current-year-quantities-which |
A Laspeyre price index number uses base year or current year quantities. Which?A Laspeyre price index number uses base year quantities. |
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| 2012-10-02 14:56:31 | A Paasche price index number uses base year or current year prices. Which? | a-paasche-price-index-number-uses-base-year-or-current-year-prices-which |
A Paasche price index number uses base year or current year quantities. Which?A Paasche index number uses current year quantities. |
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| 2012-10-02 14:57:07 | What are the purposes of budgeting? | what-are-the-purposes-of-budgeting |
What are the purposes of budgeting?Answer: Planning Control Co-ordination Authorisation Communication Motivation Evaluation |
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| 2012-10-02 14:57:42 | What is a flexed budget? | what-is-a-flexed-budget |
What is a flexed budget?Answer: A flexed budget is a budget re-written for the actual level of activity. |
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| 2012-10-02 15:02:57 | What is meant by the ‘principal budget factor’? | what-is-meant-by-the-principal-budget-factor |
What is meant by the ‘principal budget factor’?The principal budget factor is the factor that limits the level of activity of the organisation (usually sales). |
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| 2012-10-02 15:03:59 | What is the difference between capital expenditure and revenue expenditure? | what-is-the-difference-between-capital-expenditure-and-revenue-expenditure |
What is the difference between capital expenditure and revenue expenditure?Answer: Capital expenditure is the acquisition of non-current assets (which appear on the Statement of Financial Position) Revenue expenditure is the payment of running expenses (which appear on the Income Statement) |
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| 2012-10-02 15:04:32 | What is a ‘sunk cost’? | what-is-a-sunk-cost |
What is a ‘sunk cost’?Answer: A sunk cost is a cost already incurred (and is not relevant for investment decisions) |
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| 2012-10-02 15:05:41 | What is meant by the ‘payback period’? | what-is-meant-by-the-payback-period |
What is meant by the ‘payback period’?The payback period is the number of years it takes to get back the original investment, in cash terms. |
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| 2012-10-02 15:06:16 | What is the definition of the Internal Rate of Return (IRR)? | what-is-the-definition-of-the-internal-rate-of-return-irr |
What is the definition of the Internal Rate of Return (IRR)?The IRR is the rate of interest at which the Net Present Value of the project is zero. |
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| 2012-10-02 15:06:45 | What is top-down budgeting? | what-is-top-down-budgeting |
What is top-down budgeting?Answer: Top-down budgeting is where the budgets are prepared by high-level management and then communicated to lower levels. Lower level management do not participate in the budget process. |
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| 2012-10-02 15:07:32 | What is bottom-up budgeting? | what-is-bottom-up-budgeting |
What is bottom-up budgeting?Answer: Bottom-up budgeting is where lower level managers are involved in the budget process - they prepare budgets for their departments which are then checked and co-ordinated by higher level management. |
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| 2012-10-02 15:07:56 | What does the sales volume variance measure? | what-does-the-sales-volume-variance-measure |
What does the sales volume variance measure?The sales volume variance measures the effect on the budgeted profit of the difference between the actual sales volume and the budgeted sales volume. |
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| 2012-10-02 15:08:24 | What is the purpose of an operating statement (as part of variance analysis)? | what-is-the-purpose-of-an-operating-statement-as-part-of-variance-analysis |
What is the purpose of an operating statement (as part of variance analysis)?Answer: The operating statement shows why the actual profit differs from the budgeted profit. |
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| 2012-10-02 15:09:04 | Give possible reasons for an adverse material expenditure variance. | give-possible-reasons-for-an-adverse-material-expenditure-variance |
Give possible reasons for an adverse material expenditure variance.Answer: Possible reasons for an adverse material expenditure variance include: - paying more than the budgeted price per unit of materials due to errors in purchasing - a price increase in materials - purchasing better quality materials - incorrect budgeting of the standard cost of materials |
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| 2012-10-02 15:09:37 | What are the four main elements that one would expect to appear in a Mission Statement? | what-are-the-four-main-elements-that-one-would-expect-to-appear-in-a-mission-statement |
What are the four main elements that one would expect to appear in a Mission Statement?Answer: The four main elements are:
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| 2012-10-02 15:10:02 | What is the Current Ratio? | what-is-the-current-ratio |
What is the Current Ratio?The current ratio = current assets / current liabilities |
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| 2012-10-02 15:10:55 | What is the Quick Ratio (or Acid-test Ratio)? | what-is-the-quick-ratio-or-acid-test-ratio |
What is the Quick Ratio (or Acid-test Ratio)?The quick ratio = (current assets - inventory) / current liabilities |
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| 2012-10-02 15:11:32 | How is the Interest Cover calculated? | how-is-the-interest-cover-calculated |
How is the Interest Cover calculated?The interest cover = profit before interest and tax / interest |
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| 2012-10-02 15:12:01 | How is the Dividend Cover calculated? | how-is-the-dividend-cover-calculated |
How is the Dividend Cover calculated?The dividend cover = profit after tax / dividends |
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| 2012-10-02 15:12:28 | How is the Return on Investment (ROI) calculated? | how-is-the-return-on-investment-roi-calculated |
How is the Return on Investment (ROI) calculated?ROI = profit / capital invested |
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| 2012-10-02 15:12:56 | How is the Residual Income (RI) calculated? RI = profit less notional interest on the capital invested | how-is-the-residual-income-ri-calculated-ri-profit-less-notional-interest-on-the-capital-invested |
How is the Residual Income (RI) calculated?RI = profit less notional interest on the capital invested |
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| 2012-10-02 15:13:37 | What are the four perspectives covered by the Balanced Scorecard? | what-are-the-four-perspectives-covered-by-the-balanced-scorecard |
What are the four perspectives covered by the Balanced Scorecard?Answer: The four perspectives are:
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| 2012-10-02 15:14:13 | What is meant by the term ‘benchmarking’? | what-is-meant-by-the-term-benchmarking |
What is meant by the term ‘benchmarking’?Answer: Benchmarking is the comparison with best practice. |
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| 2012-10-02 15:14:46 | In assessing ‘Value for Money’, what are the three ‘E’s’? | in-assessing-value-for-money-what-are-the-three-es |
In assessing ‘Value for Money’, what are the three ‘E’s’?Answer: The three ‘E’s’ are:
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| 2012-10-02 16:12:04 | What is mean by an ‘incremental cost’? | what-is-mean-by-an-incremental-cost |
What is meant by an ‘incremental cost’?Answer: An incremental cost is an extra cost (and is relevant for investment decisions). |
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| 2012-10-12 17:19:00 | What are the five fundamental principles of professional ethics? | what-are-the-five-fundamental-principles-of-the-accas-ethical-code |
What are the five fundamental principles of professional ethics? Answer:
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| 2012-10-12 17:19:51 | What are the five elements of an assurance engagement? | what-are-the-five-elements-of-an-assurance-engagement |
What are the five elements of an assurance engagement? Answer:
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| 2012-10-12 17:20:39 | What assurance does a reasonable assurance engagement provide? | what-is-another-name-for-a-reasonable-assurance-engagement |
What assurance does a reasonable assurance engagement provide?Answer: Positive assurance (also known as reasonable assurance) |
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| 2012-10-12 17:21:36 | What assurance does a limited assurance engagement provide? | what-is-another-name-for-a-limited-assurance-engagement |
What assurance does a limited assurance engagement provide? Answer:Negative assurance (also known as limited assurance) |
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| 2012-10-12 17:25:42 | When would a practitioner NOT be able to express an unmodified conclusion on an assurance engagement? | what-are-the-two-general-reasons-that-would-lead-a-practitioner-not-to-issue-an-unqualified-conclusion-to-an-assurance-engagement |
When would a practitioner NOT be able to express an unmodified conclusion on an assurance engagement? Answer:There is a limitation on the scope of the practitioner’s work. The assertion is not fairly stated or the subject matter information is materially misstated. |
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| 2012-10-12 17:26:49 | Who sets International Standards on Auditing? | who-sets-the-international-standards-on-auditing |
Who sets International Standards on Auditing?Answer: International Standards on Auditing are set by the International Auditing and Assurance Standards Board (IAASB) – a board of the International Federation of Accountants (IFAC). |
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| 2012-10-12 17:27:29 | What is a "statement of circumstances"? | what-is-a-statement-of-circumstances |
What is a "statement of circumstances"?Answer: A statement of circumstances is a statement that auditors are required to make upon resignation or removal as auditors. It will state whether there are any untoward reasons for their removal or resignation – such as non-cooperation by the directors. |
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| 2012-10-12 17:28:41 | What TWO provisions support this principle? | what-are-the-five-main-principles-of-the-uk-corporate-governance-code | One of the main principles of the UK Corporate Governance Code is Board Leadership and Company Purpose. What TWO provisions support this principle? Answer: Every company should be headed by an effective board which is collectively responsible for the long-term success of the company. All directors must act with integrity , lead by example and promote the desired culture . | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-12 17:29:34 | In relation to corporate governance, what does "comply or explain" mean? | in-relation-to-corporate-governance-what-does-comply-or-explain-mean |
In relation to corporate governance, what does "comply or explain" mean?Answer: Listed companies are expected to comply with the corporate governance code and state that they have done so or, if they have not, to explain why not. |
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| 2012-10-12 17:30:35 | What are the main roles of an audit committee? (Give THREE) | what-is-a-ned |
What are the main roles of an audit committee? (Give THREE) Answer:? Monitor the integrity of the financial statements ? Review internal financial controls and risk management systems ? Monitor and review the effectiveness of internal audit ? Make recommendations concerning the external auditor (appointment, remuneration, etc) ? Implement policy for engaging the external auditor to supply non-audit services (Only three asked for) |
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| 2012-10-12 17:31:20 | What are the FIVE main principles of the UK Corporate Governance Code? | how-many-non-executive-directors-should-be-on-a-board-of-directors-to-comply-with-the-uk-corporate-governance-code |
What are the FIVE main principles of the UK Corporate Governance Code?Answer: Board Leadership and Company Purpose Division of Responsibilities Composition, Succession and Evaluation Audit, Risk and Internal Control Remuneration |
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| 2012-10-12 17:32:03 | What committee of the board of directors is responsible for determining directors’ pay? | what-sub-committee-of-the-board-of-directors-is-responsible-for-determining-directors-pay |
What committee of the board of directors is responsible for determining directors’ pay?Remuneration committee |
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| 2012-10-12 17:32:52 | What committee of the board of directors should lead appointments to the board? | what-sub-committee-of-the-board-of-directors-is-responsible-for-finding-new-directors |
What committee of the board of directors should lead appointments to the board?Answer: Nomination committee |
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| 2012-10-12 17:33:49 | To comply with this, what roles should be separated? | what-roles-should-be-split | One of the main principles of the UK Corporate Governance Code is the division of responsibilities. To comply with this, what roles should be separated? Answer: The roles of Chief Executive Officer and Chairman should be separated. | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-12 17:34:17 | Define an audit | define-an-audit |
Define an auditAnswer: An audit is the independent examination of, and expression of opinion on, the financial statements of an entity . |
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| 2012-10-12 18:03:51 | Define corporate governance | define-corporate-governance |
Define corporate governanceAnswer: Corporate governance: the system by which companies are directed and controlled |
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| 2012-10-12 18:04:26 | In relation to corporate governance, what is the ‘agency problem’? | in-relation-to-corporate-governance-what-is-meant-by-the-agency-problem |
In relation to corporate governance, what is the ‘agency problem’?Shareholders own the company and are its principles. Directors run the company and are the agents of the shareholders. The agency problem arises if directors do not act in the best interests of the shareholders, but for themselves (e.g. excessive executive remuneration). |
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| 2012-10-12 18:04:56 | What are the FIVE categories of threats to the fundamental principles of professional ethics? | what-six-threats-can-relate-to-objectivity-integrity-and-independence |
What are the FIVE categories of threats to the fundamental principles of professional ethics?Answer: * Self-interest * Self-review * Familiarity * Advocacy * Intimidation |
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| 2012-10-12 18:05:29 | The ACCA Code of Ethics and Conduct requires that a key auditor partner cannot serve a PIE client for more than how many years? | acca-suggest-that-lead-audit-partners-should-be-rotated-no-less-frequently-than-how-many-years |
Long association of senior personal creates a threats to the fundamental ethical principles.
The ACCA Code of Ethics and Conduct requires that a key auditor partner cannot serve a PIE client for more than how many years?Answer: Seven years |
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| 2012-10-12 18:05:58 | What is a familiarity threat? | what-is-a-familiarity-threat |
What is a familiarity threat?Answer: The threat that due to a long or close relationship with a client, the auditor will be too sympathetic to their interests or too accepting of their work. |
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| 2012-10-12 18:06:34 | What is the restriction on percentage fees from a public interest entity (PIE) client? | what-are-the-suggested-limits-for-the-percentage-of-total-fees-coming-from-any-one-client-ordinary-clients-and-special-interest-clients |
What is the restriction on percentage fees from a public interest entity (PIE) client?Answer: The total fees from a PIE client should not exceed 15% of the firm's total fees for two consecutive years . |
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| 2012-10-12 18:07:12 | If the client refuses permission for communication to take place, what should the proposed new auditor do? | 16469 | Before accepting a new audit appointment, the proposed new auditor should communicate with the retiring auditor. If the client refuses permission for communication to take place, what should the proposed new auditor do? Answer: Decline the appointment | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-12 18:07:44 | What are the three components of audit risk? | what-are-the-three-components-of-audit-risk |
What are the three components of audit risk, according to the audit risk model?Answer: Inherent risk Control risk Detection risk |
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| 2012-10-12 18:08:12 | What are the two components of the risk of material misstatement in financial statements? | what-two-risks-contribute-to-the-risk-of-material-misstatement-in-the-financial-statements |
What are the two components of the risk of material misstatement in financial statements?Answer: Inherent risk Control risk |
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| 2012-10-12 18:08:41 | What are the two components of detection risk? | what-two-types-of-risk-make-up-detection-risk |
What are the two components of detection risk?Answer: Sampling risk and non-sampling risk. |
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| 2012-10-13 15:19:53 | What is sampling risk? | what-is-sampling-risk |
What is sampling risk?Answer: This risk that arises when audit procedures are applied to samples rather than entire populations. The auditor may conclude, based on only a sample, that controls are more effective than they actually are or that there is no material misstatement when, in fact, there is. |
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| 2012-10-13 15:20:27 | What are the TWO types of substantive procedures for obtaining audit evidence? | are-analytical-procedures-part-of-tests-of-control-or-substantive-tests |
What are the TWO types of substantive procedures for obtaining audit evidence?Answer: Tests of details (of classes of transactions, account balances and disclosures) Substantive analytical procedures |
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| 2012-10-13 15:26:14 | Against what may these ratios be compared? | a-common-element-of-analytical-procedures-is-ratio-analysis-name-three-sources-of-comparison-for-any-ratios-calculated |
Analytical procedures are used to evaluate plausible relationships between financial and non-financial
data including, calculating ratios.
Against what may these ratios be compared?* Previous years’ ratios * Budget ratios * Industry standard ratios |
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| 2012-10-13 15:27:22 | What is meant by “overall audit strategy”? | what-are-the-six-objectives-of-audit-planning | What is meant by “overall audit strategy”? Answer: The overall audit strategy sets the scope, timing and direction of the audit. It helps guide the development of the more detailed audit plan. | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-13 15:27:46 | What is the difference between an interim and final audit? | at-which-stage-of-an-audit-interim-or-final-will-the-documentation-of-systems-and-procedural-tests-usually-be-carried-out | What is the difference between an interim and final audit? Answer: An interim audit takes places during the reporting period, before the date of the financial statements; the final audit starts around or after the reporting date (typically a year end). | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-13 15:28:08 | What is ‘materiality’? | define-materiality |
What is ‘materiality’?Answer: Misstatements, including omissions, are consider material if, individually or in aggregate, they could reasonably be expected influence the economic decisions users taken on the basis of the financial statements. |
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| 2012-10-13 15:28:37 | What is performance materiality? | what-is-performance-materiality |
What is performance materiality?Answer: Materiality relates to financial statements as a whole. Additionally, a lesser amount is set when designing audit procedures to reduce the risk that misstatements in aggregate exceed financial statement materiality. This is performance materiality. |
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| 2012-10-13 15:28:57 | What is the auditors’ primary responsibility with respect to fraud? | what-are-auditors-duties-with-respect-to-fraud |
What is the auditors’ primary responsibility with respect to fraud?Answer: Managers, not auditors, are responsible for the prevention or detection of fraud. However, auditors are expected (with reasonable assurance) to find material misstatements, whether due to fraud or error. |
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| 2012-10-13 15:29:17 | What are the two types of audit file? | what-are-the-two-types-of-audit-file |
What are the two types of audit file?Answer: Current audit file (detail’s this year’s work) and permanent audit file (holds more permanent information such as organisation charts, letters of engagement etc). |
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| 2012-10-13 15:30:15 | Which financial statement assertions are relevant to account balances and related disclosures at the period end? | what-are-the-audit-assertions-as-represented-by-acca-cover | Which financial statement assertions are relevant to account balances and related disclosures at the period end? Answer: Existence Rights and obligations Completeness Accuracy, valuation and allocation Classification Presentation | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-13 15:36:43 | What is the difference between the audit procedures “recalculation” and “reperformance”? | isa500-states-that-auditors-must-obtain | What is the difference between the audit procedures “recalculation” and “reperformance”? Answer: Recalculation is a check of mathematical accuracy of documents or records - i.e. a substantive procedure. Reperformance is the auditor’s independent execution of procedures or controls that were originally performed as part of the entity’s internal controls - i.e. a test of control. | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-13 15:37:24 | What are the FIVE procedures for obtaining of audit evidence? | what-are-the-sources-or-procedures-for-obtaining-of-audit-evidence |
What are the FIVE procedures for obtaining of audit evidence?Answer: Analytical procedures Enquiry and confirmation Inspection Observation Recalculation and reperformance |
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| 2012-10-13 15:38:35 | Name SIX sample selection methods. | list-six-types-of-sampling |
Name SIX sample selection methods.Answer: * Random selection * Systematic (interval) selection * Haphazard selection, * Block selection * Stratification * Value weighted selection (e.g. as used in monetary unit sampling) |
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| 2012-10-13 15:39:15 | Does sampling risk increase or decrease as the sample size increases? | does-sampling-risk-increase-or-decrease-as-the-sample-size-increases |
Does sampling risk increase or decrease as the sample size increases?Answer: As more items are examined in the sample, sampling risk decreases. |
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| 2012-10-13 15:39:49 | Does non-sampling risk increase or decrease as the sample size increases? | does-non-sampling-risk-increase-or-decrease-as-the-sample-size-increases |
Does non-sampling risk increase or decrease as the sample size increases?Answer: Non-sampling risk does not depend on sample size. This risk is affected by the experience and ability of the auditor, supervision and planning. |
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| 2012-10-13 15:40:18 | What is "audit software"? | what-aspects-of-a-clients-undertaking-do-computer-audit-programs-examine |
What is "audit software"?Answer: Audit software (also called audit program) is a computer-assisted audit technique (CAAT) used to examine and interrogate clients' accounting data. |
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| 2012-10-13 15:40:45 | What is "test data"? | what-aspects-of-a-clients-undertaking-is-computer-test-data-used-to-test |
What is "test data"?Answer: Test data is a computer-assisted audit technique (CAAT) used to investigate the operations of client programs. |
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| 2012-10-13 15:41:18 | What is the difference between management's expert and the auditor's expert? | what-matters-should-the-auditor-agree-with-third-parties-who-are-carrying-out-some-audit-work |
What is the difference between management's expert and the auditor's expert?Answer: An expert has expertise in a field other than accounting or auditing : * Management’s expert – assists management in preparing the financial statements . * Auditor’s expert – assists the auditor in obtaining sufficient appropriate audit evidence . May be internal or external to the audit firm. |
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| 2012-10-13 15:42:03 | What THREE criteria must be met for an external auditor to use the work of internal audit? | what-qualities-should-the-auditor-look-for-in-third-parties-who-are-carrying-out-some-audit-work |
What THREE criteria must be met for an external auditor to use the work of internal audit?Answer: Internal audit must be objective, competent and apply a systematic and disciplined approach to planning, performing and documenting its activities, including quality control. |
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| 2012-10-13 15:42:33 | What aspects of an expert’s audit work should an auditor evaluate? | what-aspects-of-a-third-party-experts-audit-work-should-an-auditor-examine |
What aspects of an expert’s audit work should an auditor evaluate?Answer: The auditor must evaluate the adequacy of the expert’s work with respect to: * Consistency with other evidence * Assumptions made * Use and accuracy of source data. |
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| 2012-10-13 15:43:17 | In what TWO circumstances would tests of control NOT be carried out? | under-what-conditions-would-substantive-tests-be-carried-out-instead-of-tests-of-control |
In what TWO circumstances would tests of control NOT be carried out?Answer: Tests of control would not be carried out if: Controls do not exist or are not expected to operate effectively, or There are relatively few transactions such that substantive procedures alone is the more efficient audit approach. |
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| 2012-10-13 15:44:04 | What are the five components of internal control? | what-are-the-five-components-of-internal-control |
What are the five components of internal control?Answer: * The control environment * Risk assessment process * Control activities * Information system * Monitoring controls |
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| 2012-10-13 15:44:40 | What are the two general classes of control activities in information processing? | 16508 |
What are the two general classes of control activities in information processing?Answer: General controls – over the development, prevention of unauthorised changes etc, backup. Application controls – over the initiation, recording, processing and recording transactions. |
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| 2012-10-13 15:54:38 | What is ‘standing data’? | in-a-computer-system-what-is-meant-by-the-term-standing-data |
What is ‘standing data’?Answer: Standing data (also known as reference data) does not change often. For example, wage rates or customer addresses. However, this data is often accessed and used, so an error in standing data can cause many other errors. |
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| 2012-10-13 15:55:38 | What are the main inherent limitations of internal controls? | what-are-the-five-inherent-limitations-to-internal-control |
What are the main inherent limitations of internal controls?Answer: * Cost v benefit * Human error * Collusion * Management override (bypass) * Non-routine transactions |
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| 2012-10-13 15:57:22 | What three headings (or columns) will usually be used to structure such letters? | what-are-the-normal-three-headings-or-columns-in-such-letters |
Auditors routinely report internal control matters to management in a management letter.
What three headings (or columns) will usually be used to structure such letters?Answer: The nature of the weakness/what the problem is The implications or possible consequences of the weakness Recommendations how to fix the weakness. |
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| 2012-10-13 15:58:31 | What three methods can be used to record accounting and internal control systems? | what-are-the-three-methods-that-can-be-used-to-record-and-document-accounting-systems |
What three methods can be used to record accounting and internal control systems?Answer: * Narrative notes * Flowcharts * Questionnaires (ICQs and ICEQs) |
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| 2012-10-13 15:59:05 | What are “control activities”? | in-an-iceq-does-the-answer-no-imply-that-a-control-is-present-or-absent |
What are “control activities”?Answer: Control activities are the policies and procedures which help ensure that: ? management directives are carried out ? actions are taken to address risks that threaten the achievement of the entity's objectives |
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| 2012-10-13 16:00:47 | What is meant by the “control environment”? | in-an-icq-does-the-answer-yes-imply-that-a-control-is-present-or-absent |
What is meant by the “control environment”?Answer: The control environment includes: * governance and management functions * the attitude , awareness and actions of management |
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| 2012-10-13 16:01:30 | Is this a control objective, a control procedure or a control test? | is-this-an-example-of-a-control-objective-a-control-procedure-or-a-control-test |
In an accounting system, all credit notes issues are authorised by the chief accountant.Is this a control objective, a control procedure or a control test?Answer: This is an example of a control procedure. The control objective is that credit notes are issued only for legitimate reasons; the test of control would be inspecting the credit notes for the manager’s signature. |
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| 2012-10-13 16:01:55 | What evidence gathering procedures can be used to test the operating effectiveness of controls? | what-are-the-general-methods-for-testing-controls |
What evidence gathering procedures can be used to test the operating effectiveness of controls?Answer: Inspection e.g. of initials/signatures on documents Observation e.g. watching goods received being counted Re-performance e.g. reperforming a bank reconciliation to ensure that it was properly carried out. Remember: Enquiry alone is not sufficient to test operating effectiveness |
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| 2012-10-13 16:04:06 | To whom should the auditor report (a) significant deficiencies and (b) other deficiencies ? | to-whom-should-the-auditor-report-a-significant-control-deficiencies-and-b-other-weaknesses | To whom should the auditor report (a) significant deficiencies and (b) other deficiencies? Answer: (a) To those charged with governance. By definition "significant deficiencies" are those that merit the attention of TCWG (b) To appropriate level of management. | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-13 17:01:31 | What does the financial statement assertion of “cut-off” mean? | isa-315-categorises-audit-assertions-into-three-groupings-what-are-those-groupings | What does the financial statement assertion of “cut-off” mean? Answer: Cut-off means that transactions and events have been recorded in the correct accounting period to which they relate. | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-13 17:04:56 | What is meant by the term "financial statement assertions"? | what-audit-assertions-relate-to-transactions |
What is meant by the term "financial statement assertions"? Answer:Financial statement assertions are the implicit and explicit claims and representations made by management about the elements of financial statements and related disclosures. |
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| 2012-10-13 17:05:59 | What are the financial statement assertions about account balances and related disclosures? | what-are-the-audit-assertions-relating-to-year-end-balances |
What are the financial statement assertions about account balances and related disclosures? Answer:These assertions relate to year-end balances: * Existence * Rights and obligations * Completeness * Accuracy, valuation and allocation * Classification * Presentation |
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| 2012-10-13 17:06:43 | What are the financial statements assertions about classes of transactions and events and related disclosures? | what-are-the-audit-assertions-relating-to-presentation-and-disclosure |
What are the financial statements assertions about classes of transactions and events and related disclosures? Answer:These assertions relate to the period under audit: * Occurrence * Completeness * Accuracy * Cut-off * Classification * Presentation |
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| 2012-10-13 17:07:45 | What are the two types of external confirmation request? | what-are-the-two-types-of-receivables-circularisation |
What are the two types of external confirmation request?Answer: Positive - everyone is asked to respond. Negative - respond only in the event of disagreement (i.e. with the given balance). |
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| 2012-10-13 17:08:51 | Goods were received on 31 December 20X0, the reporting date. The related supplier's invoice was received on 5 January 20X1. | is-cut-off-correct-if-an-item-is-included-in-closing-inventory |
Goods were received on 31 December 20X0, the reporting date. The related supplier's invoice was received on 5 January 20X1.
What is the correct accounting treatment?Answer: Goods must be included in inventory and the liability recognised (i.e. Dr Purchases/Cr "Goods received not invoiced" accrual. |
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| 2012-10-13 17:09:44 | Is purchases cut-off correct? | is-cut-off-correct-for-an-item-is-not-included-in-closing-inventory-no-goods-received |
The year end is 31 December 20X0.
A supplier's invoice was received and processed on 31 December which was also the date of the physical inventory count. The goods were received on 1 January 20X1.
Is purchases cut-off correct?Answer: Cut-off is incorrect . There is no liability until the goods are received. The invoice amount should not be included in purchases for the year/trade payables at the reporting date. |
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| 2012-10-13 17:10:33 | Is sales cut-off correct? | is-cut-off-correct-for-an-item-is-included-in-closing-inventory-a-sales-despatch |
The year end is 31 December 20X0.
A sales invoice is raised on 2 January 20X1 in respect of goods despatched on 1 January. The goods are included in the year-end inventory valuation.
Is sales cut-off correct? Answer: Yes |
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| 2012-10-13 17:11:05 | Define a contingent liability | define-a-contingent-liability |
Define a contingent liabilityAnswer: A contingent liability is a possible liability arising from past events…. existence confirmed by future events |
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| 2012-10-13 17:11:36 | What is the correct accounting treatment of a contingent liability where settlement is less than probable? | what-is-the-correct-accounting-treatment-of-a-contingent-liability-where-the-outflow-of-resources-is-probably-not-required |
What is the correct accounting treatment of a contingent liability where settlement is less than probable?Answer: Disclose unless likelihood is "remote". |
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| 2012-10-13 17:12:15 | What is the correct treatment of a contingent asset where the inflow of economic benefits is not probable? | what-is-the-correct-treatment-of-a-contingent-asset-where-the-inflow-of-economic-benefits-is-not-probable |
What is the correct treatment of a contingent asset where the inflow of economic benefits is not probable?Answer: No disclosure; no provision. |
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| 2012-10-13 17:13:19 | Define an adjusting event | define-an-adjusting-event |
Define an adjusting eventAnswer: An adjusting event is one which provided evidence of conditions that existed at the date of the statement of financial position. |
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| 2012-10-13 17:13:53 | Define a non-adjusting event. | define-a-non-adjusting-event |
Define a non-adjusting event.Answer: A non-adjusting event is one that relates to conditions that arose after the date of the statement of financial position. |
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| 2012-10-13 17:14:30 | For how long after the date of the statement of financial position should going concern be assessed? | for-how-long-after-the-date-of-the-statement-of-financial-position-should-going-concern-be-assessed |
For how long after the date of the statement of financial position should going concern be assessed?Answer: 12 months (minimum) |
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| 2012-10-13 17:15:14 | What audit opinion should be expressed if doubts about going concern are fully disclosed in the financial statements? | what-sort-of-audit-report-should-be-issued-if-going-concern-doubts-are-fully-disclosed-in-the-financial-statements |
What audit opinion should be expressed if doubts about going concern are fully disclosed in the financial statements?Answer: The audit opinion will be UNmodified. (The report should contain a Material Uncertainty Relating to Going Concern section drawing users’ attention to the accounting policy note relating to going concern.) |
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| 2012-10-13 17:15:43 | What audit opinion should be expressed if doubts about going concern are not fully disclosed in the financial statements? | what-sort-of-audit-report-should-be-issued-if-going-concern-doubts-are-not-fully-disclosed-in-the-financial-statements |
What audit opinion should be expressed if doubts about going concern are not fully disclosed in the financial statements?Answer: The audit opinion will be modified with a qualified opinion "except for" the omission of the disclosure (i.e. misstatement in the financial statements). |
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| 2012-10-13 17:54:03 | What written representations must be obtained concerning management's responsibilities? | in-what-two-circumstances-might-management-representations-provide-the-only-source-of-audit-evidence |
What written representations must be obtained concerning management's responsibilities?Answer: That management and those charged with governance have:
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| 2012-10-13 17:55:05 | What do financial statements consist of? | of-what-do-financial-statements-consist |
What do financial statements consist of?Answer: * Statement of financial position ("balance sheet") * Statement of profit or loss and other comprehensive income ("income statement") * Statement of changes in equity * Cash flow statement * Notes to the above, including significant accounting policies |
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| 2012-10-13 17:55:40 | In what circumstances would an auditor refer to the directors’ report in an auditor's report? | in-what-circumstances-would-auditors-refer-to-the-directors-report-in-their-audit-report |
In what circumstances would an auditor refer to the directors’ report in an auditor's report?Answer: An auditor would refer to the directors’ report in the auditor's report if, for example, it contradicted the financial statements. Assuming the misstatement is in the directors's report (not the financial statements), the matter will be drawn to the reader's attention in an "other information" paragraph. |
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| 2012-10-13 17:57:05 | What words are missing from the following extract from an auditor's report? | what-are-the-words-missing-from-the-following-extract-from-the-audit-report | What words are missing from the following extract from an auditor's report? Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain XXXXXXXXXXXX about whether the financial statements XXXXXXXXXXXX are free from XXXXXXXXXXXX . Answer: Auditor's Responsibility for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement. | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-13 18:01:08 | What two circumstances require the audit opinion to be modified? | what-are-the-two-reasons-for-which-an-audit-report-can-be-qualified |
What two circumstances require the audit opinion to be modified?Answer: 1 The financial statements are not free from material misstatement. 2 The auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements are free from material misstatement. |
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| 2012-10-13 18:01:48 | What paragraph would be included in an auditor's report to draw users’ attention to a matter that is fundamental ... | what-is-the-title-of-the-paragraph-that-can-be-inserted-in-an-audit-report-to-draw-users-attention-to-a-note-in-the-financial-statements |
What paragraph would be included in an auditor's report to draw users’ attention to a matter that is fundamental to their understanding of the financial statements?Answer: An emphasis of matter paragraph |
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| 2012-10-13 18:02:52 | The inclusion of an emphasis of matter paragraph in the auditor's report does not modify the audit opinion. | is-the-following-true-or-false-the-inclusion-of-an-emphasis-of-matter-paragraph |
The inclusion of an emphasis of matter paragraph in the auditor's report does not modify the audit opinion.
Is this statement true or false?Answer: True. The inclusion of an EoM in the auditor's report does not affect the audit opinion. |
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| 2012-10-13 18:03:33 | What type of audit opinion is given if the financial statements contain misstatements that are material and pervasive? | what-type-of-audit-report-is-given-if-the-fs-contain-a-pervasive-material-misstatement |
What type of audit opinion is given if the financial statements contain misstatements that are material and pervasive?Answer: Adverse opinion |
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| 2012-10-13 18:04:40 | What type of audit opinion is given if the auditor is unable to obtain sufficient appropriate audit evidence ... | what-type-of-audit-report-is-given-if-the-auditors-ability-to-find-sufficient-appropriate-audit-evidence-is-pervasive |
What type of audit opinion is given if the auditor is unable to obtain sufficient appropriate audit evidence and undetected misstatements could be pervasive?Answer: Disclaimer of opinion |
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| 2012-10-13 18:05:47 | What type of audit opinion is given if the financial statements contain a non-material misstatement? | what-type-of-audit-report-is-given-if-the-fs-contain-a-non-material-misstatement |
What type of audit opinion is given if the financial statements contain a non-material misstatement?Answer: An unmodified opinion. An audit opinion can only be modified in respect of a matter that is material to the financial statements. |
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| 2012-10-13 18:06:52 | Under the UK Corporate Governance Code listed companies are required to have an internal audit department. | is-the-following-true-or-false-under-the-uk-government-code-listed-companies | Under the UK Corporate Governance Code listed companies are required to have an internal audit department. Is this statement true or false? Answer: False. Internal audit is encouraged and the need for it has to be kept under review, but it is not mandatory. | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-13 18:07:24 | In a listed company, to whom should internal audit report? | in-a-listed-company-to-whom-should-internal-audit-report |
In a listed company, to whom should internal audit report?Answer: To Those Charged with Governance - i.e. the audit committee. |
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| 2012-10-13 18:08:09 | What are the three elements of the ACCA’s conceptual framework approach to independence? | what-are-the-three-elements-of-the-accas-ethical-framework |
What are the three elements of the ACCA’s conceptual framework approach to independence?Answer: Identify threats to compliance with the fundamental principles. Evaluated the significance of the threats identified. Apply safeguards, when necessary, to eliminate the threats or reduce them to an acceptable level. |
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| 2012-10-13 18:11:44 | What category of ethical threat may be created if fees from an audit client remain overdue? | what-sort-of-ethical-threat-can-arise-from-overdue-fees |
What category of ethical threat may be created if fees from an audit client remain overdue?Answer: A self-interest threat because overdue fees may be regarded as equivalent to a loan (i.e. a direct financial interest). |
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| 2012-10-13 18:12:17 | What category of threat arises if the auditor prepares the financial statements for an audit client? | what-sort-of-ethical-threat-arises-from-the-auditor-auditing-financial-statements-that-the-auditor-also-prepared |
What category of threat arises if the auditor prepares the financial statements for an audit client?Answer: A self-review threat. |
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| 2012-10-13 18:12:47 | What category of threat arises if the auditor owns shares in a client company? | what-sort-of-ethical-threat-arises-from-the-auditor-owning-shares-in-the-company-audited |
What category of threat arises if the auditor owns shares in a client company?Answer: A self-interest threat because the auditor would have a direct financial interest. |
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| 2012-10-13 18:13:15 | What category of threat arises if the auditor is a close friend of the financial director of the client company? | what-sort-of-ethical-threat-arises-from-the-auditor-being-a-close-friend-of-the-financial-director-of-the-company-being-audited |
What category of threat arises if the auditor is a close friend of the financial director of the client company?Answer: A familiarity threat |
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| 2012-10-13 18:15:00 | What categories of threat may be created if a firm assumes management responsibility for an audit client? | an-auditor-gives-weekly-advice-to-a-client-on-a-wide-range-of-matters-financial-and-non-financial-what-sort-of-threat-can-this-give-rise-to |
What categories of threat may be created if a firm assumes management responsibility for an audit client?Answer: Self-review threat - for example, in taking responsibility for the financial statements or the design of internal controls. Self-interest threat - for example, in the fees for providing non-audit services. Familiarity threat - because the firm becomes too closely aligned with management's views and interest. Note: "Management threat" is not a classification in the Code. |
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| 2012-10-13 18:15:32 | What is ‘audit risk’? | what-is-meant-by-audit-risk |
What is ‘audit risk’?Answer: Audit risk is the risk that an inappropriate audit opinion is given. |
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| 2012-10-13 18:16:17 | Analytical procedures MUST be used at which stages of an audit? | analytical-procedures-are-used-at-three-stages-of-an-audit-what-are-these |
Analytical procedures MUST be used at which stages of an audit?Answer: Analytical procedures must be used at the planning and final review stages. Substantive analytical procedures to obtain audit evidence are not a requirement. |
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| 2012-10-13 18:17:05 | What percentage benchmarks are often applied as a starting point in determining materiality? | what-range-of-percentage-of-profit-is-often-taken-as-guidance-for-materiality |
What percentage benchmarks are often applied as a starting point in determining materiality?Answer: < ½% is not material - > 1% of revenue is material < 1% is not material - > 2% of total assets is material < 5% is not material – > 10% of profit before tax is material Between these thresholds requires the exercise of professional judgment. |
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| 2012-10-13 18:17:43 | Why is it important that audits are properly documented? (Four reasons) | why-is-it-important-that-audits-are-properly-documented-four-reasons |
Why is it important that audits are properly documented? (Four reasons)Answer: To show that the audit work has been done properly To enable senior staff to review the work of junior staff To help the audit team in future years To encourage a methodical, high-quality approach. |
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| 2012-10-13 18:18:48 | What factors affect the reliability of audit evidence? | which-of-the-following-pairs-of-evidence-are-better |
What factors affect the reliability of audit evidence?
Answer:
The
reliability
of audit evidence is influenced by its source and nature. Generally, reliability is increased when audit evidence is:
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| 2012-10-15 14:56:24 | Define what is meant by an ‘organisation’ | define-what-is-meant-by-an-organisation |
Define what is meant by an ‘organisation’Answer: An organisation is a social arrangement which pursues collective goals, which controls its own performance and which has a boundary separating it from its environment. |
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| 2012-10-15 15:27:04 | What separates an organisation from its environment? | what-separates-an-organisation-from-its-environment |
What separates an organisation from its environment?Answer: A boundary |
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| 2012-10-15 15:27:45 | What is the name of a system which receives no inputs from, or sends no outputs to, its environment? | what-is-the-name-of-a-system-which-receives-no-inputs-from-or-sends-no-outputs-to-its-environment |
What is the name of a system which receives no inputs from, or sends no outputs to, its environment?Answer: A closed system |
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| 2012-10-15 15:28:33 | What is the name of a system which receives inputs from and sends outputs to its environment? | what-is-the-name-of-a-system-which-receives-inputs |
What is the name of a system which receives inputs from and sends outputs to its environment?Answer: An open system |
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| 2012-10-16 08:52:41 | Are not-for-profit organisations public sector organisations? | are-not-for-profit-organisations-public-sector-organisations |
Are not-for-profit organisations public sector organisations?Answer: Not necessarily. Most public sector organisations (government owned) are not-for-profit, but the not-for –profit sector also includes organisations such as charities. |
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| 2012-10-16 08:53:29 | What is an entrepreneurial business structure? | what-is-an-entrepreneurial-business-structure |
What is an entrepreneurial business structure?Answer: A simple organisation with essentially just the boss and the workers. |
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| 2012-10-16 08:54:40 | What is a functional business structure? | what-is-a-functional-business-structure |
What is a functional business structure?Answer: The business is organised by function: sales, manufacturing, accounting, IT etc. Each function is a separate department with a departmental head. |
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| 2012-10-16 08:55:17 | What is a matrix structure? | what-is-a-matrix-structure |
What is a matrix structure?Answer: A structure that can, for example, be organised by project and function. Thus a person can report to his/her functional manager and project manager. |
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| 2012-10-16 08:56:14 | What are the five parts of Mintzberg’s diagrams of organisational structures? | what-are-the-five-parts-of-mintzbergs-diagrams-of-organisational-structures |
What are the five parts of Mintzberg’s diagrams of organisational structures?Answer: Strategic apex, middle line, technostructure, support, operating core. |
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| 2012-10-16 08:56:44 | What are these three layers? | what-are-these-three-layers |
Organisations are often divided into three layers, each layer having different responsibilities and planning horizons. What are these three layers?Answer: Strategic, tactical, operational. |
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| 2012-10-16 08:58:01 | Describe a tall narrow structure in terms of management layers and span of control. | describe-a-tall-narrow-structure-in-terms-of-management-layers-and-span-of-control |
Describe a tall narrow structure in terms of management layers and span of control.Answer: Many management layers and small spans of control. |
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| 2012-10-16 08:59:09 | Describe a wide flat structure in terms of management layers and span of control. | describe-a-wide-flat-structure-in-terms-of-management-layers-and-span-of-control |
Describe a wide flat structure in terms of management layers and span of control.Answer: Relatively few management layers each with relatively wide spans of control. |
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| 2012-10-16 09:00:00 | Name five advantages to decentralisation. | name-five-advantages-to-decentralisation |
Name five advantages to decentralisation.Answer: Motivation, spreading decision-making load and leaving more time ofr top managers to make the important decisions, faster decisions, local decisions, greater expertise of the decision maker, training and assessment. |
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| 2012-10-16 09:00:30 | What is the ‘formal organisation’? | what-is-the-formal-organisation |
What is the ‘formal organisation’?Answer: It is the part of the organisation that has been designed by management and which management knows about: organisation charts, procedures manuals, mission statements, plans, staff appraisals. |
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| 2012-10-16 09:02:02 | What is the ‘informal organisation’? | what-is-the-informal-organisation |
What is the ‘informal organisation’?Answer: It is the part of the organisation that has not been designed by management and which management might not know about: friendships, likes/dislikes, personal ambitions, alliances, short-cuts, cover-ups. |
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| 2012-10-16 09:02:44 | It is sometimes said that information should comply with the acronym ‘ACCURATE’. | it-is-sometimes-said-that-information-should-comply-with-the-acronym-accurate |
It is sometimes said that information should comply with the acronym ‘ACCURATE’. What, typically, do these letters stand for?Answer: * A ccurate * C omplete * C ost-beneficial * U nderstandable/user-targeted * R elevant * A daptable/authoritative * T imely, * E asy to use. |
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| 2012-10-16 09:05:26 | What is a transaction processing system (TPS)? | what-is-a-transaction-processing-system-tps |
What is a transaction processing system (TPS)?Answer: A TPS processes transactions such as sales, wages and salaries. It is essentially just automation of what had been done by armies of accountants. There is nothing very clever about a TPS, but it removes a lot of repetitive manual calculation and processing, speeds up processing, increases accuracy and saves costs. |
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| 2012-10-16 09:07:02 | What is a management information system (MIS)? | what-is-a-management-information-system-mis |
What is a management information system (MIS)?Answer: A MIS produces information which is useful for management for making decisions. For example, aged receivables listings and slow-moving inventory reports. |
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| 2012-10-16 09:07:45 | What is a decision support system (DSS)? | what-is-a-decision-support-system-dss |
What is a decision support system (DSS)?Answer: A DSS helps and supports people making decisions. For example there is no right or wrong way of deciding what next year’s budget should be: it’s a process which depends on judgment and experience. However, a spreadsheet where you set up a budget is going to be extremely useful in helping you reach a conclusion about what next year’s budget should be. |
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| 2012-10-16 09:08:13 | What is an executive information system (EIS)? | what-is-an-executive-information-system-eis |
What is an executive information system (EIS)?Answer: These provide information to top management. Typically and EIS has access to external information, will allow ‘drilling down’ to more detail, will be flexible and will make use of graphics, such as bar charts. |
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| 2012-10-16 09:08:46 | Describe a LAN | describe-a-lan |
Describe a LAN.Answer: A LAN is a local area network using specially installed cables to join computers together and with peripheral devices such as printers. |
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| 2012-10-16 09:10:46 | Describe a WAN | describe-a-wan |
Describe a WANAnswer: A WAN is a wide area network making use of telecommunication systems to network individual computers and local area networks over a wide geographical area. |
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| 2012-10-16 09:11:47 | What is an extranet? | what-is-an-extranet |
What is an extranet?Answer: An extranet is where one organisation’s computer network has access to another organisation’s network. |
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| 2012-10-16 09:12:10 | What is an intranet? | what-is-an-intranet |
What is an intranet?Answer: An intranet is an internal internet. Similar to a LAN, but access is through an internet browser. |
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| 2012-10-16 09:12:40 | What management level would you expect to deal with | what-management-level-would-you-expect-to-deal-with |
What management level would you expect to deal with information that is often forward-looking, often external and often highly summarised?Answer: This information would typically be used by the strategic level of management |
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| 2012-10-16 10:21:52 | What organisational level would you expect to deal with information that is historical, internal and detailed? | what-organisational-level-would-you-expect-to-deal-with-information-that-is-historical-internal-and-detailed |
What organisational level would you expect to deal with information that is historical, internal and detailed?Answer: This information is typically used at the operational level. |
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| 2012-10-16 10:34:59 | What does PESTEL stand for? | what-does-pestel-stand-for |
What does PESTEL stand for?Answer: Environmental influences: * Political * Economic * Social * Technological * Ecological * Legal |
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| 2012-10-16 10:35:59 | What are Porter’s five forces? | what-are-porters-five-forces |
What are Porter’s five forces?Answer: * Rivalry/competition, * Threat of new entrants, * Supplier pressure, * Buyer pressure, * Threat of substitutes. |
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| 2012-10-16 10:37:12 | Should Porter’s five forces theory be applied to all companies in the country | should-porters-five-forces-theory-be-applied-to-all-companies-in-the-country-an-industry-an-individual-company |
Should Porter’s five forces theory be applied to all companies in the country, an industry, an individual company?Answer: Porter’s five forces should be applied to an industry to judge industry attractiveness. |
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| 2012-10-16 10:38:21 | What are the seven elements of the cultural web? | what-are-the-seven-elements-of-the-cultural-web |
What are the seven elements of the cultural web?Answer: Symbols and titles, Power relations, Organisational structure, Control systems, Rituals and routines, Myths and stories, Organisational assumption (paradigm). |
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| 2012-10-16 10:38:52 | What are Charles Handy’s four cultural types? | what-are-charles-handys-four-cultural-types |
What are Charles Handy’s four cultural types?Answer: * Power (Zeus) * Role (Apollo) * Task (Athena) * Person (Dionysus) |
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| 2012-10-16 10:39:19 | What are Schein’s three levels of culture? | what-are-scheins-three-levels-of-culture |
What are Schein’s three levels of culture?Answer: * Artifacts (visual, structure, processes) * Espoused values (strategies goals philosophies) * Basic underlying assumptions |
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| 2012-10-16 10:39:46 | What are Hofstede’s four dimensions of national culture? | what-are-hofstedes-four-dimensions-of-national-culture |
What are Hofstede’s four dimensions of national culture?Answer: * Power distance * Uncertainty avoidance * Individualism-collectivism * Masculinity |
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| 2012-10-16 10:40:27 | What is a stakeholder? | what-is-a-stakeholder |
What is a stakeholder?Answer: Any person or other organisation affected by an organisation. |
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| 2012-10-16 10:41:02 | Into what three categories can stakeholders be divided | into-what-three-categories-can-stakeholders-be-divided |
Into what three categories can stakeholders be divided (not Mendelow’s classification)Answer: Internal (such as employees), connected (such as customers,) external such as local people. |
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| 2012-10-16 10:41:34 | What is meant by the ‘agency problem’ in corporate governance? | what-is-meant-by-the-agency-problem-in-corporate-governance |
What is meant by the ‘agency problem’ in corporate governance?Answer: Shareholders (the principals) own the company; directors (the agents) run the company on a day-to-day basis, and should run it for the benefit of the shareholders. But they might not, so checks need to be performed (like audits). |
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| 2012-10-16 10:41:59 | In Corporate Governance, what is a ‘NED’? | in-corporate-governance-what-is-a-ned |
In Corporate Governance, what is a ‘NED’?Answer: NED = Non-executive director. |
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| 2012-10-16 10:42:33 | Under Corporate Governance rules, which two roles should be split? | under-corporate-governance-rules-which-two-roles-should-be-split |
Under Corporate Governance rules, which two roles should be split?Answer: The roles of chief executive officer and chairman should be split. |
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| 2012-10-16 10:42:57 | Which board committee is responsible for suggesting new directors for appointment? | which-board-committee-is-responsible-for-suggesting-new-directors-for-appointment |
Which board committee is responsible for suggesting new directors for appointment?Answer: The Nomination Committee |
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| 2012-10-16 10:43:28 | Which board committee is responsible for advising on directors’ pay and bonuses etc | which-board-committee-is-responsible-for-advising-on-directors-pay-and-bonuses-etc |
Which board committee is responsible for advising on directors’ pay and bonuses etcAnswer: The Remuneration Committee |
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| 2012-10-16 10:43:56 | In Corporate Governance, what is meant by ‘comply or explain’? | in-corporate-governance-what-is-meant-by-comply-or-explain |
In Corporate Governance, what is meant by ‘comply or explain’?Answer: The UK Corporate Governance Code has no force in law and is enforced on listed companies through the Stock Exchange. Listed companies are expected comply with the code or explain to shareholders why they haven’t. |
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| 2012-10-16 10:44:30 | What is the name of the United States act that deals with Corporate Governance. | what-is-the-name-of-the-united-states-act-that-deals-with-corporate-governance |
What is the name of the United States act that deals with Corporate Governance.Answer: The Sarbanes Oxley Act. |
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| 2012-10-16 10:44:56 | What is corporate social responsibility? | what-is-corporate-social-responsibility |
What is corporate social responsibility?Answer: Corporate social responsibility considers the extent to which the interests of stakeholders (other than shareholders) should be taken into account over and above what the law demands. |
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| 2012-10-16 10:45:26 | List five influences on ethical behaviour: | list-five-influences-on-ethical-behaviour |
List five influences on ethical behaviour.Answer: * National and cultural beliefs * Education and employment * Psychological factors * Personal integrity * Moral imagination |
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| 2012-10-16 10:45:54 | What are the four ethical stances of Johnston and Scholes? | what-are-the-four-ethical-stances-of-johnston-and-scholes |
What are the four ethical stances of Johnston and Scholes?Answer: * Short-term shareholder interest * Long-term shareholder interest * Multiple stakeholder obligations * Shaper of society |
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| 2012-10-16 10:49:00 | What is IFAC? | what-is-ifac |
What is IFAC?Answer: IFAC = The International Federation of Accountants. IFAC is the global organisation of the accountancy profession. |
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| 2012-10-16 10:50:14 | What is the purpose of IFAC? | what-is-the-purpose-of-ifac |
What is the purpose of IFAC?Answer: IFAC aims to protect the public interest by encouraging high-quality practices by the world’s accountants. Through its independent standard-setting boards, IFAC develops international standards on ethics, auditing and assurance, education and public sector accounting standards. It issues guidance to support professional accountants in business, small and medium practices and developing nations. |
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| 2012-10-16 10:51:21 | What are the fundamental principals of the ACCA’s Code of Ethics and Conduct? | what-are-the-fundamental-principals-of-the-accas-code-of-ethics-and-conduct |
What are the fundamental principals of the ACCA’s Code of Ethics and Conduct?Answer: * Integrity * Objectivity * Professional competence and due care * Confidentiality * Professional behaviour |
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| 2012-10-16 10:55:30 | What are five differences between financial accounts and management accounts? | what-are-five-differences-between-financial-accounts-and-management-accounts |
What are five differences between financial accounts and management accounts?Answer:
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| 2012-10-16 10:56:24 | What is the UITF and what is its function? | what-is-the-uitf-and-what-is-its-function |
What is the UITF and what is its function?Answer: (Accountancy regulation) UITF = Urgent Issue Task Force. This is part of the Accounting Standards Board and tackles urgent issues not yet covered by accounting standards. |
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| 2012-10-16 11:35:43 | What is the FRRP and what is its function? | what-is-the-frrp-and-what-is-its-function |
What is the FRRP and what is its function?Answer: (Accountancy regulation) The Financial Reporting Review Panel (FRRP) is concerned with the examination and questioning of departures from accounting standards by large companies. |
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| 2012-10-16 11:39:22 | What body issues financial reporting standards? | what-body-issues-financial-reporting-standards |
What body issues financial reporting standards?Answer: The Accounting Standards Board issues financial reporting standards. |
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| 2012-10-16 11:40:08 | What is GAAP? | what-is-gaap |
What is GAAP?Answer: GAAP stands for Generally Accepted Accounting Principles. This is a common set of accounting principles, standards and procedures that companies use to compile their financial statements. |
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| 2012-10-16 11:40:45 | Who are responsible for preventing and detecting fraud? | who-are-responsible-for-preventing-and-detecting-fraud |
Who are responsible for preventing and detecting fraud?Answer: The directors are responsible for preventing and detecting fraud. Auditors should detect fraud if it is large enough to cause a material misstatement in the financial statements. |
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| 2012-10-16 11:41:26 | What are the two parts of an internal control system? | what-are-the-two-parts-of-an-internal-control-system |
What are the two parts of an internal control system?Answer: Control environment and detailed control processes. |
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| 2012-10-16 11:41:59 | What is meant by the internal control environment? | what-is-meant-by-the-internal-control-environment |
What is meant by the internal control environment?Answer: The control environment essentially refers to the culture within the organisation. Some organisations put a very high priority on having a good system of internal control in place whereas others see these as a nuisance. |
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| 2012-10-16 11:42:33 | Who are responsible for setting up the system of internal control? | who-are-responsible-for-setting-up-the-system-of-internal-control |
Who are responsible for setting up the system of internal control?Answer: The directors are responsible for setting up and maintaining the system of internal control |
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| 2012-10-16 11:43:53 | Who are responsible for preparing the financial statements? | who-are-responsible-for-preparing-the-financial-statements |
Who are responsible for preparing the financial statements?Answer: The directors are responsible for preparing the financial statements |
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| 2012-10-16 11:44:23 | What is ‘trait theory’? | what-is-trait-theory |
What is ‘trait theory’?Answer: The idea that management ability can be forecast through personal traits such as intelligence, initiative and self-assurance. |
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| 2012-10-16 11:45:47 | What are Henri Fayol’s five functions of management? | what-are-henri-fayols-five-functions-of-management |
What are Henri Fayol’s five functions of management (Classical Theory)?Answer: * Planning, * Organising, * Commanding, * Coordinating * Controlling. |
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| 2012-10-16 11:46:27 | Who is associated with scientific management? | who-is-associated-with-scientific-management |
Who is associated with scientific management?Answer: Frederick Taylor |
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| 2012-10-16 11:47:06 | What is the essence of scientific management? | what-is-the-essence-of-scientific-management |
What is the essence of scientific management?Answer: It is management’s function to study work and to develop a science of wotk so that jobs can be carried out efficiently. |
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| 2012-10-16 11:48:07 | What are the benefits and the main problem with scientific management? | what-are-the-benefits-and-the-main-problem-with-scientific-management |
What are the benefits and the main problem with scientific management?Answer: Benefits: increased productivity, wage allocation based on output, workforce care programmes. However, often dehumanises work. |
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| 2012-10-16 11:49:10 | Who was first associated with the Human Relations School of management? | who-was-first-associated-with-the-human-relations-school-of-management |
Who was first associated with the Human Relations School of management?Answer: Elton Mayo |
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| 2012-10-16 11:49:43 | What is the name of Mayo’s studies and what did these suggest? | what-is-the-name-of-mayos-studies-and-what-did-these-suggest |
What is the name of Mayo’s studies and what did these suggest?Answer: The Hawthorne studies: there is more to motivation than pay; people like groups; groups influence behaviour. |
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| 2012-10-16 11:50:18 | According to Drucker’s style theory, what are the three functions of management? | according-to-druckers-style-theory-what-are-the-three-functions-of-management |
According to Drucker’s style theory, what are the three functions of management?Answer: * Managing a business; * Managing managers; * Managing workers and work. |
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| 2012-10-16 11:53:47 | Drucker’s style theory proposed three functions of management | druckers-style-theory-proposed-three-functions-of-management |
Drucker’s style theory proposed three functions of management (managing a business; managing managers; managing workers and work). What five further categories are these broken down into?Answer: * Setting objectives, * Organising the group, * Motivating and communicating, * Measuring performance, * Developing people. |
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| 2012-10-16 11:54:37 | What are Mintzberg’s three managerial roles? | what-are-mintzbergs-three-managerial-roles |
What are Mintzberg’s three managerial roles?Answer: Interpersonal role; information processing role; decisional role. |
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| 2012-10-16 11:55:08 | Monitor, disseminator and spokesman are terms associated with which of Mintzberg’s managerial roles? | monitor-disseminator-and-spokesman-are-terms-associated-with-which-of-mintzbergs-managerial-roles |
Monitor, disseminator and spokesman are terms associated with which of Mintzberg’s managerial roles?Answer: Information processing role |
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| 2012-10-16 11:56:09 | Improver/changer, disturbance handler negotiator and resource allocator are terms associated with which of Mintzberg’s managerial roles? | improver-disturbance-are-terms-associated-with-which-of-mintzbergs-managerial-roles |
Improver/changer, disturbance handler negotiator and resource allocator are terms associated with which of Mintzberg’s managerial roles?Answer: Decisional role |
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| 2012-10-16 11:56:27 | Define ‘power’ | define-power |
Define ‘power’Answer: Power is the ability to influence events or people |
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| 2012-10-16 11:56:55 | Define ‘authority’ | define-authority |
Define ‘authority’Answer: Authority is the right to exercise power. |
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| 2012-10-16 11:57:14 | Define ‘delegation’ | define-delegation |
Define ‘delegation’Answer: Delegation is the transfer of authority. It is NOT the transfer of responsibility or accountability. |
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| 2012-10-16 11:57:37 | What are the four types of leadership style suggested by Ashridge Management College in descending order of autocracy. | what-are-the-four-types-of-leadership-style-suggested-by-ashridge-management-college-in-descending-order-of-autocracy |
What are the four types of leadership style suggested by Ashridge Management College in descending order of autocracy.Answer: Tells, sells, consults, joins. |
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| 2012-10-16 11:58:42 | Figurehead, liaison and leader are terms associated with which of Mintzberg’s managerial roles? | figurehead-liaison-and-leader-are-terms-associated-with-which-of-mintzbergs-managerial-roles |
Figurehead, liaison and leader are terms associated with which of Mintzberg’s managerial roles?Answer: Interpersonal role |
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| 2012-10-16 12:07:35 | What are the two axes of Blake and Mouton’s managerial grid? | what-are-the-two-axes-of-blake-and-moutons-managerial-grid |
What are the two axes of Blake and Mouton’s managerial grid?Answer: 1 Concern for the task 2 Concern for people |
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| 2012-10-16 14:27:15 | Describe the ‘country club’ style of management in terms of Blake and Mouton’s grid. | describe-the-country-club-style-of-management-in-terms-of-blake-and-moutons-grid |
Describe the ‘country club’ style of management in terms of Blake and Mouton’s grid.Answer: High concern for people; low concern for the task. |
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| 2012-10-16 14:27:45 | What are the three matters of concern in Adair’s action-centred leadership theory? | what-are-the-three-matters-of-concern-in-adairs-action-centred-leadership-theory |
What are the three matters of concern in Adair’s action-centred leadership theory?Answer: Concern for individuals, concern for the group, concern for the task. |
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| 2012-10-16 14:28:12 | What are the four variables in Handy’s best fit theory? | what-are-the-four-variables-in-handys-best-fit-theory |
What are the four variables in Handy’s best fit theory?Answer: The leader, the task, the subordinates and the environment. |
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| 2012-10-16 14:28:35 | What is meant by a ‘contingency theory’ of management/leadership? | what-is-meant-by-a-contingency-theory-of-managementleadership |
What is meant by a ‘contingency theory’ of management / leadership?Answer: There is no single best way to lead or manage; there is no set of golden rules. The best approach depends on the situation. |
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| 2012-10-16 14:29:00 | What is Handy’s best fit theory of leadership/management? | what-is-handys-best-fit-theory-of-leadershipmanagement |
What is Handy’s best fit theory of leadership / management?Answer: The variables of: the leader, the task, the subordinates and the environment all have to match. For example an authoritative manager in charge of subservient staff, doing a repetitive task to a strict timetable. |
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| 2012-10-16 14:29:26 | What is meant by the terms ‘transformational’ and ‘transactional’ leader? | what-is-meant-by-the-terms-transformational-and-transactional-leader |
What is meant by the terms ‘transformational’ and ‘transactional’ leader?Answer: Transactional: do things right; administer, maintains and a short-term view. Transformational: do the right things; inspire, long-term view, develops organisations. |
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| 2012-10-16 14:30:17 | Who talked about adaptive leadership and ‘moving between the balcony and the battlefield’? | who-talked-about-adaptive-leadership-and-moving-between-the-balcony-and-the-battlefield |
Who talked about adaptive leadership and ‘moving between the balcony and the battlefield’?Answer: Heifetz |
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| 2012-10-16 14:30:45 | Describe Fiedler’s approach to leadership | describe-fiedlers-approach-to-leadership |
Describe Fiedler’s approach to leadershipAnswer: Effectiveness depends on the leadership style (psychologically close or distant) and situational favourableness ie the degree to which the situation gives the leader control and influence. |
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| 2012-10-16 14:31:14 | What is Handy’s definition of a group and what did he suggest are a group’s four characteristics? | what-is-handys-definition-of-a-group-and-what-did-he-suggest-are-a-groups-four-characteristics |
What is Handy’s definition of a group and what did he suggest are a group’s four characteristics?Answer: A group is any collection of people who perceive themselves to be a group. Groups exhibit a sense of purpose or aim, identity, group norms and communication. |
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| 2012-10-16 14:32:19 | What are the eight (or nine) team roles identified by Meredith Belbin? | what-are-the-eight-or-nine-team-roles-identified-by-meredith-belbin |
What are the eight (or nine) team roles identified by Meredith Belbin?Answer: Chairman, Shaper, Monitor/evaluator, Company worker, Resource investigator, Team worker, Plant, Completer/finisher and, sometimes, specialist. |
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| 2012-10-16 14:32:46 | What are Tuckman’s four (or five) stages of team development in time-order? | what-are-tuckmans-four-or-five-stages-of-team-development-in-time-order |
What are Tuckman’s four (or five) stages of team development in time-order?Answer: Forming, storming, norming, performing and (perhaps) dorming. |
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| 2012-10-16 14:33:14 | What are the two classes of motivation theory? | what-are-the-two-classes-of-motivation-theory |
What are the two classes of motivation theory?Answer: Content theory and process theory. |
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| 2012-10-16 14:33:43 | What are the five levels of need in Maslow’s hierarchy (ascending order)? | what-are-the-five-levels-of-need-in-maslows-hierarchy-ascending-order |
What are the five levels of need in Maslow’s hierarchy (ascending order)?Answer: Physiological, safety, social, esteem (or ego), self-actualisation (or self-fulfilment) needs. |
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| 2012-10-16 14:34:09 | What are the two classes of factor in Herzberg’s theory of motivation? | what-are-the-two-classes-of-factor-in-herzbergs-theory-of-motivation |
What are the two classes of factor in Herzberg’s theory of motivation?Answer: Hygiene factors and motivating factors. |
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| 2012-10-16 14:34:38 | What is the consequent of poor hygiene factors in Herzberg’s theory of motivation? | what-is-the-consequent-of-poor-hygiene-factors-in-herzbergs-theory-of-motivation |
What is the consequent of poor hygiene factors in Herzberg’s theory of motivation?Answer: Poor hygiene = job dissatisfaction. No motivation can occur in this state. |
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| 2012-10-16 14:35:11 | Describe Vroom’s expectancy theory | describe-vrooms-expectancy-theory |
Describe Vroom’s expectancy theoryAnswer: Motivating force = Valence x Expectation Valence is how much someone wants something (like a bonus or promotion). Expectation is an assessment of the likelihood of success. |
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| 2012-10-16 14:35:37 | What is McGregor’s theory of motivation | what-is-mcgregors-theory-of-motivation |
What is McGregor’s theory of motivationAnswer: Theory X and Theory Y. A theory X manager is autocratic and this might motivate subservient workers. A theory Y manager is participative and this might motivate workers with better training and knowledge. |
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| 2012-10-16 14:36:09 | Describe ‘intrinsic’ and ‘extrinsic’ rewards. | describe-intrinsic-and-extrinsic-rewards |
Describe ‘intrinsic’ and ‘extrinsic’ rewards.Answer: An intrinsic reward comes from within; for example, a feeling of achievement or personal advancement. Extrinsic rewards come from outside; for example additional pay or praise. |
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| 2012-10-16 14:36:36 | What are the three methods of job design? | what-are-the-three-methods-of-job-design |
What are the three methods of job design?Answer: Job enlargement, job rotation, job enrichment. |
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| 2012-10-16 14:37:44 | Describe job enlargement, job rotation and job enrichment. | 16859 |
Describe job enlargement, job rotation and job enrichment.Answer: Job enlargement means more of almost exactly the same. It is certainly what will be called a horizontal change; there is no more challenge or responsibility in the job. Job rotation is also a horizontal change with no real increase in challenge. Job enrichment is a vertical change. It’s giving people more responsibility and more challenge in their job. |
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| 2012-10-16 14:38:40 | What are coaching mentoring and counselling? | what-are-coaching-mentoring-and-counselling |
What are coaching mentoring and counselling?Answer: Coaching = being guided by a more experienced employee. Mentor = a long term relationship who can give impartial advice (not your manager), Counselling = non-directive exploration of issues and concerns. |
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| 2012-10-16 14:39:07 | What are the typical steps in a communication process? | what-are-the-typical-steps-in-a-communication-process |
What are the typical steps in a communication process?Answer: Form the thought, encode, transmit, receive decode and give feedback. |
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| 2012-10-16 14:39:36 | What are the three directions in which communication can take place? | what-are-the-three-directions-in-which-communication-can-take-place |
What are the three directions in which communication can take place?Answer: Horizontal, vertical and diagonal. |
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| 2012-10-16 14:40:06 | Name seven potential barriers to communication. | name-seven-potential-barriers-to-communication |
Name seven potential barriers to communication.Answer: Any seven from: * Inappropriate language/terminology, * Status, * Emotion, * Wrong medium, * Not wanting to transmit, * Not wanting to receive, * Information overload, * Noise/interference. |
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| 2012-10-16 14:43:38 | What are the four patterns of communication identified by Leavitt? | what-are-the-four-patterns-of-communication-identified-by-leavitt |
What are the four patterns of communication identified by Leavitt?Answer: Y, wheel, circle, chain. |
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| 2012-10-16 14:44:04 | Which of the chain or wheel provides faster communication? | which-of-the-chain-or-wheel-provides-faster-communication |
Which of the chain or wheel provides faster communication?Answer: The wheel is faster because it provides a central node through which communication can be quickly routed. |
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| 2012-10-16 14:44:33 | What are the elements of Rogers seven-point selection plan (person specification/BADPIGS) | what-are-the-elements-of-rogers-seven-point-selection-plan-person-specificationbadpigs |
What are the elements of Rogers seven-point selection plan (person specification/BADPIGS)Answer: Background, achievements, disposition, physical, interests, general intelligence, special aptitudes. |
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| 2012-10-16 14:45:40 | Name five selection methods | name-five-selection-methods |
Name five selection methodsAnswer: * Interviews * Selection tests, * References, * Work-sampling, * Group-selection methods. |
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| 2012-10-16 14:46:39 | Name four types of selection test. | name-four-types-of-selection-test |
Name four types of selection test.Answer: * Psychometric, * Proficiency, * Intelligence, * Aptitude. |
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| 2012-10-16 14:47:41 | Describe training, development and education. | describe-training-development-and-education |
Describe training, development and educationAnswer: Training is very specific and is needed for your current role. Development is much less specific; it’s needed at some time in the future. Education is knowledge acquired gradually through learning and instruction. It might or might not be work-related. |
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| 2012-10-16 17:14:43 | What are Honey and Mumford’s four learner types? | what-are-honey-and-mumfords-four-learner-types |
What are Honey and Mumford’s four learner types?Answer: Theorists: like to understand. Reflectors: observe and consider. Activists: hands-on learners. Pragmatists: motivated to learn if they perceive a practical use. |
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| 2012-10-16 17:15:17 | What are the four steps of Kolb’s experiential learning theory? | what-are-the-four-steps-of-kolbs-experiential-learning-theory |
What are the four steps of Kolb’s experiential learning theory?Answer: Experience, then reflect, then form a theory, then try the theory. Hence back round to experience and the cycle is repeated. |
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| 2012-10-16 17:15:43 | What three elements or purposes are present in most reviews? | what-three-elements-or-purposes-are-present-in-most-reviews |
What three elements or purposes are present in most reviews?Answer: Assess past performance. Plan future potential and roles. Fix rewards. |
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| 2012-10-16 17:16:20 | In the EU, what is the difference between a regulation and a directive? | in-the-eu-what-is-the-difference-between-a-regulation-and-a-directive |
In the EU, what is the difference between a regulation and a directive?Answer: Regulations are directly applicable to all member states. Directives have to be implemented by changing each country’s national laws. |
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| 2012-10-16 17:19:20 | What are the employee’s duties under health and safety legislation? | what-are-the-employees-duties-under-health-and-safety-legislation |
What are the employee’s duties under health and safety legislation?Answer: They have to take reasonable care of themselves and others; They must allow the employer to carry out the duties in relation to safety; They mustn’t interfere intentionally or recklessly with machinery; They must inform the employer of any situation which they think is a danger; They have to use equipment properly, making use of all safety features. |
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| 2012-10-16 17:20:09 | What are the three classes of termination of employment? | what-are-the-three-classes-of-termination-of-employment |
What are the three classes of termination of employment?Answer: Retirement, resignation and dismissal. |
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| 2012-10-16 17:20:49 | What are the three types of dismissal? | what-are-the-three-types-of-dismissal |
What are the three types of dismissal?Answer: * Termination, * Non-renewal of a fixed-term contract, * Constructive dismissal. |
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| 2012-10-16 17:21:34 | List five reasons that might lead to fair dismissal. | list-five-reasons-that-might-lead-to-fair-dismissal |
List five reasons that might lead to fair dismissal.Answer: * Redundancy * Legal impediment * Non-capability * Misconduct * Other substantial reason |
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| 2012-10-16 17:23:29 | What three types of illegal behaviour does equal opportunity legislation recognise? | what-three-types-of-illegal-behaviour-does-equal-opportunity-legislation-recognise |
What three types of illegal behaviour does equal opportunity legislation recognise?Answer: Direct discrimination: eg salesman required. Indirect discrimination: eg sales person over 2m tall with a black beard required. Victimisation: This is where someone has complained about discrimination and then later on within the workplace they are blamed or discriminated against because they complained. |
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| 2012-10-16 17:24:50 | What are the five causes of inflation? | what-are-the-five-causes-of-inflation |
What are the five causes of inflation?Answer: * Demand pull * Cost push * Import cast factors * Expectations * Increase in the money supply |
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| 2012-10-16 17:25:22 | What are six types of unemployment? | 16896 |
What are six types of unemployment?Answer: * Real wage * Frictional * Seasonal * Structural * Technological * Cyclical |
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| 2012-10-16 17:25:56 | What is frictional unemployment? | what-is-frictional-unemployment |
What is frictional unemployment?Answer: People who are temporarily unemployed as they move jobs. |
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| 2012-10-16 17:26:24 | What is structural unemployment? | what-is-structural-unemployment |
What is structural unemployment?Answer: Changes in an industry’s structure. For example if manufacturing jobs move overseas, unemployment is caused by a change in the structure of the economy. |
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| 2012-10-16 17:27:14 | What are the three elements of a government’s fiscal policy? | what-are-the-three-elements-of-a-governments-fiscal-policy |
What are the three elements of a government’s fiscal policy?Answer: * Expenditure, * Income * Borrowing. |
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| 2012-10-16 17:27:50 | What causes a deficit? | what-causes-a-deficit |
What causes a deficit?Answer: Government expenditure is higher than income receipts (usually tax receipts) so that the government has to borrow. |
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| 2012-10-16 17:28:17 | What are the four ways in which monetary policy can be managed? | what-are-the-four-ways-in-which-monetary-policy-can-be-managed |
What are the four ways in which monetary policy can be managed?Answer: Interest rates, money supply, reserve requirements, exchange rates. |
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| 2012-10-16 17:29:38 | Describe regressive tax. | describe-regressive-tax |
Describe regressive tax.Answer: A regressive tax takes a higher proportion of a poor person’s salary than it does for a rich person. A simple example is VAT. If the VAT rate is 20% proportionally more taken from a poor person’s pay than from a rich person’s. |
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| 2012-10-16 17:30:23 | Describe proportional tax. | describe-proportional-tax |
Describe proportional tax.Answer: A proportional tax takes exactly the same proportion of income tax from all levels of income. |
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| 2012-10-16 17:32:11 | Describe what is meant by a direct and an indirect tax | describe-what-is-meant-by-a-direct-and-an-indirect-tax |
Describe what is meant by a direct and an indirect tax.Answer: A direct tax is paid direct by a person to the revenue authority (eg income tax). An indirect tax is paid to the revenue authority by an intermediary (for example, a supplier charges VAT and pays this over). |
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| 2012-10-16 17:32:40 | What is the difference between the balance of trade and the current account. | what-is-the-difference-between-the-balance-of-trade-and-the-current-account |
What is the difference between the balance of trade and the current account.Answer: The balance of trade is the inflows and outflows from the trade in goods. The current account includes the balance of trade but also income from overseas investments and transfers such as those to and from the EU. |
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| 2012-10-16 17:33:43 | Describe progressive taxes | describe-progressive-taxes |
Describe progressive tax.Answer: A progressive tax takes a higher proportion of income as income rises. So maybe for the first $1,000 of income the tax rate is zero, for the next $4,000 of income the tax rate is 20%, and anything beyond that is taxed at say 40%. |
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| 2012-10-16 18:01:53 | Draw and annotate Mendelow’s Matrix | draw-and-annotate-mendelows-matrix |
Draw and annotate Mendelow’s MatrixAnswer: |
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| 2012-10-18 11:59:48 | What are the three main steps in the rational planning model? | what-are-the-three-main-steps-in-the-rational-planning-model |
What are the three main steps in the rational planning model?Answer: Strategic position, Strategic choice, Implementation (or strategy into action) |
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| 2012-10-18 12:07:20 | What is meant by logical incrementalism? | what-is-meant-by-logical-incrementalism |
What is meant by logical incrementalism?Answer: The idea that planning is best done as a series of relatively small adjustments to past strategies rather than trying to plan radical leaps forward. |
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| 2012-10-18 12:08:42 | Why do advocates of logical incrementalism think that is a better approach | 16934 |
Why do advocates of logical incrementalism think that is a better approach than more radical planning?Answer: Bounded rationality: we do not know (and cannot know) everything that is important to future plans so what is the point in making ambitious plans that rest on guesswork? Additionally, managers do not have time to carefully evaluate all possible combinations of events. |
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| 2012-10-18 12:09:41 | What is freewheeling opportunism? | what-is-freewheeling-opportunism |
What is freewheeling opportunism?Answer: The idea that planning can be inhibiting and that you are better grabbing opportunities as they arise. |
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| 2012-10-18 12:11:29 | List five advantages of strategic planning | list-five-advantages-of-strategic-planning |
List five advantages of strategic planningAnswer: Any five of: * It forces you to look ahead * Better coordination * Better use of resources * Targets to which all can work * An opportunity to influence the future * Holds out the promise of better times in the future after initial hard work |
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| 2012-10-18 12:14:03 | What are two potential advantages of freewheeling opportunism? | what-are-two-potential-advantages-of-freewheeling-opportunism |
What are two potential advantages of freewheeling opportunism?Answer: Any two of: * fast decisions; * no time or money spent on planning; * not committed to one course of action (flexibility). |
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| 2012-10-18 12:15:05 | What is a PESTEL analysis? | what-is-a-pestel-analysis |
What is a PESTEL analysis?Answer: An environmental analysis considering the influences of: politics, economics, social trends, technological changes, ecological (environmental) concerns, laws. |
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| 2012-10-18 12:16:12 | What are Porter’s five forces? | what-are-porters-five-forces-2 |
What are Porter’s five forces?Answer: * Rivalry/competition, * Threat of new entrants, * Supplier pressure, * Buyer pressure, * Threat of substitutes. |
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| 2012-10-18 12:18:03 | Should Porter’s five forces theory be applied to all companies in the country, an industry, an individual company? | should-porters-five-forces-theory-be-applied-to-all-companies-in-the-country-an-industry-an-individual-company-2 |
Should Porter’s five forces theory be applied to all companies in the country, an industry, an individual company?Answer: Porter’s five forces should be applied to an industry to judge industry attractiveness. |
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| 2012-10-18 12:19:17 | An organisation’s capabilities arise from two sources. What are these? | an-organisations-capabilities-arise-from-two-sources-what-are-these |
An organisation’s capabilities arise from two sources. What are these?Answer: Resources and competences (how resources are used). |
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| 2012-10-18 12:20:13 | What is a threshold capability? | what-is-a-threshold-capability |
What is a threshold capability?Answer: The capability that just allows you to survive. It implies threshold resources and threshold competences. |
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| 2012-10-18 12:20:42 | What is needed for capabilities that give sustained competitive advantage? | what-is-needed-for-capabilities-that-give-sustained-competitive-advantage |
What is needed for capabilities that give sustained competitive advantage?Answer: Unique resources and/or core competences. These allow you to continually out-perform your rivals. |
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| 2012-10-18 12:21:18 | What is meant by the terms ‘position-based’ and ‘resource-based’ strategic planning? | what-is-meant-by-the-terms-position-based-and-resource-based-strategic-planning |
What is meant by the terms ‘position-based’ and ‘resource-based’ strategic planning?Answer: Position-based: alter your position to match the environment. Resource-based: look at your resources and competences and see if they can be redeployed in ways that will give competitive advantage. |
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| 2012-10-18 12:23:17 | ‘M words’ are often used to describe resources. | 16947 |
‘M words’ are often used to describe resources. List nine.Answer: Any nine of: material, machinery/manufacturing, money, markets, marketing, management, men and women, MIS (IT), methods (knowhow), make (brand). |
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| 2012-10-18 12:24:36 | What is a mission statement and what are its main elements? | what-is-a-mission-statement-and-what-are-its-main-elements |
What is a mission statement and what are its main elements?Answer: The prime purpose of a mission statement is to set out the reason for the organisation’s existence. The main sections are often taken to be: purpose, position (in the market), culture, ethics and values. |
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| 2012-10-18 12:25:16 | What is a stakeholder? | what-is-a-stakeholder-2 |
What is a stakeholder?Answer: Any person or other organisation affected by an organisation. |
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| 2012-10-18 12:26:16 | Into what three categories can stakeholders be divided | 16950 |
Into what three categories can stakeholders be divided (not Mendelow’s classification)Answer: * Internal (such as employees), * Connected (such as customers,) * External (such as local people). |
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| 2012-10-18 12:27:04 | Why is stakeholder analysis important in strategic planning? | why-is-stakeholder-analysis-important-in-strategic-planning |
Why is stakeholder analysis important in strategic planning?Answer: Key player stakeholders can prevent strategies of which they do not approve. The hope is that any strategic plan keeps most of the people happy most of the time (and the key players happy all the time!) |
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| 2012-10-18 12:29:10 | What are the two axes on a Boston Consulting Grid? | what-are-the-two-axes-on-a-boston-consulting-grid |
What are the two axes on a Boston Consulting Grid?Answer: Market growth rate and relative market share (market share/share of market leader) |
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| 2012-10-18 12:29:58 | What are the four quadrants of a BCG matrix and what market share and growth rates do they have? | what-are-the-four-quadrants-of-a-bcg-matrix-and-what-market-share-and-growth-rates-do-they-have |
What are the four quadrants of a BCG matrix and what market share and growth rates do they have?Answer: Problem child (or question mark): high market growth rate, low market share. Star: high market growth rate, high market share. Cash cow: low market growth rate, high market share. Dog: low market growth rate, low market share. |
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| 2012-10-18 12:31:19 | What is the problem with a problem child product or division? | what-is-the-problem-with-a-problem-child-product-or-division |
What is the problem with a problem child product or division?Answer: BCG suggests that only companies with large market shares can survive in the long term so the company has to decide whether to withdraw or to invest to achieve a large market share. Note that niche or focus companies can survive with what looks like a small market share. |
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| 2012-10-18 12:36:10 | In BCG terms, what is meant by a balanced portfolio of products? | in-bcg-terms-what-is-meant-by-a-balanced-portfolio-of-products |
In BCG terms, what is meant by a balanced portfolio of products?Answer: Some cash cows to generate lots of cash (but cash cows are heading towards market decline), and some problem children needing investment. The cash generated by the cash cows can be used to build the problem children into star products that will become the cash cows of the future. |
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| 2012-10-18 12:36:53 | What are the primary activities of the value chain? | what-are-the-primary-activities-of-the-value-chain |
What are the primary activities of the value chain?Answer: Inbound logistics, Operations, Outbound logistics, Sales and marketing, Service. |
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| 2012-10-18 12:38:02 | What are the support activities of the value chain? | what-are-the-support-activities-of-the-value-chain |
What are the support activities of the value chain?Answer: Firm infrastructure, Human resource management, Technology development, Procurement |
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| 2012-10-18 12:39:17 | What are Porter’s three generic strategies? | what-are-porters-three-generic-strategies |
What are Porter’s three generic strategies?Answer: Cost leadership, Differentiation, Focus. |
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| 2012-10-18 12:40:41 | What are the axes of Ansoff’s matrix? | what-are-the-axes-of-ansoffs-matrix |
What are the axes of Ansoff’s matrix?Answer: Products (existing and current); markets (existing and current) |
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| 2012-10-18 12:41:16 | What can a company do to increase its profits if it stays with existing products and existing markets? | what-can-a-company-do-to-increase-its-profits-if-it-stays-with-existing-products-and-existing-markets |
What can a company do to increase its profits if it stays with existing products and existing markets?Answer: Market penetration, Efficiency gains, Withdrawal, Consolidation. |
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| 2012-10-18 12:42:09 | In Ansoff’s matrix, what is moving to a new market with an existing product known as | in-ansoffs-matrix-what-is-moving-to-a-new-market-with-an-existing-product-known-as |
In Ansoff’s matrix, what is moving to a new market with an existing product known as?Answer: Market development |
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| 2012-10-18 12:42:45 | In Ansoff’s matrix, what is selling a new product to an existing market known as? | in-ansoffs-matrix-what-is-selling-a-new-product-to-an-existing-market-known-as |
In Ansoff’s matrix, what is selling a new product to an existing market known as?Answer: Product development |
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| 2012-10-18 12:56:17 | What are the two classes of diversification? | what-are-the-two-classes-of-diversification |
What are the two classes of diversification?Answer: Related and unrelated diversification. |
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| 2012-10-18 12:57:49 | What is meant by the terms ‘backward integration’ and ‘forward integration’? | what-is-meant-by-the-terms-backward-integration-and-forward-integration |
What is meant by the terms ‘backward integration’ and ‘forward integration’?Answer: Backward integration is taking over (or setting up) a supplier; Forward integration is taking over (or setting up) a customer or supply chain. |
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| 2012-10-18 13:02:49 | What is the name of the business structure which is organised as accounting, manufacturing, sales, IT etc? | what-is-the-name-of-the-business-structure-which-is-organised-as-accounting-manufacturing-sales-it-etc |
What is the name of the business structure which is organised as accounting, manufacturing, sales, IT etc?Answer: This is a functional structure as it organises the business by function (or department). |
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| 2012-10-18 13:03:12 | What are the main ways in which a business can be divisionalised? | what-are-the-main-ways-in-which-a-business-can-be-divisionalised |
What are the main ways in which a business can be divisionalised?Answer: By market and by product |
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| 2012-10-18 13:03:43 | Describe what is meant by the term ‘matrix structure’? | describe-what-is-meant-by-the-term-matrix-structure |
Describe what is meant by the term ‘matrix structure’?Answer: In a matrix structure, each employee has responsibilities to more than one superior. Eg, in project management an engineer could be responsible to the project manager and to the engineering manager. |
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| 2012-10-18 13:04:03 | What are the five elements of Mintzberg’s organisation forms? | what-are-the-five-elements-of-mintzbergs-organisation-forms |
What are the five elements of Mintzberg’s organisation forms?Answer: Strategic apex, Middle line, Operating core, Support Technostructure. |
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| 2012-10-18 13:04:34 | What are the characteristics of a professional bureaucracy in terms of Mintzberg’s structures? | 16991 |
What are the characteristics of a professional bureaucracy in terms of Mintzberg’s structures?Answer: Relatively short middle line and a small technostructure. Because each job is different in a professional firm, there has to be close liaison between the strategic apex and the operating core and the technostructure has limited opportunity to enforce a standard approach. |
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| 2012-10-18 13:05:23 | What is a span of control and how does it differ between tall narrow and wide flat structures. | what-is-a-span-of-control-and-how-does-it-differ-between-tall-narrow-and-wide-flat-structures |
What is a span of control and how does it differ between tall narrow and wide flat structures.Answer: The span of control (SoC)l is the number of people directly reporting to a manager. In a tall narrow structure the SoC is low; in a wide flat structure the SoC is large. |
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| 2012-10-18 13:06:22 | What are the three levels or categories of business process change? | what-are-the-three-levels-or-categories-of-business-process-change |
What are the three levels or categories of business process change?Answer: * Automation, * Rationalisation * Business process engineering. |
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| 2012-10-18 13:07:12 | What are the four descriptions of change in terms of scope of change and nature of change? | hat-are-the-four-descriptions-of-change-in-terms-of-scope-of-change-and-nature-of-change |
What are the four descriptions of change in terms of scope of change and nature of change?Answer: Adaptation (nature = incremental and scope = realignment) Evolution (nature = incremental and scope = transformation) Reconstruction (nature = big bang and scope = realignment) Revolution (nature = big bang and scope = transformation) |
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| 2012-10-18 13:44:49 | What are four business process redesign patterns? | what-are-four-business-process-redesign-patterns |
What are four business process redesign patterns?Answer: Re-engineering – zero-based Simplification – eliminate duplication and redundant steps Value-added analysis – remove non-value adding activities Gaps and disconnects – check flows between departments |
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| 2012-10-18 13:45:52 | What are the two axes of Harmon’s process–strategy matrix? | what-are-the-two-axes-of-harmons-process-strategy-matrix |
What are the two axes of Harmon’s process–strategy matrix?Answer: The process’s strategic importance and its complexity/dynamism |
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| 2012-10-18 13:46:44 | In terms of a process’s strategic importance and complexity/dynamism how, should a process be carried out according to Harmon’s process strategy matrix? | in-terms-of-a-processs-strategic-importance-and-complexitydynamism-how-should-a-process-be-carried-out-according-to-harmons-process-strategy-matrix |
In terms of a process’s strategic importance and complexity/dynamism how, should a process be carried out according to Harmon’s process strategy matrix?Answer: High strategic importance, highly complex/dynamic: BPR and improvement High strategic importance, low complexity/stable: automate Low strategic importance, low complexity/stable: automate, outsource Low strategic importance, high complexity/dynamic: outsource |
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| 2012-10-18 13:47:18 | What are the contextual features in Balogun and Hope Hailey’s theory of change management? | what-are-the-contextual-features-in-balogun-and-hope-haileys-theory-of-change-management |
What are the contextual features in Balogun and Hope Hailey’s theory of change management?Answer: Power, Time, Scope, Diversity, Capability, Capacity, Readiness, Preservation |
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| 2012-10-18 13:48:14 | What are the design choices in Balogun and Hope Hailey’s theory of change management? | what-are-the-design-choices-in-balogun-and-hope-haileys-theory-of-change-management |
What are the design choices in Balogun and Hope Hailey’s theory of change management?Answer: Change path Change start point Change style Change interventions Change roles |
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| 2012-10-18 13:48:47 | What is Lewin’s force field analysis of change management? | what-is-lewins-force-field-analysis-of-change-management |
What is Lewin’s force field analysis of change management?Answer: Forces for change are likely to be opposed by forces resisting change. Better to weaken the resistance than to confront it head-on. |
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| 2012-10-18 13:49:29 | What are the steps in Lewin’s three step approach to change management? | what-are-the-steps-in-lewins-three-step-approach-to-change-management |
What are the steps in Lewin’s three step approach to change management?Answer: * Unfreeze * Effect the changes * Refreeze |
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| 2012-10-18 13:50:24 | A change agent is often a consultant. What are the advantages of hiring such a consultant? | 17017 |
A change agent is often a consultant. What are the advantages of hiring such a consultant?Answer: * Often a change agent is a consultant because: * Skilled in the change process * Knowledge/expertise in the types of change needed * Perceived as independent and fair * Someone for management to transfer risk to. |
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| 2012-10-18 13:51:09 | What are the original 4Ps of the marketing mix? | 17018 |
What are the original 4Ps of the marketing mix?Answer: * Product, * Price, * Promotion, * Place |
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| 2012-10-18 13:52:33 | What additional 3Ps were added to the original 4P marketing mix to cover the marketing of services? | what-additional-3ps-were-added-to-the-original-4p-marketing-mix-to-cover-the-marketing-of-services |
What additional 3Ps were added to the original 4P marketing mix to cover the marketing of services?Answer: * People * Physical evidence * Process |
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| 2012-10-18 13:53:40 | Name four types of activity that come under the heading of promotion? | name-four-types-of-activity-that-come-under-the-heading-of-promotion |
Name four types of activity that come under the heading of promotion?Answer: * Advertising * Sales promotion * Personal selling * Public relations |
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| 2012-10-18 13:55:01 | What is market targeting? | what-is-market-targeting |
What is market targeting?Answer: Deciding which segments of a market to address with products or services. |
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| 2012-10-18 13:55:33 | What are the three types of market targeting? | what-are-the-three-types-of-market-targeting |
What are the three types of market targeting?Answer: * Undifferentiated, * Differentiated, * Concentrated. |
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| 2012-10-18 13:56:24 | What are the 6Is of e-business? | what-are-the-6is-of-e-business |
What are the 6Is of e-business?Answer: * Intelligence * Individualisation * Interactivity * Integration * Industry (structure) * Independence (of location) |
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| 2012-10-18 14:01:08 | What are the potential barriers to e-business? | what-are-the-potential-barriers-to-e-business |
What are the potential barriers to e-business?Answer: Set-up costs Type of business Running costs Time to set up system No in-house skills Suppliers/customers not interested Security worries |
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| 2012-10-18 14:01:35 | What are the seven elements of the cultural web? | what-are-the-seven-elements-of-the-cultural-web-2 |
What are the seven elements of the cultural web?Answer: * Symbols and titles * Power relations * Organisational structure * Control systems * Rituals and routines * Myths and stories * Organisational assumptions (paradigm) |
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| 2012-10-18 14:02:37 | What are Handy’s four cultural types? | what-are-handys-four-cultural-types |
What are Handy’s four cultural types?Answer: * Power * Role * Task * Person |
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| 2012-10-18 14:03:03 | What are four potential benefits of decentralisation? | what-are-four-potential-benefits-of-decentralisation |
What are four potential benefits of decentralisation?Answer: - Top managers have more time for strategic decisions. - Better decisions: fast, functional experts, geographical experts. - Motivation of staff. - Training and assessment of staff |
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| 2012-10-18 14:04:25 | What are transactional and transformational leadership? | what-are-transactional-and-transformational-leadership |
What are transactional and transformational leadership?Answer: Transactional: focus on short term, control, maintain/improve current situation, plan, organise, control, defend existing culture, positional power exercised Transformational: long-term vision, climate of trust, empowerment, change culture, power from relationships. |
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| 2012-10-18 16:44:41 | What are the typical characteristics of a project? | what-are-the-typical-characteristics-of-a-project |
What are the typical characteristics of a project?Answer: A start/end, non-routine Novel, unique challenges Team members from different backgrounds so different: priorities, terminology and outlooks No benefit until finished |
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| 2012-10-18 16:45:26 | What are the typical stages of a project? | what-are-the-typical-stages-of-a-project |
What are the typical stages of a project?Answer: * Initiation/initial screening * Risk assessment * Business case * Project plan * Executing * Monitoring and controlling/project milestones * Closing: delivery/review |
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| 2012-10-18 16:47:06 | What tools can be used on a project cost/benefit analysis? | what-tools-can-be-used-on-a-project-costbenefit-analysis |
What tools can be used on a project cost/benefit analysis?Answer: * Net present value/payback/ROCE * Sensitivity analysis and risk analysis * Forecasting techniques * Expected values * Decision trees |
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| 2012-10-18 16:47:44 | What are the three classes of benefit that can be identified when appraising projects? | what-are-the-three-classes-of-benefit-that-can-be-identified-when-appraising-projects |
What are the three classes of benefit that can be identified when appraising projects?Answer: * Observable * Measurable * Quantifiable * Financial |
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| 2012-10-18 16:53:52 | What are the typical purposes of a project initiation document? | what-are-the-typical-purposes-of-a-project-initiation-document |
What are the typical purposes of a project initiation document?Answer: * Defines the project, its scope and its deliverables. * Justifies the project: cost/benefit analysis; risk analysis. * Secures funding for the project. * Defines the roles and responsibilities of project participants. * Gives people the information they need to be productive and effective right from the start. What? Who? How? How much? Why? When? |
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| 2012-10-18 16:54:44 | What are the typical qualities of a project manager? | what-are-the-typical-qualities-of-a-project-manager |
What are the typical qualities of a project manager?Answer: * Leadership abilities, including the ability to motivate * Technical ability in running projects and in the subject matter * Ability to negotiate with project sponsors, project team members and suppliers. * Reporting on progress and difficulties * The ability to stay calm in a crisis * Excellent communication * Ability to delegate to team members. |
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| 2012-10-18 16:55:52 | What are the project management variables? | what-are-the-project-management-variables |
What are the project management variables?Answer: * Cost * Time * Quality * Scope |
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| 2012-10-18 16:57:39 | What are three determinants of risk in a project? | what-are-three-determinants-of-risk-in-a-project |
What are three determinants of risk in a project?Answer: How well is the project scope defined? How large is the project? How complex is the project? |
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| 2012-10-18 16:58:16 | What is meant by ‘benefits realisation’? | what-is-meant-by-benefits-realisation |
What is meant by ‘benefits realisation’?Answer: Benefits arising from projects are not automatic even in a technically successful project. Therefore, the project manager should carry out tasks such as: demonstrations and presentations, training, managing and championing change. |
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| 2012-10-18 16:58:59 | What are the two types of review that should form part of a project completion report? | what-are-the-two-types-of-review-that-should-form-part-of-a-project-completion-report |
What are the two types of review that should form part of a project completion report?Answer: * Post-project review - This is about how well the project was conducted * Post implementation review - This is about what the project achieved eg costs v benefits |
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| 2012-10-18 16:59:37 | What is a “professional bureaucracy” in Mintzberg’s classification? | what-is-a-professional-bureaucracy-in-mintzbergs-classification |
What is a “professional bureaucracy” in Mintzberg’s classification?Answer: An organisation such as a firm of lawyers of accountants. Characterised by a short middle line so that there is good vertical communication and a small technostructure because every job is different and therefore standardisation is limited. |
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| 2012-10-18 17:00:16 | What is ‘transactions marketing’ and ‘relationship marketing’? | what-is-transactions-marketing-and-relationship-marketing |
What is ‘transactions marketing’ and ‘relationship marketing’?Answer: Transactions marketing: Focuses on the product and develops marketing mixes for it according to the needs customers satisfy when they buy it. Relationship marketing: Seeks to attract, maintain and enhance customer relationships by focusing on the whole satisfaction experienced by the customer when dealing with the firm. |
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| 2012-10-18 17:01:41 | What is price skimming? | what-is-price-skimming |
What is price skimming?Answer: Initially a very high price (as some customers will pay that). Then the price is lowered to attract other customers and to sale greater numbers o goods. |
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| 2012-10-18 17:02:11 | What is penetration pricing? | what-is-penetration-pricing |
What is penetration pricing?Answer: A very low initial price to gain a large market share. A very large market share might allow the low price to be sustained and can act as a barrier to entry. |
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| 2012-10-18 17:03:05 | What is non-price competition? | what-is-non-price-competition |
What is non-price competition?Answer: When customers consider more than the price when buying. For example, a strong brand can stimulate sales. |
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| 2012-10-18 17:03:32 | What is a data warehouse and data mining? | what-is-a-data-warehouse-and-data-mining |
What is a data warehouse and data mining?Answer: A data warehouse is a vast collection of historic transaction data (eg, sales by a supermarket). Data mining is searching though that looking for patterns and associations that might be helpful in increasing profits. |
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| 2012-10-18 17:04:36 | What would by included as product features? | what-would-by-included-as-product-features |
What would by included as product features?Answer: * Quality * Design * Brand * Packaging |
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| 2012-10-18 17:05:16 | What is meant by marketing? | what-is-meant-by-marketing |
What is meant by marketing?Answer: Establish needs (market research) and develop the appropriate product or service (R&D). |
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| 2012-10-18 17:05:46 | What is the expected profit arising from the following and what are the problems using expected values in project appraisals? | what-is-the-expected-profit-arising-from-the-following-and-what-are-the-problems-using-expected-values-in-project-appraisals |
What is the expected profit arising from the following and what are the problems using expected values in project appraisals?Outcome I p = 0.3 Profit = 3000 Outcome II p = 0.7 Profit = 5000 Answer: 0.3 x 3000 + 0.7 x 5000 = 4400 Problems: How are probabilities estimated The expected value is usually not ‘expected’ Risk is not captured (eg a poor outcome of 3000 is quite possible in the above case) |
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| 2012-10-18 17:06:38 | What are the two parts of a time series analysis that are analysed using moving averages? | what-are-the-two-parts-of-a-time-series-analysis-that-are-analysed-using-moving-averages |
What are the two parts of a time series analysis that are analysed using moving averages?Answer: The trend (the underlying increase/decrease); The seasonal variations |
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| 2012-10-18 17:07:06 | What are the potential problems when relying on linear regression results? | what-are-the-potential-problems-when-relying-on-linear-regression-results |
What are the potential problems when relying on linear regression results?Answer: The fit must be tested using the coefficient of correlation (r), or the coefficient of determination (r2). If only a few points are used the results are not reliable Extrapolation (predicting outside the range) is dangerous Other known influences (such as inflation) should be removed first. Even good correlation does no prove cause and effect. |
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| 2012-10-18 17:26:32 | Draw and annotate Mendelow’s Matrix | annotate-mendelows-matrix |
Draw and annotate Mendelow’s Matrix
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| 2012-10-18 21:07:13 | What are Johnson and Scholes's criteria for judging the suitability of a strategy | what-are-johnson-and-scholess-criteria-for-judging-the-suitability-of-a-strategy |
What are Johnson and Scholes's criteria for judging the suitability of a strategyAnswer: Suitability Acceptability Feasibility |
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| 2012-10-24 13:11:25 | If you are the defendant in a civil law court case, what title is given to the other party | if-you-are-the-defendant-in-a-civil-law-court-case-what-title-is-given-to-the-other-party |
If you are the defendant in a civil law court case, what title is given to the other party?Answer: The plaintiff |
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| 2012-10-24 13:17:39 | Name the three divisions of the High Court | name-the-three-divisions-of-the-high-court |
Name the three divisions of the High CourtAnswer: Queen's Bench Division, Chancery Division and Family Division |
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| 2012-10-24 13:19:00 | ICC is the abbreviation for: | icc-is-the-abbreviation-for |
ICC is the abbreviation for:Answer: International Criminal Court or International Chamber of Commerce |
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| 2012-10-24 13:19:33 | The “Boots case” illustrates what principle of law | the-boots-case-illustrates-what-principle-of-law |
The “Boots case” illustrates what principle of lawAnswer: That goods on a supermarket shelf are invitations to treat and are not therefore offers capable of acceptance |
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| 2012-10-24 13:20:03 | In a situation where the Court is faced with having to interpret statute | in-a-situation-where-the-court-is-faced-with-having-to-interpret-statute |
In a situation where the Court is faced with having to interpret statute, which rule will the Court look to first?Answer: The Literal Rule |
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| 2012-10-24 13:20:32 | In a situation where the Court is faced with having to interpret statute | in-a-situation-where-the-court-is-faced-with-having-to-interpret-statute-2 |
In a situation where the Court is faced with having to interpret statute, the Court will apply the Golden Rule if the application of the Literal Rule would lead to *****.What is *****?Answer: An absurdity |
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| 2012-10-24 13:21:01 | What principle could be described as “The cornerstone of English Law” | what-principle-could-be-described-as-the-cornerstone-of-english-law |
What principle could be described as “The cornerstone of English Law”?Answer: The principle of “Stare Decisis” or “judicial precedence” |
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| 2012-10-24 13:22:29 | The decision of a Court can be broken down into two elements | the-decision-of-a-court-can-be-broken-down-into-two-elements |
The decision of a Court can be broken down into two elements. One element is binding on subsequent judges. Name the other (non-binding) elementAnswer: Obiter Dicta |
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| 2012-10-24 13:29:29 | What is the meaning and effect of “ratio decidendi” | what-is-the-meaning-and-effect-of-ratio-decidendi |
What is the meaning and effect of “ratio decidendi”?Answer: It means “the rationale for the decision” and the effect is that it is binding on subsequent judges hearing similar cases in courts of same standing or inferior courts |
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| 2012-10-24 13:30:03 | What is the highest court in the English legal system | what-is-the-highest-court-in-the-english-legal-system |
What is the highest court in the English legal system?Answer: The Supreme Court |
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| 2012-10-24 13:30:30 | “Overruling” an earlier decision means what | overruling-an-earlier-decision-means-what |
“Overruling” an earlier decision means whatAnswer: A higher court disagrees with a lower court's decision. It does not alter the earlier decision. It simply deprives it of its authority |
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| 2012-10-24 13:31:07 | What word is used to describe what has happened to the original decision | what-word-is-used-to-describe-what-has-happened-to-the-original-decision |
What word is used to describe what has happened to the original decision when a case goes to appeal and the appeal is won?Answer: Reversing |
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| 2012-10-24 13:31:48 | What is “distinguishing” in the context of judicial precedence | what-is-distinguishing-in-the-context-of-judicial-precedence |
What is “distinguishing” in the context of judicial precedenceAnswer: Where, in a later case, a court distinguishes the facts of the current case from those of an earlier case in the situation that that earlier case decision would have been binding |
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| 2012-10-26 17:51:16 | What case would you cite as an illustration of the principle | 17219 |
What case would you cite as an illustration of the principle that says “An offer can be made to the World at large”Answer: Carlill v Carbolic Smokeball Company |
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| 2012-10-26 17:51:46 | In the definition of a contract, the word “agreement” can be divided into | in-the-definition-of-a-contract-the-word-agreement-can-be-divided-into |
In the definition of a contract, the word “agreement” can be divided into two distinct elements. What are those elements?Answer: Offer and acceptance |
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| 2012-10-26 17:52:26 | There are three essential elements of a contract. Two of them are | there-are-three-essential-elements-of-a-contract-two-of-them-are |
There are three essential elements of a contract. Two of them are “agreement” and “intention”. What's the third elementAnswer: Consideration |
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| 2012-10-26 17:52:53 | There are three essential elements of a contract. Two of them are “consideration” and “intention” | there-are-three-essential-elements-of-a-contract-two-of-them-are-consideration-and-intention |
There are three essential elements of a contract. Two of them are “consideration” and “intention”. What's the third element?Answer: Agreement |
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| 2012-10-26 17:53:33 | There are three essential elements of a contract. Two of them are “agreement” and “consideration” | there-are-three-essential-elements-of-a-contract-two-of-them-are-agreement-and-consideration |
There are three essential elements of a contract. Two of them are “agreement” and “consideration”. What's the third element?Answer: Intention |
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| 2012-10-26 17:54:03 | “As a general rule, an advert is taken to be an offer capable of acceptance”. | as-a-general-rule-an-advert-is-taken-to-be-an-offer-capable-of-acceptance |
“As a general rule, an advert is taken to be an offer capable of acceptance”. Is that statement true?Answer: No, as a general rule, an advert is taken to be an invitation to treat. |
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| 2012-10-26 17:54:34 | The case Williams v Carwardine is a case involving an advert of a reward offered for information. | the-case-williams-v-carwardine-is-a-case-involving-an-advert-of-a-reward-offered-for-information |
The case Williams v Carwardine is a case involving an advert of a reward offered for information. This type of case is an exception to which principle?Answer: A reward case is an exception to the general principle that an advert is an invitation to treat and not an offer . |
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| 2012-10-26 17:55:07 | Is it true that death of the offeror has the effect that the offer is no longer capable of acceptance | is-it-true-that-death-of-the-offeror-has-the-effect-that-the-offer-is-no-longer-capable-of-acceptance |
Is it true that death of the offeror has the effect that the offer is no longer capable of acceptance?Answer: No! If the offer does not involve the personality of the offeror, then it's the notification of the death which makes the offer no longer capable of acceptance (not the death itself) |
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| 2012-10-26 17:56:12 | In the context of consideration, what characterises “executed consideration” | in-the-context-of-consideration-what-characterises-executed-consideration |
In the context of consideration, what characterises “executed consideration”Answer: Where consideration is paid at the same time that the goods are delivered |
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| 2012-10-26 17:57:21 | Complete the following: “Past consideration is | 17229 |
Complete the following: “Past consideration is ********”Answer: Past consideration is no consideration |
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| 2012-10-26 17:58:03 | What is being discussed in the sentence “It must be sufficient but need not be adequate” | 17230 |
What is being discussed in the sentence: “It must be sufficient but need not be adequate”Answer: Consideration – must be sufficient to merit the title “consideration” ie it must have some value |
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| 2012-10-26 17:58:27 | What principle did the case Chappell v Nestle establish | what-principle-did-the-case-chappell-v-nestle-establish |
What principle did the case Chappell v Nestle establish?Answer: Consideration must have some value |
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| 2012-10-26 17:59:23 | Performance of an existing contractual duty is not sufficient to be classed as consideration for a different | performance-of-an-existing-contractual-duty-is-not-sufficient-to-be-classed-as-consideration-for-a-different |
Performance of an existing contractual duty is not sufficient to be classed as consideration for a different contract. Which case established that principle?Answer: Stilk v Myrick |
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| 2012-10-26 17:59:54 | Which case established the principle that acts over and above an existing natural duty already owed | 17233 |
Which case established the principle that acts over and above an existing natural duty already owed are sufficient to merit the title “consideration”?Answer: Ward v Byham |
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| 2012-10-26 18:00:19 | With reference to “intention” what is the normal attitude of the Court | with-reference-to-intention-what-is-the-normal-attitude-of-the-court |
With reference to “intention” what is the normal attitude of the Court to a contract between husband and wife?Answer: The Court will presume that there is NO intention to create legal relations |
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| 2012-10-26 18:00:48 | What doctrine in law is illustrated by the case Central London Property Trust | what-doctrine-in-law-is-illustrated-by-the-case-central-london-property-trust |
What doctrine in law is illustrated by the case Central London Property Trust v High Trees House?Answer: The doctrine of promissory estoppel |
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| 2012-10-26 18:01:28 | With reference to the doctrine of promissory estoppel, complete the following: | 17236 |
With reference to the doctrine of promissory estoppel, complete the following: “When a promise is given and acted upon, then **********”Answer: When a promise is given and acted upon, then “the promissor cannot subsequently go back on that promise to the detriment of the promissee” |
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| 2012-10-26 18:01:49 | What is “executory consideration” | what-is-executory-consideration |
What is “executory consideration”?Answer: It's consideration which is still to be delivered |
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| 2012-10-26 18:02:58 | How may terms be implied into a contract | how-may-terms-be-implied-into-a-contract |
How may terms be implied into a contract?Answer: By statute, by the Courts or by custom |
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| 2012-10-26 18:05:47 | What's the main difference between a term which is a condition and a term which is a warranty | whats-the-main-difference-between-a-term-which-is-a-condition-and-a-term-which-is-a-warranty |
What's the main difference between a term which is a condition and a term which is a warranty?Answer: A condition, when breached, means the contract can be treated as ended. A breach of warranty, means the contract still exists |
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| 2012-10-26 18:06:22 | What's an innominate term | whats-an-innominate-term |
What's an innominate term?Answer: It's a term which could be a condition or it could be a warranty. But we don't know until it's broken |
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| 2012-10-26 18:06:50 | What's an “onerous term” in a contract | whats-an-onerous-term-in-a-contract |
What's an “onerous term” in a contract?Answer: It's a term which involves one party in an unfair position in the event of breach |
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| 2012-10-26 18:07:13 | What are exclusion clauses used for | what-are-exclusion-clauses-used-for |
What are exclusion clauses used for?Answer: They are an attempt to restrict or completely eliminate one party's liability for breach of contract |
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| 2012-10-26 18:07:36 | What is anticipatory breach | what-is-anticipatory-breach |
What is anticipatory breach?Answer: Anticipatory breach is where one party gives notice in advance that they will not go ahead with the contract |
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| 2012-10-26 18:08:25 | In any answer to an exam question concerning damages, two cases are always mentioned. What are they | in-any-answer-to-an-exam-question-concerning-damages-two-cases-are-always-mentioned-what-are-they |
In any answer to an exam question concerning damages, two cases are always mentioned. What are they?Answer: Hadley v Baxendale (remoteness) and Victoria Laundry v Newman Industries (measurement) |
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| 2012-10-26 18:08:53 | What is the main common law remedy for the innocent party in the event of breach of contract | 17245 |
What is the main common law remedy for the innocent party in the event of breach of contract?Answer: Damages |
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| 2012-10-26 18:09:46 | Complete the following: “ ***** will always be awarded if ***** is sufficient” | complete-the-following-will-always-be-awarded-if-is-sufficient |
Complete the following: “ ***** will always be awarded if ***** is sufficient”Answer: Damages will always be awarded if damages is sufficient |
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| 2012-10-26 18:10:17 | What are liquidated damages | what-are-liquidated-damages |
What are liquidated damages?Answer: Liquidated damages are a genuine pre-contractual estimate of damages which would be suffered in the event of a breach and the amount is written as a term of the contract |
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| 2012-10-26 18:10:42 | What is the translation of “quantum meruit” | what-is-the-translation-of-quantum-meruit |
What is the translation of “quantum meruit”?Answer: “For as much as it's worth” |
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| 2012-10-26 18:12:14 | What sort of remedy is “specific performance” | what-sort-of-remedy-is-specific-performance |
What sort of remedy is “specific performance”?Answer: Specific performance is an equitable remedy |
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| 2012-10-26 18:12:36 | What sort of remedy is “damages” | what-sort-of-remedy-is-damages |
What sort of remedy is “damages”?Answer: Damages is a common law remedy |
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| 2012-10-26 18:12:57 | What sort of remedy is “quantum meruit” | what-sort-of-remedy-is-quantum-meruit |
What sort of remedy is “quantum meruit”?Answer: Quantum meruit is a common law remedy |
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| 2012-10-26 18:13:18 | What sort of remedy is “action of price” | what-sort-of-remedy-is-action-of-price |
What sort of remedy is “action of price”?Answer: Action for price is a common law remedy |
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| 2012-10-26 18:13:42 | What sort of remedy is “injunction” | what-sort-of-remedy-is-injunction |
What sort of remedy is “injunction”?Answer: Injunction is an equitable remedy |
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| 2012-10-26 18:14:02 | What sort of remedy is “rescission” | what-sort-of-remedy-is-rescission |
What sort of remedy is “rescission”?Answer: Rescission is an equitable remedy |
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| 2012-10-26 18:14:23 | What sort of remedy is “rectification” | what-sort-of-remedy-is-rectification |
What sort of remedy is “rectification”?Answer: Rectification is an equitable remedy |
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| 2012-10-26 18:15:05 | Which remedy is the Court granting when the Court says (effectively!) “Just do it” | which-remedy-is-the-court-granting-when-the-court-says-effectively-just-do-it |
Which remedy is the Court granting when the Court says (effectively!) “Just do it”?Answer: A Specific performance |
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| 2012-10-26 18:15:36 | What is a “Mareva injunction” | what-is-a-mareva-injunction |
What is a “Mareva injunction”Answer: Mareva injunction is a freezing order applied to the assets of a suspected wrong-doer |
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| 2012-10-26 18:16:26 | “Tort is an example of breach of contract” Is this statement true | tort-is-an-example-of-breach-of-contract-is-this-statement-true |
“Tort is an example of breach of contract” Is this statement true?Answer: It's false – tort is NOT a breach of contract |
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| 2012-10-27 17:07:28 | Assault, battery and false imprisonment are all examples of which “wrong” | assault-battery-and-false-imprisonment-are-all-examples-of-which-wrong |
Assault, battery and false imprisonment are all examples of which “wrong”?Answer: All three are examples of tort |
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| 2012-10-27 17:09:21 | So far as auditors are concerned, which tort is (unfortunately) most likely to affect them | so-far-as-auditors-are-concerned-which-tort-is-unfortunately-most-likely-to-affect-them |
So far as auditors are concerned, which tort is (unfortunately) most likely to affect them?Answer: The tort of negligence |
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| 2012-10-27 17:09:52 | In tort, to whom does a person owe a duty of care | in-tort-to-whom-does-a-person-owe-a-duty-of-care |
In tort, to whom does a person owe a duty of care?Answer: A person owes a duty of care to one's legal neighbours |
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| 2012-10-27 17:10:21 | In tort, who are your legal neighbours | in-tort-who-are-your-legal-neighbours |
In tort, who are your legal neighbours?Answer: Your legal neighbours are those people who are so directly affected by your acts that you should have had them in mind as likely to be affected when you committed those acts |
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| 2012-10-27 17:10:41 | What is the closest translation of “res ipsa loquitur” | what-is-the-closest-translation-of-res-ipsa-loquitur |
What is the closest translation of “res ipsa loquitur”?Answer: “The thing speaks for itself” |
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| 2012-10-27 17:11:08 | What does the case Mahon v Osborne illustrate | what-does-the-case-mahon-v-osborne-illustrate |
What does the case Mahon v Osborne illustrate?Answer: A surgeon who leaves equipment inside the body of a patient is liable in negligence (res ipsa loquitur) unless they can prove non-negligence |
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| 2012-10-27 17:11:37 | What is the effect, in an action alleging tort, of novus actus interveniens | what-is-the-effect-in-an-action-alleging-tort-of-novus-actus-interveniens |
What is the effect, in an action alleging tort, of novus actus interveniens?Answer: It is likely that the action would fail – the loss suffered was not entirely due to the original acts – something new intervened |
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| 2012-10-27 17:12:37 | To he who is willing, there can be no harm | to-he-who-is-willing-there-can-be-no-harm |
“To he who is willing, there can be no harm”. How does that translate in the context of tort?Answer: Volenti non fit injuria |
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| 2012-10-27 17:13:00 | What principle is confirmed by the case Caparo v Dickman | what-principle-is-confirmed-by-the-case-caparo-v-dickman |
What principle is confirmed by the case Caparo v Dickman?Answer: A duty of care is owed to one's neighbours |
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| 2012-10-27 17:13:21 | How would you briefly describe the defence of volenti non fit injuria | how-would-you-briefly-describe-the-defence-of-volenti-non-fit-injuria |
How would you briefly describe the defence of volenti non fit injuria?Answer: To he who is willing there can be no harm |
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| 2012-10-27 17:15:38 | In a tort case the defence volenti non fit injuria merely requires | in-a-tort-case-the-defence-volenti-non-fit-injuria-merely-requires |
“In a tort case the defence volenti non fit injuria merely requires knowledge of the risk”. True Or false?Answer: It's false. For the defence to be successful it's necessary to show that the injured party was a willing participant in the risky activity |
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| 2012-10-27 17:16:41 | The duty of care owed by accountants is greater when advising on take-overs than when auditing | the-duty-of-care-owed-by-accountants-is-greater-when-advising-on-take-overs-than-when-auditing |
“The duty of care owed by accountants is greater when advising on take-overs than when auditing”. Is this statement true?Answer: It's true as illustrated by the case Morgan Crucible v Hill Samuel Bank |
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| 2012-10-27 17:17:13 | In a “contract of service” is the contracted person an employee or is he an independent | in-a-contract-of-service-is-the-contracted-person-an-employee-or-is-he-an-independent |
In a “contract of service” is the contracted person an employee or is he an independent contractorAnswer: the contracted person is an employee |
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| 2012-10-27 17:17:50 | In a “contract for services” is the contracted person an employee or is he an independent contractor? | in-a-contract-for-services-is-the-contracted-person-an-employee-or-is-he-an-independent-contractor |
In a “contract for services” is the contracted person an employee or is he an independent contractor?Answer: The contracted person is an independent contractor |
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| 2012-10-27 17:19:37 | To be classed as an independent contractor much depends on three tests. | to-be-classed-as-an-independent-contractor-much-depends-on-three-tests |
To be classed as an independent contractor much depends on three tests. What are they?Answer: * control test * integration test * economic reality test |
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| 2012-10-27 17:20:09 | What is “constructive dismissal” | what-is-constructive-dismissal |
What is “constructive dismissal”?Answer: Constructive dismissal is where an employer changes the terms of employment of an employee to such a degree that the employee feels that they cannot continue in employment |
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| 2012-10-27 17:20:47 | What is summary dismissal? | what-is-summary-dismissal |
What is summary dismissal?Answer: Summary dismissal is where an employer dismisses an employee without giving any notice |
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| 2012-10-27 17:21:16 | Summary dismissal incurs the employer in no liability if ****** | summary-dismissal-incurs-the-employer-in-no-liability-if |
“Summary dismissal incurs the employer in no liability if ******” Complete the sentenceAnswer: A Summary dismissal incurs the employer in no liability if the employee has committed a serious breach of contract” |
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| 2012-10-27 17:21:41 | When an employee is dismissed in breach of contract and, as a result, they have suffered loss, this is classified as what type of dismissal | when-an-employee-is-dismissed-in-breach-of-contract-and-as-a-result-they-have-suffered-loss-this-is-classified-as-what-type-of-dismissal |
When an employee is dismissed in breach of contract and, as a result, they have suffered loss, this is classified as what type of dismissal?Answer: Wrongful dismissal |
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| 2012-10-27 17:22:05 | When an employee is dismissed not for a statutory reason nor for a fair reason | when-an-employee-is-dismissed-not-for-a-statutory-reason-nor-for-a-fair-reason |
When an employee is dismissed not for a statutory reason nor for a fair reason, this would be classified as what type of dismissal?Answer: Unfair dismissal |
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| 2012-10-27 17:22:36 | Is summary dismissal ever justified? | is-summary-dismissal-ever-justified |
Is summary dismissal ever justified?Answer: Yes, in cases of serious breach of contract by the employee |
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| 2012-10-27 17:23:36 | If an employee is a threat to national security, would their dismissal be classed as automatically fair | if-an-employee-is-a-threat-to-national-security-would-their-dismissal-be-classed-as-automatically-fair |
If an employee is a threat to national security, would their dismissal be classed as automatically fair?Answer: Yes |
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| 2012-10-27 17:24:03 | Participation in an unofficial industrial action is not an automatically fair reason for dismissal | participation-in-an-unofficial-industrial-action-is-not-an-automatically-fair-reason-for-dismissal |
“Participation in an unofficial industrial action is not an automatically fair reason for dismissal”. Is that statement true?Answer: No, participation in an unofficial industrial action IS an automatically fair reason for dismissal |
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| 2012-10-27 17:24:27 | Which is the most common remedy awarded for unfair dismissal? | which-is-the-most-common-remedy-awarded-for-unfair-dismissal |
Which is the most common remedy awarded for unfair dismissal?Answer: Compensation, because in most cases the working relationship would have been irrevocably damaged |
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| 2012-10-27 17:24:52 | Is it true that an agency arrangement may be deemed by the Court to exist | is-it-true-that-an-agency-arrangement-may-be-deemed-by-the-court-to-exist |
Is it true that an agency arrangement may be deemed by the Court to exist, even though the supposed principal and the supposed agent have never met nor know of each other's existenceAnswer: Yes, for example where a person acts and is deemed to be an agent of necessity |
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| 2012-10-27 17:25:24 | Where a person has, historically, been allowed to act as though they were a Chief Executive | where-a-person-has-historically-been-allowed-to-act-as-though-they-were-a-chief-executive |
Where a person has, historically, been allowed to act as though they were a Chief Executive Officer, the other directors would be ****** from denying that title. Complete the gapAnswer: “estopped” |
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| 2012-10-27 17:25:56 | Where a person has, historically, been allowed to act as though they were a Chief Executive Officer, the other directors would be estopped | where-a-person-has-historically-been-allowed-to-act-as-though-they-were-a-chief-executive-officer-the-other-directors-would-be-estopped |
Where a person has, historically, been allowed to act as though they were a Chief Executive Officer, the other directors would be estopped from denying that title. Is this true?Answer: Yes, it is true |
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| 2012-10-27 17:26:37 | What's another word commonly used to express “apparent” as in “apparent authority” | whats-another-word-commonly-used-to-express-apparent-as-in-apparent-authority |
What's another word commonly used to express “apparent” as in “apparent authority”?Answer: Ostensible |
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| 2012-10-27 17:26:58 | The case Watteau v Fenwick illustrates what point in agency law | the-case-watteau-v-fenwick-illustrates-what-point-in-agency-law |
The case Watteau v Fenwick illustrates what point in agency law?Answer: The principle of apparent authority |
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| 2012-10-27 17:27:30 | “In some circumstances a principal may ratify the acts of an agent retrospectively” | in-some-circumstances-a-principal-may-ratify-the-acts-of-an-agent-retrospectively |
“In some circumstances a principal may ratify the acts of an agent retrospectively”. Is this statement true?Answer: Yes, it is true |
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| 2012-10-27 17:28:01 | In company law, when the Chief Executive Officer dies, the company ceases to exist | 17297 |
In company law, when the Chief Executive Officer dies, the company ceases to exist until a replacement CEO is appointed. Is this statement true?Answer: No! |
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| 2012-10-27 17:28:42 | “When a partner in a traditional partnership dies, the partnership is automatically ended”. Is this statement always true | when-a-partner-in-a-traditional-partnership-dies-the-partnership-is-automatically-ended-is-this-statement-always-true |
“When a partner in a traditional partnership dies, the partnership is automatically ended”. Is this statement always true?Answer: Yes, it is always true. The surviving partners can start a new partnership with immediate effect but the original partnership ceases on the death of a partner. |
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| 2012-10-28 15:57:21 | “Under the Limited Partnerships Act of 1907, the death of a limited partner does not bring about the end of the partnership” | under-the-limited-partnerships-act-of-1907-the-death-of-a-limited-partner-does-not-bring-about-the-end-of-the-partnership |
“Under the Limited Partnerships Act of 1907, the death of a limited partner does not bring about the end of the partnership” Is this statement true?Answer: Yes. Neither notice, death nor bankruptcy of the limited partner has the effect of dissolving the partnership. |
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| 2012-10-28 15:57:45 | Is it possible that a partnership may be deemed by the Court to exist even though the two people involved have never spoken to each other | is-it-possible-that-a-partnership-may-be-deemed-by-the-court-to-exist-even-though-the-two-people-involved-have-never-spoken-to-each-other |
Is it possible that a partnership may be deemed by the Court to exist even though the two people involved have never spoken to each other?Answer: Yes, the Court may deem that a partnership by conduct exists where two people carry on a business in common and satisfy the definition of a partnership |
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| 2012-10-28 15:58:45 | Complete the following: “A partnership is the ***** | complete-the-following-a-partnership-is-the |
Complete the following: “A partnership is the ***** which subsists between **** or more people ****** *** business in common with a view to *****”Answer: “A partnership is the relationship which subsists between two or more people carrying on business in common with a view to profit” |
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| 2012-10-28 15:59:12 | Is a joint venture arrangement classed as a partnership | is-a-joint-venture-arrangement-classed-as-a-partnership |
Is a joint venture arrangement classed as a partnership?Answer: Yes, a joint venture is defined as “a partnership formed for a specific purpose, course of trade or voyage” |
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| 2012-10-28 15:59:32 | “The acts of a partner done in the course of the firm's business do not bind the firm. | the-acts-of-a-partner-done-in-the-course-of-the-firms-business-do-not-bind-the-firm | “The acts of a partner done in the course of the firm's business do not bind the firm. Only the individual partner is liable” Is that statement true? Answer: No. The acts of a partner done in the course of the firm's business bind the firm and the partners | ||||||||||||||||||||||||||||||||||||||||||
| 2012-10-28 16:00:14 | Is it necessary for a firm registered under the Limited Liability Partnerships Act 2000 | is-it-necessary-for-a-firm-registered-under-the-limited-liability-partnerships-act-2000 |
Is it necessary for a firm registered under the Limited Liability Partnerships Act 2000 to have an annual audit?Answer: Yes, it's part of the “price payable” for the benefit of limited liability |
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| 2012-10-28 16:00:40 | “Insanity of a partner is an automatic ground for the dissolution of a partnership” | insanity-of-a-partner-is-an-automatic-ground-for-the-dissolution-of-a-partnership |
“Insanity of a partner is an automatic ground for the dissolution of a partnership”. Is this statement true?Answer: No. Insanity as a ground for dissolution is a matter for the Court to decide. It's not automatic |
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| 2012-10-28 16:01:02 | s it always true that a company exists from the date which is shown on | s-it-always-true-that-a-company-exists-from-the-date-which-is-shown-on |
Is it always true that a company exists from the date which is shown on the certificate of incorporation?Answer: Yes, the date on the certificate is conclusive proof that the company exists from that date – Jubilee Cotton Mills v Lewes |
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| 2012-10-28 16:01:29 | Is it always true that once a company has been incorporated it has a separate legal identity | is-it-always-true-that-once-a-company-has-been-incorporated-it-has-a-separate-legal-identity |
Is it always true that once a company has been incorporated it has a separate legal identity?Answer: Yes, it is always true |
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| 2012-10-28 16:02:01 | Is it always true that as soon as a company has been incorporated it may commence trading | is-it-always-true-that-as-soon-as-a-company-has-been-incorporated-it-may-commence-trading |
Is it always true that as soon as a company has been incorporated it may commence trading?Answer: No. Following incorporation, a public company must obtain a trading certificate before it may commence trading |
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| 2012-10-28 16:02:30 | “Where a public company enters a trading contract before it has obtained a trading certificate, the contract is void” | where-a-public-company-enters-a-trading-contract-before-it-has-obtained-a-trading-certificate-the-contract-is-void |
“Where a public company enters a trading contract before it has obtained a trading certificate, the contract is void”. Is that statement true?Answer: No, it is not true. An “innocent” third party can enforce the contract against the company. |
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| 2012-10-28 16:02:59 | What does the abbreviation “plc” stand for | what-does-the-abbreviation-plc-stand-for |
What does the abbreviation “plc” stand for?Answer: “plc” is the abbreviation for “public limited company” |
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| 2012-10-28 16:03:25 | What does the abbreviation “ltd” stand for | what-does-the-abbreviation-ltd-stand-for |
What does the abbreviation “ltd” stand for?Answer: “ltd” is the abbreviation for “limited” and indicates that the company is a private company |
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| 2012-10-28 16:03:49 | What does the abbreviation “llp” stand for | what-does-the-abbreviation-llp-stand-for |
What does the abbreviation “llp” stand for?Answer: “llp” is the abbreviation for “limited liability partnership” |
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| 2012-10-28 16:05:44 | There are three ways of incorporating a company. By “Royal charter” and by “statute” are two | there-are-three-ways-of-incorporating-a-company-by-royal-charter-and-by-statute-are-two |
There are three ways of incorporating a company. By “Royal charter” and by “statute” are two. What is the third way?Answer: By registration |
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| 2012-10-28 16:06:12 | There are three ways of incorporating a company. By “registration” and by “statute” are two. | there-are-three-ways-of-incorporating-a-company-by-registration-and-by-statute-are-two |
There are three ways of incorporating a company. By “registration” and by “statute” are two. What is the third way?Answer: By Royal charter |
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| 2012-10-28 16:06:53 | There are three ways of incorporating a company. By “Royal charter” and by “registration” are two | there-are-three-ways-of-incorporating-a-company-by-royal-charter-and-by-registration-are-two |
There are three ways of incorporating a company. By “Royal charter” and by “registration” are two. What is the third way?Answer: By statute |
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| 2012-10-28 16:07:15 | In which two ways may a member's liability be limited | in-which-two-ways-may-a-members-liability-be-limited |
In which two ways may a member's liability be limited?Answer: By guarantee and by shares |
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| 2012-10-28 16:07:43 | What is the limit of a member's liability in a company limited by shares | what-is-the-limit-of-a-members-liability-in-a-company-limited-by-shares |
What is the limit of a member's liability in a company limited by shares?Answer: A member's liability in a company limited by shares is limited to the amount, if any, as yet unpaid on shares held by the member |
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| 2012-10-28 16:08:46 | “One of the limited uses of the share premium account is to finance the issue of partly paid bonus shares to existing members” | one-of-the-limited-uses-of-the-share-premium-account-is-to-finance-the-issue-of-partly-paid-bonus-shares-to-existing-members |
“One of the limited uses of the share premium account is to finance the issue of partly paid bonus shares to existing members”. Is that statement true?Answer: No. One of the uses is to finance the issue of FULLY PAID bonus shares to existing members |
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| 2012-10-28 16:09:21 | Is there such a beast as an unlimited company | is-there-such-a-beast-as-an-unlimited-company |
Is there such a beast as an unlimited company?Answer: Yes – but Heaven knows why! |
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| 2012-10-28 16:09:44 | The case Salomon v Salomon & Co Ltd confirmed conclusively a basic principle of company law. | the-case-salomon-v-salomon-co-ltd-confirmed-conclusively-a-basic-principle-of-company-law |
The case Salomon v Salomon & Co Ltd confirmed conclusively a basic principle of company law. What was that principle?Answer: The concept that a company is a separate legal entity, distinct from its owners and from those who manage its affairs |
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| 2012-10-28 16:10:08 | In very rare cases the Courts are prepared to look to see who are the actual beneficial owners of a company. | in-very-rare-cases-the-courts-are-prepared-to-look-to-see-who-are-the-actual-beneficial-owners-of-a-company |
In very rare cases the Courts are prepared to look to see who are the actual beneficial owners of a company. This is called “Lifting *** ****” Complete the sentenceAnswer: Lifting the veil |
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| 2012-10-28 16:10:44 | The case Gilford Motor Company v Horne is a case illustrating which principle | the-case-gilford-motor-company-v-horne-is-a-case-illustrating-which-principle |
The case Gilford Motor Company v Horne is a case illustrating which principle?Answer: In a situation where the strict application of the concept of the veil of incorporation would lead to an injustice, the Court is prepared to lift the veil |
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| 2012-10-28 16:11:29 | The case DHN v Tower Hamlets is a case illustrating which principle | the-case-dhn-v-tower-hamlets-is-a-case-illustrating-which-principle |
The case DHN v Tower Hamlets is a case illustrating which principle?Answer: In a situation where the strict application of the concept of the veil of incorporation would lead to an injustice, the Court is prepared to lift the veil |
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| 2012-10-28 16:42:04 | In a case where the plaintiff is referred to as “R”, who is “R” | in-a-case-where-the-plaintiff-is-referred-to-as-r-who-is-r |
In a case where the plaintiff is referred to as “R”, who is “R”? (eg R v Clark)Answer: “R” is the Monarch of the United Kingdom |
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| 2012-10-28 16:42:44 | Is it possible for a member to have their liability increased even in a limited liability company | is-it-possible-for-a-member-to-have-their-liability-increased-even-in-a-limited-liability-company |
Is it possible for a member to have their liability increased even in a limited liability company?Answer: Yes, in a number of situations including if they give their written consent. |
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| 2012-10-28 16:43:33 | Define “promoter” | define-promoter |
Define “promoter”Answer: A promoter is one who undertakes to form a company with reference to a given project and to set it going and who takes the necessary steps to accomplish that purpose |
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| 2012-10-28 16:44:02 | “The duties owed by a promoter are collectively known as ***** duties” | the-duties-owed-by-a-promoter-are-collectively-known-as-duties |
“The duties owed by a promoter are collectively known as ***** duties” Complete the sentenceAnswer: The duties owed by a promoter are collectively known as fiduciary duties |
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| 2012-10-28 16:44:24 | The duty to act with reasonable skill and care is an example of what type of duty | the-duty-to-act-with-reasonable-skill-and-care-is-an-example-of-what-type-of-duty |
The duty to act with reasonable skill and care is an example of what type of duty?Answer: The duty to act with reasonable skill and care is an example of a fiduciary duty |
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| 2012-10-28 16:44:47 | If a promoter enters into a contract on behalf of company which has not yet received its certificate of incorporation | if-a-promoter-enters-into-a-contract-on-behalf-of-company-which-has-not-yet-received-its-certificate-of-incorporation |
If a promoter enters into a contract on behalf of company which has not yet received its certificate of incorporation, is the company liable or, in fact, is anyone liable?Answer: The promoter is liable personally – the company doesn't exist and therefore has no liability |
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| 2012-10-28 16:45:12 | What matters must be disclosed in an “Application for registration” of a new company | what-matters-must-be-disclosed-in-an-application-for-registration-of-a-new-company |
What matters must be disclosed in an “Application for registration” of a new company?Answer: Proposed name, country of domicile of registered office, liability of members, company status (plc or ltd) , postal address of registered office |
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| 2012-10-28 16:45:50 | The date on the certificate of incorporation is ***** proof that that was the date the company was created | the-date-on-the-certificate-of-incorporation-is-proof-that-that-was-the-date-the-company-was-created |
“The date on the certificate of incorporation is ***** proof that that was the date the company was created”. Complete the sentenceAnswer: The date on the certificate of incorporation is conclusive proof that that was the date the company was created |
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| 2012-10-28 16:46:19 | A company's Register of Members must be kept at the company's registered office | a-companys-register-of-members-must-be-kept-at-the-companys-registered-office |
“A company's Register of Members must be kept at the company's registered office” Is this statement always true?Answer: No, not true. A company may keep its register of members at the offices of the company's registrars |
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| 2012-10-28 16:46:50 | A Register of Directors shall contain what information relating to the directors | a-register-of-directors-shall-contain-what-information-relating-to-the-directors |
A Register of Directors shall contain what information relating to the directors?Answer: Present and former names, address (ideally home address), nationality, business occupation, date of birth |
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| 2012-10-28 16:47:28 | The constitution of a company is the combination of three elements. | the-constitution-of-a-company-is-the-combination-of-three-elements |
The constitution of a company is the combination of three elements. What are those elements?Answer: The articles of association, resolutions which affect the articles and any agreements which affect the articles |
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| 2012-10-28 16:47:51 | What is meant by the term “Articles of Association” of a company | what-is-meant-by-the-term-articles-of-association-of-a-company |
What is meant by the term “Articles of Association” of a company?Answer: The Articles of Association consist of the internal rules that relate to the management and administration of the company |
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| 2012-10-28 16:48:14 | What sort of resolution is required to alter the Articles | what-sort-of-resolution-is-required-to-alter-the-articles |
What sort of resolution is required to alter the Articles?Answer: A special resolution is required to effect an alteration to the Articles of a company |
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| 2012-10-28 16:48:42 | What majority voting in favour is required to pass a special resolution | what-majority-voting-in-favour-is-required-to-pass-a-special-resolution |
What majority voting in favour is required to pass a special resolution?Answer: A majority of not less than 75% of votes in favour is required to pass a special resolution |
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| 2012-10-28 16:49:06 | In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order | in-a-company-with-1000-members-what-is-the-minimum-number-of-members-who-must-vote-in-favour-in-order |
In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution?Answer: No! Just one! I didn't say that everyone voted! |
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| 2012-10-28 16:50:18 | In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution | in-a-company-with-1000-members-what-is-the-minimum-number-of-members-who-must-vote-in-favour-in-order-to-pass-a-special-resolution |
In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution and all members vote?Answer: No! Just one! I didn't say that everyone had the same number of votes! |
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| 2012-10-28 16:50:40 | In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution, everyone votes and all members have the same number of votes | in-a-company-with-1000-members-what-is-the-minimum-number-of-members-who-must-vote-in-favour-in-order-to-pass-a-special-resolution-everyone-votes-and-all-members-have-the-same-number-of-votes |
In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution, everyone votes and all members have the same number of votes?Answer: 750 members must vote in favour |
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| 2012-10-28 16:51:07 | There is a limitation on the alterability of a company's articles. | there-is-a-limitation-on-the-alterability-of-a-companys-articles |
There is a limitation on the alterability of a company's articles. They may only be altered if the alteration can be shown to be for the ***** of the company as a *****. Complete the sentenceAnswer: They may only be altered if the alteration can be shown to be for the benefit of the company as a whole |
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| 2012-10-28 16:51:31 | An alteration to the Articles allowing a majority to acquire compulsorily the shares of a minority has been shown not to be for the benefit | an-alteration-to-the-articles-allowing-a-majority-to-acquire-compulsorily-the-shares-of-a-minority-has-been-shown-not-to-be-for-the-benefit |
“An alteration to the Articles allowing a majority to acquire compulsorily the shares of a minority has been shown not to be for the benefit of the company as a whole”. Is this statement true?Answer: Yes, as illustrated by the case Dafen Tinplate v Llanelli Steel |
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| 2012-10-28 16:51:57 | At the time someone becomes a member of a company, it is as though they have entered a contract with | at-the-time-someone-becomes-a-member-of-a-company-it-is-as-though-they-have-entered-a-contract-with |
“At the time someone becomes a member of a company, it is as though they have entered a contract with **** and with ****”. Complete the sentenceAnswer: “At the time someone becomes a member of a company, it is as though they have entered a contract with the company and with all the other members individually” |
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| 2012-10-28 16:53:21 | What sort of resolution is required if a company wishes to change the company name | what-sort-of-resolution-is-required-if-a-company-wishes-to-change-the-company-name |
What sort of resolution is required if a company wishes to change the company name?Answer: A special resolution is required if a company wishes to change the company name |
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| 2012-10-28 16:53:46 | What is meant by the expression “passing off” in the context of company law | what-is-meant-by-the-expression-passing-off-in-the-context-of-company-law |
What is meant by the expression “passing off” in the context of company law?Answer: "passing off" is where a company is established with a name similar to an existing company name and in a similar business such that confusion is likely to result. |
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| 2012-10-28 16:54:06 | Within how many days must a copy of a special resolution be filed with the Registrar of Companies | within-how-many-days-must-a-copy-of-a-special-resolution-be-filed-with-the-registrar-of-companies |
Within how many days must a copy of a special resolution be filed with the Registrar of Companies after being passed at a general meeting of a company?Answer: Within 15 days |
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| 2012-10-28 16:54:27 | A person becomes a member of a company when their name appears in the Register of Members | a-person-becomes-a-member-of-a-company-when-their-name-appears-in-the-register-of-members |
“A person becomes a member of a company when their name appears in the Register of Members” Is this statement true?Answer: Yes, a person becomes a member of a company when their name appears in the Register of Members |
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| 2012-10-28 16:54:50 | A person becomes a member of a company when they have successfully bought shares in the company | a-person-becomes-a-member-of-a-company-when-they-have-successfully-bought-shares-in-the-company |
“A person becomes a member of a company when they have successfully bought shares in the company” Is that statement true?Answer: No, a person becomes a member of a company when their name appears in the Register of Members |
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| 2012-10-28 16:55:15 | If a person's name appears in a Register of Members, this indicates that they are a shareholder of the company | if-a-persons-name-appears-in-a-register-of-members-this-indicates-that-they-are-a-shareholder-of-the-company |
“If a person's name appears in a Register of Members, this indicates that they are a shareholder of the company” Is this statement true?Answer: No, if a person's name appears in a Register of Members, this indicates that they are a member of the company, but not necessarily a shareholder |
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| 2012-10-28 16:55:40 | What is a quorum? | what-is-a-quorum |
What is a quorum?Answer: A quorum is the minimum number of members necessary to be present at a general meeting of a company if resolutions are to be validly passed |
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| 2012-10-28 16:56:08 | Where is the detail of quorum size specified | where-is-the-detail-of-quorum-size-specified |
Where is the detail of quorum size specified?Answer: The detail of quorum size is specified in a company's Articles |
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| 2012-10-28 16:56:30 | What does the word “proxy” mean in the expression “present in person or by proxy” | what-does-the-word-proxy-mean-in-the-expression-present-in-person-or-by-proxy |
What does the word “proxy” mean in the expression “present in person or by proxy”?Answer: A proxy is appointed by a member to represent the member at a general meeting where the member is unable to attend |
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| 2012-10-28 16:56:57 | A proxy appointed by a member of a company to represent the member's wishes must be also a member of the company | a-proxy-appointed-by-a-member-of-a-company-to-represent-the-members-wishes-must-be-also-a-member-of-the-company |
“A proxy appointed by a member of a company to represent the member's wishes must be also a member of the company” It this statement true?Answer: No, it is not necessary that a proxy be a member of the company |
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| 2012-10-28 16:57:34 | What is the minimum number of members required in a public company | what-is-the-minimum-number-of-members-required-in-a-public-company |
What is the minimum number of members required in a public company?Answer: 1 is the minimum number of members required in a public company |
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| 2012-10-28 16:58:01 | What is the minimum number of members required in a private company | what-is-the-minimum-number-of-members-required-in-a-private-company |
What is the minimum number of members required in a private company?Answer: 1 is the minimum number of members required in a private company |
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| 2012-10-28 16:59:00 | What is the minimum number of directors required in a public company | what-is-the-minimum-number-of-directors-required-in-a-public-company |
What is the minimum number of directors required in a public company?Answer: 2 is the minimum number of directors required in a public company |
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| 2012-10-28 17:06:05 | What is the minimum number of directors required in a private company | what-is-the-minimum-number-of-directors-required-in-a-private-company |
What is the minimum number of directors required in a private company?Answer: 1 is the minimum number of directors required in a private company |
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| 2012-10-28 17:07:45 | A public company must have an appropriately qualified company secretary | a-public-company-must-have-an-appropriately-qualified-company-secretary |
“A public company must have an appropriately qualified company secretary” Is this statement true?Answer: Yes, a public company must have an appropriately qualified company secretary |
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| 2012-10-28 17:09:20 | If a private company wishes to have a company secretary, the person appointed must be appropriately qualified | if-a-private-company-wishes-to-have-a-company-secretary-the-person-appointed-must-be-appropriately-qualified |
“If a private company wishes to have a company secretary, the person appointed must be appropriately qualified” Is this statement true?Answer: No, it is not true, no qualifications are necessary for a person to be appointed as a private company secretary |
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| 2012-10-28 17:09:54 | Called-up capital and paid-up capital are two ways of saying the same thing | called-up-capital-and-paid-up-capital-are-two-ways-of-saying-the-same-thing |
“Called-up capital and paid-up capital are two ways of saying the same thing” Is this statement true?Answer: No, called-up capital and paid-up capital are not the same thing |
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| 2012-10-28 17:15:57 | A preference share has that name because of its preferential entitlements over equity shares. | a-preference-share-has-that-name-because-of-its-preferential-entitlements-over-equity-shares |
A preference share has that name because of its preferential entitlements over equity shares. One preference is that it shall receive its dividend before any equity dividend is paid. What is the other?Answer: In the event of a liquidation, preference shareholders shall be repaid their capital, in full, before the equity shareholders receive a single cent in repayment of their capital |
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| 2012-10-28 17:16:37 | If pre-tax profit is $40,000, post-tax profit is $36,000 | if-pre-tax-profit-is-40000-post-tax-profit-is-36000 |
If pre-tax profit is $40,000, post-tax profit is $36,000, and there are 10,000 50 cent 6% preference shares in issue, how much is the preference share dividend for the year?Answer: $300 ie 6% * 10,000 * .50 |
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| 2012-10-28 17:17:34 | For the purposes of the F4 examination, it is important to know the difference between “loan stock” and “debentures” | for-the-purposes-of-the-f4-examination-it-is-important-to-know-the-difference-between-loan-stock-and-debentures |
For the purposes of the F4 examination, it is important to know the difference between “loan stock” and “debentures”. Is this statement true?Answer: No, it is NOT necessary to be able to differentiate between loan stock and debentures in the F4 examination |
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| 2012-10-28 17:18:02 | A debenture may be secured by way of a fixed charge. What characterises a fixed charge as compared with a floating charge | a-debenture-may-be-secured-by-way-of-a-fixed-charge-what-characterises-a-fixed-charge-as-compared-with-a-floating-charge |
A debenture may be secured by way of a fixed charge. What characterises a fixed charge as compared with a floating charge?Answer: A fixed charge attaches to an individual asset whereby the borrower is not able freely to deal with that asset |
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| 2012-10-28 17:18:52 | A debenture may be secured by way of a floating charge. What characterises a floating charge as compared with a fixed charge | a-debenture-may-be-secured-by-way-of-a-floating-charge-what-characterises-a-floating-charge-as-compared-with-a-fixed-charge |
A debenture may be secured by way of a floating charge. What characterises a floating charge as compared with a fixed charge?Answer: A floating charge does not attach to an individual asset but rather to a class of assets including current assets. The borrower is able freely to deal with the assets subject to the charge |
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| 2012-10-28 17:19:19 | At a general meeting of the company, the debenture holders' votes are counted before those of the equity shareholders | at-a-general-meeting-of-the-company-the-debenture-holders-votes-are-counted-before-those-of-the-equity-shareholders |
“At a general meeting of the company, the debenture holders' votes are counted before those of the equity shareholders” Is this statement true?Answer: No, this is not true. At a general meeting of the company, the debenture holders have no votes – they are creditors, not members |
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| 2012-10-28 17:28:42 | On a liquidation, the floating charge debenture holders are paid in priority to all others | on-a-liquidation-the-floating-charge-debenture-holders-are-paid-in-priority-to-all-others |
“On a liquidation, the floating charge debenture holders are paid in priority to all others. Their claim “floats” to the top of those people who are owed by the company” Is this statement true?Answer: No, on a liquidation, the FIXED charge debenture holders are paid in priority to all others. |
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| 2012-10-28 17:29:12 | On a liquidation, all debenture holders are paid in priority to the members. | on-a-liquidation-all-debenture-holders-are-paid-in-priority-to-the-members |
“On a liquidation, all debenture holders are paid in priority to the members.” Is this statement true?Answer: Yes, on a liquidation, all debenture holders are paid in priority to all the members |
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| 2012-10-28 17:29:56 | In the event that there are two similar charges on the same asset, the charge which is registered first has priority over the one registered second | in-the-event-that-there-are-two-similar-charges-on-the-same-asset-the-charge-which-is-registered-first-has-priority-over-the-one-registered-second |
“In the event that there are two similar charges on the same asset, the charge which is registered first has priority over the one registered second” Is this statement true?Answer: No, the statement is not true. The one with priority is the charge which was created first, not necessarily the one which was registered first |
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| 2012-10-28 17:30:18 | To be valid, a charge must be registered with the Registrar of Companies within how many days of its creation | to-be-valid-a-charge-must-be-registered-with-the-registrar-of-companies-within-how-many-days-of-its-creation |
To be valid, a charge must be registered with the Registrar of Companies within how many days of its creation?Answer: To be valid, a charge must be registered with the Registrar of Companies within 21 days of its creation |
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| 2012-10-28 17:30:44 | In order that a company may reduce its share capital, it requires three authorities | in-order-that-a-company-may-reduce-its-share-capital-it-requires-three-authorities |
In order that a company may reduce its share capital, it requires three authorities. What are they?Answer: In order that a company may reduce its share capital, it requires permission within the Articles, a special resolution and permission of the Court |
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| 2012-10-28 17:31:11 | In order that a company may reduce its share capital it requires permission within the Articles and permission from the Court. | in-order-that-a-company-may-reduce-its-share-capital-it-requires-permission-within-the-articles-and-permission-from-the-court |
In order that a company may reduce its share capital it requires permission within the Articles and permission from the Court. It also needs a third authority. What is it?Answer: In order that a company may reduce its share capital, it requires not only permission within the Articles and permission of the Court. It also requires a special resolution to be passed |
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| 2012-10-30 08:16:26 | In order that a company may reduce its share capital it requires permission within the Articles and a special resolution. | in-order-that-a-company-may-reduce-its-share-capital-it-requires-permission-within-the-articles-and-a-special-resolution |
In order that a company may reduce its share capital it requires permission within the Articles and a special resolution. It also needs a third authority. What is it?Answer: In order that a company may reduce its share capital it requires permission within the Articles, a special resolution and also permission of the Court |
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| 2012-10-30 08:17:03 | In every situation when a company issues shares for an amount lower than their face value, the company shall first of all get the permission of the Court | in-every-situation-when-a-company-issues-shares-for-an-amount-lower-than-their-face-value-the-company-shall-first-of-all-get-the-permission-of-the-court |
“In every situation when a public company issues shares for an amount lower than their face value, the company shall first of all get the permission of the Court” Is this statement true?Answer: No! In no situation is a public company allowed to issue shares for an amount less than their face value |
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| 2012-10-30 08:17:32 | In the context of shares in a company, the expressions “face value”, “par value” and “nominal value” mean the same | in-the-context-of-shares-in-a-company-the-expressions-face-value-par-value-and-nominal-value-mean-the-same |
“In the context of shares in a company, the expressions “face value”, “par value” and “nominal value” mean the same.” Is this statement true?Answer: Yes, “face value”, “par value” and “nominal value” do have the same meaning |
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| 2012-10-30 08:18:17 | The entry to balance the cash received on the event of a bonus issue of shares is to a combination of the share capital account and the share premium account | the-entry-to-balance-the-cash-received-on-the-event-of-a-bonus-issue-of-shares-is-to-a-combination-of-the-share-capital-account-and-the-share-premium-account |
“The entry to balance the cash received on the event of a bonus issue of shares is to a combination of the share capital account and the share premium account” Is this statement true?Answer: No, it is not true! There is no cash received on the event of a bonus issue! |
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| 2012-10-30 08:18:45 | The entry to balance the cash received on the event of a rights issue of shares is to a combination of the share capital account and the share premium account | the-entry-to-balance-the-cash-received-on-the-event-of-a-rights-issue-of-shares-is-to-a-combination-of-the-share-capital-account-and-the-share-premium-account |
“The entry to balance the cash received on the event of a rights issue of shares is to a combination of the share capital account and the share premium account” Is this statement true?Answer: Yes, the share capital account will be credited with the nominal value of the new issue and the share premium account with the excess proceeds over nominal value |
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| 2012-10-30 08:19:15 | To write off preliminary and formation expenses” is one of the few allowable uses of the share premium account. | to-write-off-preliminary-and-formation-expenses-is-one-of-the-few-allowable-uses-of-the-share-premium-account |
“To write off preliminary and formation expenses” is one of the few allowable uses of the share premium account. Is this statement true?Answer: Yes, “to write off preliminary and formation expenses” is one of the few allowable uses of the share premium account. |
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| 2012-10-30 08:19:46 | To finance the issue of fully paid bonus shares to existing members” is one of the few allowable uses of the share premium account | to-finance-the-issue-of-fully-paid-bonus-shares-to-existing-members-is-one-of-the-few-allowable-uses-of-the-share-premium-account |
“To finance the issue of fully paid bonus shares to existing members” is one of the few allowable uses of the share premium account. Is this statement true?Answer: Yes, “to finance the issue of fully paid bonus shares to existing members” is one of the few allowable uses of the share premium account. |
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| 2012-10-30 08:20:28 | To provide for the dividend payable on the 6% redeemable preference shares is one of the few allowable uses of the share premium account. | to-provide-for-the-dividend-payable-on-the-6-redeemable-preference-shares-is-one-of-the-few-allowable-uses-of-the-share-premium-account |
“To provide for the dividend payable on the 6% redeemable preference shares is one of the few allowable uses of the share premium account.” Is this statement true?Answer: No, the statement is not true. Providing the finance for a dividend is NOT an allowable use of the share premium account |
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| 2012-10-30 08:21:32 | A company may only make distributions out of *** | a-company-may-only-make-distributions-out-of |
“A company may only make distributions out of *** ***. *** *** are calculated as “*** *** ***” less “*** *** ***” Complete the sentencesAnswer: A company may only make distributions out of distributable profits . Distributable profits are calculated as “ accumulated realised profits ” less “ accumulated realised losses ” |
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| 2012-10-30 08:21:57 | There are two statutory capital undistributable reserves. | there-are-two-statutory-capital-undistributable-reserves |
There are two statutory capital undistributable reserves. What are they?Answer: The Share Premium Account and the Capital Redemption Reserve |
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| 2012-10-30 08:22:57 | What are Neds? | 17477 |
What are Neds?Answer: Non-executive directors |
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| 2012-10-30 08:23:26 | How is “corporate governance” defined | how-is-corporate-governance-defined |
How is “corporate governance” defined?Answer: “Corporate governance” is a system whereby companies are directed and controlled |
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| 2012-10-30 08:23:56 | In a company which complies with the UK Corporate Governance Code, what is the minimum number of non-executive directors | in-a-company-which-complies-with-the-uk-corporate-governance-code-what-is-the-minimum-number-of-non-executive-directors |
In a company which complies with the UK Corporate Governance Code, what is the minimum number of non-executive directors for a large public company?Answer: The minimum number of non-executive directors for a large UK public company complying with the UK Corporate Governance Code is “at least as many non-executives as executive and ideally not less than 3" |
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| 2012-10-30 08:30:26 | In a company which complies with the UK Corporate Governance Code, it is in compliance when the role of Chair and that of Chief Executive | in-a-company-which-complies-with-the-uk-corporate-governance-code-it-is-in-compliance-when-the-role-of-chair-and-that-of-chief-executive |
“In a company which complies with the UK Corporate Governance Code, it is in compliance when the role of Chair and that of Chief Executive are held by the same person” Is this statement true?Answer: No, the UK Corporate Governance Code requires that the roles of Chair and Chief Executive be split between two individuals of comparably equal strength and charisma |
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| 2012-10-30 08:31:14 | What sort of resolution is required to be passed by a company in the event that a director should be removed from office | what-sort-of-resolution-is-required-to-be-passed-by-a-company-in-the-event-that-a-director-should-be-removed-from-office |
What sort of resolution is required to be passed by a company in the event that a director should be removed from office?Answer: An ordinary resolution |
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| 2012-10-30 08:31:38 | An ordinary resolution requires what size of majority voting in favour | an-ordinary-resolution-requires-what-size-of-majority-voting-in-favour |
An ordinary resolution requires what size of majority voting in favour?Answer: A simple majority – ie one more vote in favour than votes against |
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| 2012-10-30 08:32:00 | Special notice is sometimes required for what type of resolution in a company's general meeting | special-notice-is-sometimes-required-for-what-type-of-resolution-in-a-companys-general-meeting |
Special notice is sometimes required for what type of resolution in a company's general meeting?Answer: An ordinary resolution sometimes requires special notice |
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| 2012-10-30 08:32:26 | Special notice is required of an ordinary resolution in the event that a director is to be removed from office | special-notice-is-required-of-an-ordinary-resolution-in-the-event-that-a-director-is-to-be-removed-from-office |
“Special notice is required of an ordinary resolution in the event that a director is to be removed from office” Is this statement true?Answer: Yes, special notice is required of an ordinary resolution to remove a director from office |
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| 2012-10-30 08:32:50 | Special notice is required of an ordinary resolution in the event that an auditor is to be removed from office during their year of office | special-notice-is-required-of-an-ordinary-resolution-in-the-event-that-an-auditor-is-to-be-removed-from-office-during-their-year-of-office |
“Special notice is required of an ordinary resolution in the event that an auditor is to be removed from office during their year of office” Is this statement true?Answer: Yes, special notice is required of an ordinary resolution to remove an auditor from office during their year of office |
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| 2012-10-30 08:33:27 | Whenever a company wishes to change auditors, they must pass an ordinary resolution with special notice | whenever-a-company-wishes-to-change-auditors-they-must-pass-an-ordinary-resolution-with-special-notice |
“Whenever a company wishes to change auditors, they must pass an ordinary resolution with special notice” Is this statement true?Answer: Yes, in every circumstance when a company wishes to change auditors the company must pass an ordinary resolution with special notice |
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| 2012-10-30 08:33:59 | If a firm of auditors wishes to resign, or not seek re-election, they must deliver to the company's registered office a “statement of circumstances | if-a-firm-of-auditors-wishes-to-resign-or-not-seek-re-election-they-must-deliver-to-the-companys-registered-office-a-statement-of-circumstances |
If a firm of auditors wishes to resign, or not seek re-election, they must deliver to the company's registered office a “statement of circumstances” Is this statement true?Answer: No. If a firm of auditors wishes to resign, or not seek re-election, they must deliver to the company's registered office either a “statement of circumstances” or a “statement of no circumstances” |
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| 2012-10-30 08:34:22 | When a director is proposed to be removed from office, the director has the right to prepare “written | when-a-director-is-proposed-to-be-removed-from-office-the-director-has-the-right-to-prepare-written |
When a director is proposed to be removed from office, the director has the right to prepare “written **** of ***** *****” Complete the sentenceAnswer: When a director is proposed to be removed from office, the director has the right to prepare “written representations of reasonable length and not defamatory in nature” |
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| 2012-10-30 08:34:48 | At the first annual general meeting of a public company, what proportion of the directors must retire and (may) | at-the-first-annual-general-meeting-of-a-public-company-what-proportion-of-the-directors-must-retire-and-may |
At the first annual general meeting of a public company, what proportion of the directors must retire and (may) seek re-electionAnswer: At the first annual general meeting of a public company, all the directors must retire and (may) seek re-election |
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| 2012-10-30 08:36:49 | A public company must hold its first annual general meeting no later than how many months after incorporation | a-public-company-must-hold-its-first-annual-general-meeting-no-later-than-how-many-months-after-incorporation |
A public company must hold its first annual general meeting no later than how many months after incorporationAnswer: A public company must hold its first annual general meeting no later than 6 months after its first year end ie a maximum of 18 months after incorporation |
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| 2012-10-30 08:37:12 | Within how many months after incorporation must a private company hold its first annual general meeting after incorporation | within-how-many-months-after-incorporation-must-a-private-company-hold-its-first-annual-general-meeting-after-incorporation |
Within how many months after incorporation must a private company hold its first annual general meeting?Answer: It is not a statutory requirement that private companies should have an annual general meeting |
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| 2012-10-30 08:37:51 | Is it allowable for a director who has recently declared herself to be bankrupt to continue in office | is-it-allowable-for-a-director-who-has-recently-declared-herself-to-be-bankrupt-to-continue-in-office |
Is it allowable for a director who has recently declared herself to be bankrupt to continue in office as a director of a company?Answer: No, it is not allowable for a director who has recently declared herself to be bankrupt to continue in office as a director of a company |
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| 2012-10-30 08:38:20 | In company law, what does the abbreviation CDDA mean | in-company-law-what-does-the-abbreviation-cdda-mean |
In company law, what does the abbreviation CDDA mean?Answer: In company law, the abbreviation CDDA stands for the Company Directors Disqualification Act |
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| 2012-10-30 08:38:43 | Is it true that directors have a statutory duty to avoid a conflict of interest | is-it-true-that-directors-have-a-statutory-duty-to-avoid-a-conflict-of-interest |
Is it true that directors have a statutory duty to avoid a conflict of interest?Answer: Yes, it is true that directors have a statutory duty to avoid a conflict of interest |
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| 2012-10-30 08:39:04 | Directors should act with such degree of skill, care and diligence as could reasonably be expected from a person of that age | directors-should-act-with-such-degree-of-skill-care-and-diligence-as-could-reasonably-be-expected-from-a-person-of-that-age |
“Directors should act with such degree of skill, care and diligence as could reasonably be expected from a person of that age, experience and qualification” Is this statement true?Answer: Yes, directors should act with such degree of skill, care and diligence as could reasonably be expected from a person of that age, experience and qualification |
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| 2012-10-30 08:39:26 | In company law what is the literal translation of “ultra vires” in the context of directors' actions | in-company-law-what-is-the-literal-translation-of-ultra-vires-in-the-context-of-directors-actions |
In company law what is the literal translation of “ultra vires” in the context of directors' actionsAnswer: “Ultra vires” literally translates as “beyond the powers” |
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| 2012-10-30 08:39:50 | Is it reasonable for a director to claim that she could not be expected to promote the interests of the company | is-it-reasonable-for-a-director-to-claim-that-she-could-not-be-expected-to-promote-the-interests-of-the-company |
Is it reasonable for a director to claim that she could not be expected to promote the interests of the company?Answer: No, it is a statutory duty of directors to promote the interests of the company |
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| 2012-10-30 08:40:20 | Full disclosure of interests in contracts and transactions of a company should be made by directors to a sub-committee of the board at the earliest opportunity | full-disclosure-of-interests-in-contracts-and-transactions-of-a-company-should-be-made-by-directors-to-a-sub-committee-of-the-board-at-the-earliest-opportunity |
“Full disclosure of interests in contracts and transactions of a company should be made by directors to a sub-committee of the board at the earliest opportunity” Is this statement true?Answer: No, full disclosure of interests in contracts and transactions of a company should be made by directors to the full board. It is not enough to disclose only to a sub-committee |
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| 2012-10-30 08:40:45 | A public company must hold an annual general meeting every calendar year. | 17499 |
A public company must hold an annual general meeting every calendar year. What other type of general meeting may a public company hold?Answer: A public company MAY hold general meetings which are not annual general meetings. These are called “other general meetings” |
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| 2012-10-30 08:41:10 | Where a private company wishes to appoint a company secretary, that appointee should, by law, be appropriately qualified | where-a-private-company-wishes-to-appoint-a-company-secretary-that-appointee-should-by-law-be-appropriately-qualified |
“Where a private company wishes to appoint a company secretary, that appointee should, by law, be appropriately qualified” Is this statement true?Answer: No, where a private company wishes to appoint a company secretary, it is not statutorily necessary that that appointee should have any qualifications. It could be your grand-mother! |
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| 2012-10-30 08:42:11 | Anybody may be appointed as the auditor of a private company | anybody-may-be-appointed-as-the-auditor-of-a-private-company |
“Anybody may be appointed as the auditor of a private company” Is this statement true?Answer: No, if a private company wishes to have an auditor, that appointee shall be appropriately qualified |
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| 2012-10-30 08:42:37 | It is the members' right in a general meeting to determine the level of the auditors' remuneration | it-is-the-members-right-in-a-general-meeting-to-determine-the-level-of-the-auditors-remuneration |
“It is the members' right in a general meeting to determine the level of the auditors' remuneration” Is this statement true?Answer: Yes, but it is normal that the members will authorise the board to negotiate the level of the auditors' remuneration |
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| 2012-10-30 08:44:00 | In a private company, any resolution may be passed as a written resolution” | in-a-private-company-any-resolution-may-be-passed-as-a-written-resolution |
“In a private company, any resolution may be passed as a written resolution” Is this statement true?Answer: No, a resolution to remove a director or an auditor cannot be passed as a written resolution but any other resolution may be. |
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| 2012-10-30 08:44:27 | Where a private company chooses to appoint a company secretary, is it possible for the sole director also to be the company secretary | where-a-private-company-chooses-to-appoint-a-company-secretary-is-it-possible-for-the-sole-director-also-to-be-the-company-secretary |
Where a private company chooses to appoint a company secretary, is it possible for the sole director also to be the company secretary?Answer: No, where a private company chooses to appoint a company secretary, it is not possible for the sole director also to be the company secretary |
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| 2012-10-30 08:44:56 | What, by statutory definition, is a “shadow director” | what-by-statutory-definition-is-a-shadow-director |
What, by statutory definition, is a “shadow director”?Answer: A shadow director is defined as “a person in accordance with whose instructions the directors are accustomed to act” |
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| 2012-10-30 08:45:23 | Where the directors of a company always act upon the advice of their auditor | where-the-directors-of-a-company-always-act-upon-the-advice-of-their-auditor |
Where the directors of a company always act upon the advice of their auditor, is it the case that the auditor would be classed as a shadow director?Answer: No, a person acting in a professional capacity (auditor, legal advisor, banker) shall not be classed as a shadow director |
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| 2012-10-30 08:45:48 | An annual general meeting requires a notice period of how many days | an-annual-general-meeting-requires-a-notice-period-of-how-many-days |
An annual general meeting requires a notice period of how many days?Answer: An annual general meeting requires a notice period of 14 days |
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| 2012-10-30 08:47:11 | Is it possible to hold an annual general meeting of a public company with only 2 days' notice | is-it-possible-to-hold-an-annual-general-meeting-of-a-public-company-with-only-2-days-notice |
Is it possible to hold an annual general meeting of a public company with only 2 days' notice?Answer: Yes, it is possible to hold an annual general meeting of a public company with only 2 days' notice provided short notice has been approved by the holders of 100% of the votes |
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| 2012-10-30 08:47:36 | A special resolution requires how many days' notice if it is to be validly passed | a-special-resolution-requires-how-many-days-notice-if-it-is-to-be-validly-passed |
A special resolution requires how many days' notice if it is to be validly passed?Answer: A special resolution requires 14 days' notice if it is to be validly passed |
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| 2012-10-30 08:48:02 | Whose responsibility is it to call / convene a general meeting of the members of a company | whose-responsibility-is-it-to-call-convene-a-general-meeting-of-the-members-of-a-company |
Whose responsibility is it to call / convene a general meeting of the members of a company?Answer: It is the directors' responsibility to call / convene a general meeting of the members of a company, but they normally delegate that duty to the company secretary |
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| 2012-10-30 08:48:40 | A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a public company | a-director-who-has-reached-the-age-of-70-is-disqualified-from-continuing-to-hold-office-as-a-director-of-a-public-company |
“A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a public company” Is this statement true?Answer: No, but the director must seek re-election every year after attaining the age of 70 |
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| 2012-10-30 08:49:04 | A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a company | a-director-who-has-reached-the-age-of-70-is-disqualified-from-continuing-to-hold-office-as-a-director-of-a-company |
“A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a company” Is this statement true?Answer: No, a director who has reached the age of 70 may continue to serve as a director of a company but, in the case of a public company, the director must seek re-election every year |
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| 2012-10-30 08:49:51 | A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a private company | a-director-who-has-reached-the-age-of-70-is-disqualified-from-continuing-to-hold-office-as-a-director-of-a-private-company |
“A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a private company” Is this statement true?Answer: No, there is no upper age limit applied to directors of private companies |
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| 2012-10-30 08:50:21 | In the case of A Large Company plc, how many members represent a quorum at a general meeting | in-the-case-of-a-large-company-plc-how-many-members-represent-a-quorum-at-a-general-meeting |
In the case of A Large Company plc, how many members represent a quorum at a general meeting?Answer: It's whatever it says in the Articles |
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| 2012-10-30 08:50:57 | There are two types of voluntary liquidation. | there-are-two-types-of-voluntary-liquidation |
There are two types of voluntary liquidation. What are the two types?Answer: A members' voluntary liquidation and a creditors' voluntary liquidation |
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| 2012-10-30 08:51:18 | If a members' voluntary liquidation is a voluntary action of the members, a creditors' voluntary liquidation | if-a-members-voluntary-liquidation-is-a-voluntary-action-of-the-members-a-creditors-voluntary-liquidation |
If a members' voluntary liquidation is a voluntary action of the members, a creditors' voluntary liquidation is a voluntary act of which group of peopleAnswer: The members! It's called a creditors' voluntary liquidation because the creditors are not likely going to be paid their debts in full |
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| 2012-10-30 08:51:48 | What is the essential and fundamental difference between a members' voluntary liquidation and a creditors' voluntary liquidation? | what-is-the-essential-and-fundamental-difference-between-a-members-voluntary-liquidation-and-a-creditors-voluntary-liquidation |
What is the essential and fundamental difference between a members' voluntary liquidation and a creditors' voluntary liquidation?Answer: In one word, SOLVENCY |
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| 2012-10-30 08:52:16 | Is it true that the Court may, on application, direct that a public company be liquidated where the company has failed | is-it-true-that-the-court-may-on-application-direct-that-a-public-company-be-liquidated-where-the-company-has-failed |
Is it true that the Court may, on application, direct that a public company be liquidated where the company has failed to obtain a trading certificate within 12 months of incorporation?Answer: Yes, it is true. It's one of the six grounds for which the Court may make that compulsory liquidation order |
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| 2012-10-30 08:52:46 | What sort of resolution is required to be passed by the members to put their company into liquidation | 17519 |
What sort of resolution is required to be passed by the members to put their company into liquidation?Answer: A special resolution requiring a 75% majority voting in favour |
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| 2012-10-30 08:53:21 | Is it possible for the members of a private company to pass a written resolution to place their company into liquidation | is-it-possible-for-the-members-of-a-private-company-to-pass-a-written-resolution-to-place-their-company-into-liquidation |
Is it possible for the members of a private company to pass a written resolution to place their company into liquidation?Answer: Yes, provided a majority of 75% vote in favour, a private company can be put into liquidation by passing a written resolution |
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| 2012-10-30 08:54:02 | Which type of liquidation requires the directors to prepare a declaration of solvency | which-type-of-liquidation-requires-the-directors-to-prepare-a-declaration-of-solvency |
Which type of liquidation requires the directors to prepare a declaration of solvency?Answer: A members' voluntary liquidation requires the directors to prepare a declaration of solvency |
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| 2012-10-30 08:56:14 | There are two main grounds under which the Court may grant a liquidation order. | 17522 |
There are two main grounds under which the Court may grant a liquidation order. What are they?Answer: The Court may grant a liquidation order: * on the grounds that it would be just and equitable * on the grounds that the company is unable to pay its debts as they fall due |
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| 2012-10-30 08:56:45 | Re German Date Coffee Company is a case where the Court granted a liquidation order. | re-german-date-coffee-company-is-a-case-where-the-court-granted-a-liquidation-order |
Re German Date Coffee Company is a case where the Court granted a liquidation order. Why did the Court make that order?Answer: The Court made the order on the grounds that it was just and equitable – the sub-stratum of the company no longer existed |
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| 2012-10-30 08:57:06 | What was the case when the Court granted a liquidation order on the grounds that there was deadlock on the board | what-was-the-case-when-the-court-granted-a-liquidation-order-on-the-grounds-that-there-was-deadlock-on-the-board |
What was the case when the Court granted a liquidation order on the grounds that there was deadlock on the board?Answer: The case when the Court granted a liquidation order on the grounds that there was deadlock on the board was re Yenidji Tobacco |
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| 2012-10-30 08:57:31 | In a relatively recent case, the Court granted a compulsory liquidation order on the grounds that the company was a “quasi-partnership” | in-a-relatively-recent-case-the-court-granted-a-compulsory-liquidation-order-on-the-grounds-that-the-company-was-a-quasi-partnership |
In a relatively recent case, the Court granted a compulsory liquidation order on the grounds that the company was a “quasi-partnership” What was that case?Answer: The case where the Court determined that the company was a “quasi-partnership” was Ebrahimi v Westbourne Galleries |
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| 2012-10-30 08:58:00 | Where does the Official Receiver fit into company law on liquidations | where-does-the-official-receiver-fit-into-company-law-on-liquidations |
Where does the Official Receiver fit into company law on liquidations?Answer: The Official Receiver will be appointed by the Court as Provisional Liquidator in the event of the Court granting a compulsory liquidation order |
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| 2012-10-30 08:58:21 | What is a Special Manager | what-is-a-special-manager |
What is a Special Manager?Answer: Special Manager is a person appointed on application to the Court by the Official Receiver to take control of the company's property during the liquidation process |
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| 2012-10-30 08:58:51 | Where a company is in financial difficulties, there may be a way other than liquidation by which a company could be rescued | where-a-company-is-in-financial-difficulties-there-may-be-a-way-other-than-liquidation-by-which-a-company-could-be-rescued |
Where a company is in financial difficulties, there may be a way other than liquidation by which a company could be rescued. What is that process called?Answer: A way other than liquidation by which a company could be rescued is called an Administration |
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| 2012-10-30 08:59:15 | A person who is to be appointed as liquidator must hold a specific qualification. | a-person-who-is-to-be-appointed-as-liquidator-must-hold-a-specific-qualification |
A person who is to be appointed as liquidator must hold a specific qualification. What is that qualification?Answer: A person who is to be appointed as liquidator must be a “qualified insolvency practitioner” |
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| 2012-10-30 08:59:42 | A person who is to be appointed as administrator must hold a specific qualification. | a-person-who-is-to-be-appointed-as-administrator-must-hold-a-specific-qualification |
A person who is to be appointed as administrator must hold a specific qualification. What is that qualification?Answer: A person who is to be appointed as administrator must be a “qualified insolvency practitioner” |
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| 2012-10-30 09:00:03 | It is a requirement of the UK Corporate Governance Code that directors should be remunerated in part based on their performance | it-is-a-requirement-of-the-uk-corporate-governance-code-that-directors-should-be-remunerated-in-part-based-on-their-performance |
“It is a requirement of the UK Corporate Governance Code that directors should be remunerated in part based on their performance” Is this statement true?Answer: Yes, it is a requirement of the UK Corporate Governance Code that part of the directors' remuneration should be performance related |
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| 2012-10-30 09:01:17 | To which body of people does a whistle-blower turn in the event that the whistle-blower has concerns over alleged breaches of regulation | to-which-body-of-people-does-a-whistle-blower-turn-in-the-event-that-the-whistle-blower-has-concerns-over-alleged-breaches-of-regulation |
To which body of people does a whistle-blower turn in the event that the whistle-blower has concerns over alleged breaches of regulation / internal controls?Answer: A whistle-blower would refer their concerns over alleged breaches of regulation / internal controls to the Audit Committee |
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| 2012-10-30 09:01:49 | To what does the expression “comply or explain” refer within the UK Corporate Governance Code | to-what-does-the-expression-comply-or-explain-refer-within-the-uk-corporate-governance-code |
To what does the expression “comply or explain” refer within the UK Corporate Governance Code?Answer: The expression “comply or explain” refers to public quoted companies which must state within the financial statements that they have complied with the Code or, if not, why not. |
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| 2012-10-30 09:02:16 | In an FTSE 350 company, for what period of time are directors appointed before they must seek re-election | in-an-ftse-350-company-for-what-period-of-time-are-directors-appointed-before-they-must-seek-re-election |
In an FTSE 350 company, for what period of time are directors appointed before they must seek re-election (if they wish to be re-elected!)?Answer: In an FTSE 350 company, all directors must retire each year and seek re-election (if they wish to be re-elected) |
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| 2012-10-30 09:02:37 | Insider dealing is a civil offence and is punishable by a fine | insider-dealing-is-a-civil-offence-and-is-punishable-by-a-fine |
“Insider dealing is a civil offence and is punishable by a fine” Is this statement true?Answer: No, insider dealing is a criminal offence and is punishable by a term in prison and / or fine |
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| 2012-10-30 09:03:21 | It is an offence for a person who is an “insider” to use inside knowledge about | it-is-an-offence-for-a-person-who-is-an-insider-to-use-inside-knowledge-about |
“It is an offence for a person who is an “insider” to use inside knowledge about a company and avoid buying shares in the company where they fear the price of the company's shares will fall.” Is this statement true?Answer: No, the offence of insider dealing refers to deals. It does not refer to non-dealing |
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| 2012-10-30 09:03:54 | A person who receives inside knowledge about a company from a director and who deals and makes a profit is guilty of the criminal offence of insider dealing | a-person-who-receives-inside-knowledge-about-a-company-from-a-director-and-who-deals-and-makes-a-profit-is-guilty-of-the-criminal-offence-of-insider-dealing |
“A person who receives inside knowledge about a company from a director and who deals and makes a profit is guilty of the criminal offence of insider dealing” Is this statement true?Answer: It is true if the person knew (or should have known) that the informer was an insider. If they didn't know (or suspect) , then the person is not guilty of the offence |
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| 2012-10-30 09:04:17 | If an insider in possession of unpublished price-sensitive information sells shares and avoids a loss but claims that the sale was to raise money to repay a private debt | if-an-insider-in-possession-of-unpublished-price-sensitive-information-sells-shares-and-avoids-a-loss-but-claims-that-the-sale-was-to-raise-money-to-repay-a-private-debt |
If an insider in possession of unpublished price-sensitive information sells shares and avoids a loss but claims that the sale was to raise money to repay a private debt, is he guilty?Answer: Probably not, if he can persuade the Court that the sale was for reasons other than the avoidance of a loss |
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| 2012-10-30 09:04:44 | What constitutes “unpublished price-sensitive information | what-constitutes-unpublished-price-sensitive-information |
What constitutes “unpublished price-sensitive information”?Answer: Unpublished price-sensitive information is information about a company which is not in the public domain but which, when published, is likely to have a material affect on the market price of the company's securities |
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| 2012-10-30 09:05:27 | Is unpublished price-sensitive information which is greater than 6 months old really price-sensitive | is-unpublished-price-sensitive-information-which-is-greater-than-6-months-old-really-price-sensitive |
Is unpublished price-sensitive information which is greater than 6 months old really price-sensitive?Answer: No, the information should be less than 6 months old |
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| 2012-10-30 09:05:49 | If you were given investment advice by a director to “Get out of equities and invest in Government bonds | if-you-were-given-investment-advice-by-a-director-to-get-out-of-equities-and-invest-in-government-bonds |
If you were given investment advice by a director to “Get out of equities and invest in Government bonds”, would that qualify as passing on unpublished price- sensitive information?Answer: No, to be an offence, the information needs to be specific and not just general investment advice |
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| 2012-10-30 09:07:34 | Money laundering is a three step process | money-laundering-is-a-three-step-process |
Money laundering is a three step process. What are they?Answer: * Placement * Integration * Layering |
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| 2012-10-30 09:08:43 | There are three offences involved in the criminal offence of Money Laundering | there-are-three-offences-involved-in-the-criminal-offence-of-money-laundering |
There are three offences involved in the criminal offence of Money Laundering. What are the three offences?Answer: The three offences in money laundering are: * laundering * failure to report * tipping off |
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| 2012-10-30 09:09:39 | The punishment for money laundering is a prison sentence of up to 14 years and / or a fine | the-punishment-for-money-laundering-is-a-prison-sentence-of-up-to-14-years-and-or-a-fine |
“The punishment for money laundering is a prison sentence of up to 14 years and / or a fine” Is this statement true?Answer: Yes, the punishment for money laundering is a prison sentence of up to 14 years and / or a fine |
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| 2012-10-30 09:09:59 | What is meant by the expression “wrongful trading” | what-is-meant-by-the-expression-wrongful-trading |
What is meant by the expression “wrongful trading”?Answer: “Wrongful trading” is when directors allow the company to continue trading without there being a realistic prospect that it will be able to avoid an insolvent liquidation in the foreseeable future |
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| 2012-10-30 09:10:25 | What is meant by “fraudulent trading” | what-is-meant-by-fraudulent-trading |
What is meant by “fraudulent trading”?Answer: “Fraudulent trading” involves establishing a company with the intention of defrauding creditors |
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| 2012-10-30 09:11:03 | How much time should I spend planning each answer in the F4 law examination | how-much-time-should-i-spend-planning-each-answer-in-the-f4-law-examination |
How much time should I spend planning each answer in the F4 law examination?Answer: Six and a half minutes to try and think of 10 correct, relevant, markable points |
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| 2012-10-30 09:11:47 | What happens if I fail properly to plan my answers | what-happens-if-i-fail-properly-to-plan-my-answers |
What happens if I fail properly to plan my answers in the exam?Answer: My answers will be disjointed and lack professionalism |
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| 2012-11-01 11:08:39 | What are the three main steps in the rational planning model? | what-are-the-three-main-steps-in-the-rational-planning-model-2 |
What are the three main steps in the rational planning model?Answer: Strategic position Strategic choice Implementation (or strategy into action) |
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| 2012-11-01 11:09:38 | What is meant by logical incrementalism? | what-is-meant-by-logical-incrementalism-2 |
What is meant by logical incrementalism?Answer: The idea that planning is best done as a series of relatively small adjustments to past strategies rather than trying to plan radical leaps forward. |
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| 2012-11-01 11:10:20 | What is the performance hierarchy? | 17824 |
What is the performance hierarchy?Answer: The performance hierarchy: * The organisation’s mission * Strategic plans and objectives * Tactical plans and objectives * Operational plans and objectives |
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| 2012-11-01 11:11:02 | What are the differences between strategic control and operational control? | what-are-the-differences-between-strategic-control-and-operational-control |
What are the differences between strategic control and operational control?Answer: Strategic control: monitors the implementation of the organisation’s strategic plans Operational control: monitors the use of existing resources and progress towards existing plans. Will not alter strategic direction |
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| 2012-11-01 11:12:09 | Why do advocates of logical incrementalism think that is a better approach than more radical planning? | why-do-advocates-of-logical-incrementalism-think-that-is-a-better-approach-than-more-radical-planning |
Why do advocates of logical incrementalism think that is a better approach than more radical planning?Answer: Bounded rationality: we do not know (and cannot know) everything that is important to future plans so what is the point in making ambitious plans that rest on guesswork? Additionally, managers do not have time to carefully evaluate all possible combinations of events. |
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| 2012-11-01 11:13:22 | What is freewheeling opportunism? | what-is-freewheeling-opportunism-2 |
What is freewheeling opportunism?Answer: The idea that planning can be inhibiting and that you are better grabbing opportunities as they arise. |
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| 2012-11-01 11:13:54 | List five advantages of strategic planning | list-five-advantages-of-strategic-planning-2 |
List five advantages of strategic planningAny five of: * It forces you to look ahead * Better coordination * Better use of resources * Targets to which all can work * An opportunity to influence the future * Holds out the promise of better times in the future after initial hard work |
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| 2012-11-01 11:15:54 | What are critical success factors? | what-are-critical-success-factors |
What are critical success factors?Answer: Critical success factors (CSFs): Johnson, Scholes & Whittington: 'Those product features that are particularly valued by a group of customers, and, therefore, where the organisation must excel to outperform the competition‘ or: Where an organisation must perform well if it is to succeed. |
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| 2012-11-01 11:16:56 | What are four classifications of critical success factors? | what-are-four-classifications-of-critical-success-factors |
What are four classifications of critical success factors?Answer: * Internal * External * Monitoring * Building |
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| 2012-11-01 11:17:20 | What are monitoring and building critical success factors? | what-are-monitoring-and-building-critical-success-factors |
What are monitoring and building critical success factors?Answer: Monitoring: used to monitor current performance Building: concentrate on what must be achieved in the future |
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| 2012-11-01 11:18:55 | What is usually meant by SMART objectives? | what-is-usually-meant-by-smart-objectives |
What is usually meant by SMART objectives?Answer: S = specific/stated M = measurable A = achievable, agreed, accepted R = relevant (or realistic) T = time-limited |
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| 2012-11-01 11:19:27 | What is gap analysis? | what-is-gap-analysis |
What is gap analysis?Answer: Gap analysis is the difference between what the organisation’s current plans will achieve and what the organisation is required to achieve. |
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| 2012-11-01 11:20:11 | With regards to performance management, what are the special features of multinational companies? | with-regards-to-performance-management-what-are-the-special-features-of-multinational-companies |
With regards to performance management, what are the special features of multinational companies?Answer: Process specialisation: eg concentrate labour in countries with low wage rates Product specialisation: eg different national requirements and ‘tastes’ International trade issues: eg exchange rate fluctuations Political sensitivities: eg particular countries may have particular political risks Administrative issues: the transfer of profits |
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| 2012-11-01 11:20:45 | What are two potential advantages of freewheeling opportunism? | what-are-two-potential-advantages-of-freewheeling-opportunism-2 |
What are two potential advantages of freewheeling opportunism?Answer: Any two of: * fast decisions; * no time or money spent on planning; * not committed to one course of action (flexibility). |
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| 2012-11-01 11:39:29 | What is a PESTEL analysis? | what-is-a-pestel-analysis-2 |
What is a PESTEL analysis?Answer: An environmental analysis considering the influences of: * P olitics, * E conomics, * S ocial trends, * T echnological changes, * E cological (environmental) concerns, * L aws. |
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| 2012-11-01 11:41:39 | What are Porter’s five forces? | 17850 |
What are Porter’s five forces?Answer: * Rivalry/competition, * Threat of new entrants, * Supplier pressure, * Buyer pressure, * Threat of substitutes |
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| 2012-11-01 11:42:28 | Should Porter’s five forces theory be applied to all companies in the country | should-porters-five-forces-theory-be-applied-to-all-companies-in-the-country |
Should Porter’s five forces theory be applied to all companies in the country, an industry, an individual company?Answer: Porter’s five forces should be applied to an industry to judge industry attractiveness |
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| 2012-11-01 11:43:26 | What is a mission statement and what are its main elements? | what-is-a-mission-statement-and-what-are-its-main-elements-2 |
What is a mission statement and what are its main elements?Answer: The prime purpose of a mission statement is to set out the reason for the organisation’s existence. The main sections are often taken to be: purpose, position (in the market), culture, ethics and values. |
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| 2012-11-01 11:47:17 | Draw and annotate Mendelow’s Matrix | draw-and-annotate-mendelows-matrix-2 |
Draw and annotate Mendelow’s Matrix
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| 2012-11-01 11:47:47 | What is a stakeholder? | what-is-a-stakeholder-3 |
What is a stakeholder?Answer: Any person or other organisation affected by an organisation. |
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| 2012-11-01 11:48:24 | Into what three categories can stakeholders be divided (not Mendelow’s classification) | into-what-three-categories-can-stakeholders-be-divided-not-mendelows-classification |
Into what three categories can stakeholders be divided (not Mendelow’s classification)Internal (such as employees), Connected (such as customers,) External (such as local people). |
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| 2012-11-01 11:49:29 | Why is stakeholder analysis important in strategic planning and performance management? | why-is-stakeholder-analysis-important-in-strategic-planning-and-performance-management |
Why is stakeholder analysis important in strategic planning and performance management?Answer: Key player stakeholders can prevent strategies of which they do not approve. The hope is that any strategic plan keeps most of the people happy most of the time (and the key players happy all the time!) |
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| 2012-11-01 11:49:55 | What are the four stages of a typical product life cycle? | what-are-the-four-stages-of-a-typical-product-life-cycle-2 |
What are the four stages of a typical product life cycle?Answer: * Development, * Growth, * Maturity, * Decline. |
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| 2012-11-01 11:51:29 | What are the characteristics of the market that you would expect to see at the mature stage of a product life cycle? | what-are-the-characteristics-of-the-market-that-you-would-expect-to-see-at-the-mature-stage-of-a-product-life-cycle |
What are the characteristics of the market that you would expect to see at the mature stage of a product life cycle?Answer: Fierce competition because the market is not growing. This leads to price pressure and the need to improve specifications to sell to an experienced set of customers. Weaker competitors often drop out and many combine (consolidation) to achieve the economies of scale needed. High profits should be possible for efficient producers (great scale, efficiency and well down the learning curve). |
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| 2012-11-01 11:52:10 | What are the two axes on a Boston Consulting Grid? | what-are-the-two-axes-on-a-boston-consulting-grid-2 |
What are the two axes on a Boston Consulting Grid?Answer: Market growth rate and relative market share (market share/share of market leader) |
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| 2012-11-01 11:53:50 | What are four types of benchmarking? | what-are-four-types-of-benchmarking |
What are four types of benchmarking?Answer: Internal : for example, to previous periods or between different branches. External : to similar businesses or organisations. Can be competitive or non-competitive. Functional : to specific functions in other businesses such as cost per help-line call Generic : to different businesses and organisations. |
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| 2012-11-01 11:56:11 | What are the four quadrants of a BCG matrix and what market share and growth rates do they have? | what-are-the-four-quadrants-of-a-bcg-matrix-and-what-market-share-and-growth-rates-do-they-have-2 |
What are the four quadrants of a BCG matrix and what market share and growth rates do they have?Answer: Problem child (or question mark): high market growth rate, low market share. Star : high market growth rate, high market share. Cash cow : low market growth rate, high market share. Dog : low market growth rate, low market share. |
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| 2012-11-01 11:57:05 | What is the problem with a problem child product or division? | what-is-the-problem-with-a-problem-child-product-or-division-2 |
What is the problem with a problem child product or division?Answer: BCG suggests that only companies with large market shares can survive in the long term so the company has to decide whether to withdraw or to invest to achieve a large market share. Note that niche or focus companies can survive with what looks like a small market share. |
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| 2012-11-01 11:57:43 | In BCG terms, what is meant by a balanced portfolio of products? | 17878 |
In BCG terms, what is meant by a balanced portfolio of products?Answer: Some cash cows to generate lots of cash (but cash cows are heading towards market decline), and some problem children needing investment. The cash generated by the cash cows can be used to build the problem children into star products that will become the cash cows of the future. |
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| 2012-11-01 11:58:19 | What are the primary activities of the value chain? | what-are-the-primary-activities-of-the-value-chain-2 |
What are the primary activities of the value chain?Answer: Inbound logistics, Operations, Outbound logistics, Sales and marketing, Service. |
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| 2012-11-01 11:59:16 | What are the support activities of the value chain? | what-are-the-support-activities-of-the-value-chain-2 |
What are the support activities of the value chain?Answer: Firm infrastructure, Human resource management, Technology development, Procurement |
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| 2012-11-01 11:59:41 | What are Porter’s three generic strategies? | what-are-porters-three-generic-strategies-2 |
What are Porter’s three generic strategies?Answer: * Cost leadership * Differentiation * Focus. |
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| 2012-11-01 12:04:37 | What are the S’s in McKinsey’s 7S model? | what-are-the-ss-in-mckinseys-7s-model |
What are the S’s in McKinsey’s 7S model?Answer: * Structure * Systems * Strategy * Style * Staff * Skills * Shared values |
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| 2012-11-01 12:17:59 | What are the potential benefits of budgeting? | what-are-the-potential-benefits-of-budgeting |
What are the potential benefits of budgeting?Answer: * Planning * Co-ordination * Control * Authorising and delegating * Evaluation of performance * Communicating and motivating |
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| 2012-11-01 12:18:43 | What are the axes of Ansoff’s matrix? | what-are-the-axes-of-ansoffs-matrix-2 |
What are the axes of Ansoff’s matrix?Answer: Products (existing and current); Markets (existing and current) |
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| 2012-11-01 12:19:21 | What can a company do to increase its profits if it stays with existing products and existing markets? | what-can-a-company-do-to-increase-its-profits-if-it-stays-with-existing-products-and-existing-markets-2 |
What can a company do to increase its profits if it stays with existing products and existing markets?Answer: Market penetration, Efficiency gains, Withdrawal, consolidation. |
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| 2012-11-01 12:20:00 | In Ansoff’s matrix, what is moving to a new market with an existing product known as? | in-ansoffs-matrix-what-is-moving-to-a-new-market-with-an-existing-product-known-as-2 |
In Ansoff’s matrix, what is moving to a new market with an existing product known as?Answer: Market development |
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| 2012-11-01 12:20:28 | In Ansoff’s matrix, what is selling a new product to an existing market known as? | in-ansoffs-matrix-what-is-selling-a-new-product-to-an-existing-market-known-as-2 |
In Ansoff’s matrix, what is selling a new product to an existing market known as?Answer: Product development |
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| 2012-11-01 12:20:49 | What are the two classes of diversification? | what-are-the-two-classes-of-diversification-2 |
What are the two classes of diversification?Answer: Related and unrelated diversification. |
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| 2012-11-01 12:21:12 | What is meant by the terms ‘backward integration’ and ‘forward integration’? | what-is-meant-by-the-terms-backward-integration-and-forward-integration-2 |
What is meant by the terms ‘backward integration’ and ‘forward integration’?Answer: Backward integration is taking over (or setting up) a supplier; Forward integration is taking over (or setting up) a customer or supply chain. |
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| 2012-11-01 12:21:55 | What is meant by the term ‘principal budget factor’? | what-is-meant-by-the-term-principal-budget-factor |
What is meant by the term ‘principal budget factor’?Answer: The principal budget factor limits the activity for the budget period. Normally this is the level of sales and therefore the sales budget is usually the first budget to be prepared – this then leads to the others. However, it could be (for example) a limit on the availability of raw materials that limits activity. In this case raw materials would be the principal budget factor, and this would be the first budget to be prepared. |
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| 2012-11-01 12:22:33 | What are fixed, flexed, flexible and rolling budgets? | what-are-fixed-flexed-flexible-and-rolling-budgets |
What are fixed, flexed, flexible and rolling budgets?Answer: Fixed: prepared at the expected level of activity Flexed: adjusted or scaled to that level of activity achieved. Flexible: prepared in advance at several levels of activity Rolling: always looking a set period ahead – typically one year. |
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| 2012-11-01 12:23:21 | What are incremental and zero based budgeting? | what-are-incremental-and-zero-based-budgeting |
What are incremental and zero based budgeting?Answer: Incremental : last year’s budget updated for inflation and any other known changes. ZBB : critically consider each activity on its own merits and draw up the costs and benefits of the different ways of performing it (and indeed whether or not the activity should continue). Then decide on the most effective way of performing each activity. |
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| 2012-11-01 12:24:14 | What is activity based budgeting’? | what-is-activity-based-budgeting |
What is activity based budgeting’?Answer: This is the application of the idea of Activity Based Costing to the process of budgeting, and as such has particular relevance to budgeting for fixed overheads. At the planning stage, attempts are made to identify which activities drive various overheads. Costs are spread over these cost drivers using whatever basis appears to be appropriate in the circumstances. |
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| 2012-11-01 12:24:58 | How difficult should it be to achieve budget targets? | how-difficult-should-it-be-to-achieve-budget-targets |
How difficult should it be to achieve budget targets?Answer: Targets can assist motivation and appraisal if they are set at the right level. If they are too difficult then they will demotivate If they are too easy then managers are less likely to strive for optimal performance Ideally they should be slightly above the anticipated performance level |
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| 2012-11-01 12:25:42 | What are some of the characteristics of budgeting in a not-for-profit organisation? | what-are-some-of-the-characteristics-of-budgeting-in-a-not-for-profit-organisation |
What are some of the characteristics of budgeting in a not-for-profit organisation?Answer: * the organisation may be prevented from borrowing funds or from budgeting for a deficit * the organisation may not be allowed to transfer funds from one budget head to another * the budgeting tends to be just for one financial year (i.e. short-term rather than long-term) * incremental budgeting is the method most widely used |
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| 2012-11-01 12:26:06 | What are three criticisms of traditional budgeting? | what-are-three-criticisms-of-traditional-budgeting |
What are three criticisms of traditional budgeting?Answer: * It takes up a lot of management time * However well the budget is prepared, it rapidly becomes out of date and therefore of less use * It provides a framework for managers to work to and they are therefore less keen to consider innovations (that may mean overspending the budget in the short-term even if good for the long-term). |
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| 2012-11-01 12:27:31 | What are the necessary conditions for the learning effect to occur? | what-are-the-necessary-conditions-for-the-learning-effect-to-occur |
What are the necessary conditions for the learning effect to occur?Answer: * There's a significant manual element in the task being considered. * The task must be repetitive and fairly complex. * Production must be at an early stage so that there is room for improvement. * There must be consistency in the workforce. * There must not be extensive breaks in production, or workers will ‘forget’ the skill. * Workforce is motivated and want to improve. |
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| 2012-11-01 12:27:54 | What is the rule governing the operation of learning curves (Wright’s Law)? | what-is-the-rule-governing-the-operation-of-learning-curves-wrights-law |
What is the rule governing the operation of learning curves (Wright’s Law)?Answer: As cumulative output doubles, the cumulative average time per unit falls to a given percentage of the previous average time per unit. |
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| 2012-11-01 12:28:53 | What limits further learning in the learning curve effect? | 17903 |
What limits further learning in the learning curve effect?Answer: Practical reasons for the learning effect to cease are: * When machine efficiency restricts any further improvement. * A process cannot be speeded up (eg material solidifying) * The workforce reaches its physical limits. * If there is a ‘go-slow’ agreement among the workforce. * Staff turnover |
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| 2012-11-01 12:29:34 | What is a span of control and how does it differ between tall narrow and wide flat structures. | 17904 |
What is a span of control and how does it differ between tall narrow and wide flat structures?Answer: The span of control (SoC) is the number of people directly reporting to a manager. In a tall narrow structure the SoC is low; In a wide flat structure the SoC is large. |
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| 2012-11-01 12:30:15 | What is the name of the business structure which is organised as accounting, manufacturing, sales, IT etc? | what-is-the-name-of-the-business-structure-which-is-organised-as-accounting-manufacturing-sales-it-etc-2 |
What is the name of the business structure which is organised as accounting, manufacturing, sales, IT etc?Answer: This is a functional structure as it organises the business by function (or department). |
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| 2012-11-01 12:30:40 | What are the main ways in which a business can be divisionalised? | what-are-the-main-ways-in-which-a-business-can-be-divisionalised-2 |
What are the main ways in which a business can be divisionalised?Answer: By market and by product |
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| 2012-11-01 12:32:13 | Describe what is meant by the term ‘matrix structure’? | describe-what-is-meant-by-the-term-matrix-structure-2 |
Describe what is meant by the term ‘matrix structure’?Answer: In a matrix structure, each employee has responsibilities to more than one superior. Eg, in project management an engineer could be responsible to the project manager and to the engineering manager. |
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| 2012-11-01 12:32:54 | What is business process re-engineering? | what-is-business-process-re-engineering |
What is business process re-engineering?Answer: Business process reengineering involves re-thinking and radically re-designing of the way an Organisation’s processes operate. It is not simply attempting to improve the existing way of doing things, but starting almost with a blank piece of paper and designing how best to operate the business. |
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| 2012-11-01 12:33:30 | What are the three levels or categories of business process change? | what-are-the-three-levels-or-categories-of-business-process-change-2 |
What are the three levels or categories of business process change?Answer: Automation, rationalisation and business process engineering. |
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| 2012-11-01 12:34:32 | What are five specific characteristics of service industries? | what-are-five-specific-characteristics-of-service-industries |
What are five specific characteristics of service industries?Answer: * perishability * intangibility * simulaneity * heterogeneity * no transfer of ownership |
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| 2012-11-01 12:38:18 | It is sometimes said that information should comply with the acronym ‘ACCURATE’ | it-is-sometimes-said-that-information-should-comply-with-the-acronym-accurate-2 |
It is sometimes said that information should comply with the acronym ‘ACCURATE’.What, typically, do these letters stand for?Answer: A ccurate, C omplete, C ost-beneficial, U nderstandable/user-targeted, R elevant, A daptable/authoritative, T imely, E asy to use. |
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| 2012-11-01 12:40:52 | In information systems what do MIS, DSS, EIS, ERP and ES refer to? | in-information-what-do-mis-dss-eis-erp-and-es-refer-to |
In information systems what do MIS, DSS, EIS, ERP and ES refer to?Answer: MIS = management information system DSS = decision support system EIS = executive information system ERP = enterprise resource planning ES = expert system |
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| 2012-11-01 12:41:50 | What is RFID? | what-is-rfid |
What is RFID?Answer: Radio frequency identification (RFID) is the use of a wireless non-contact system that uses radio-frequency communication to transfer data from a tag attached to an object, for the purposes of identification and tracking. |
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| 2012-11-01 12:42:45 | What is value analysis? | what-is-value-analysis |
What is value analysis?Answer: Value analysis tries to reduce costs whilst still delivering the required standard of quality and reliability. The main distinction is between value added and non-value added activities. Value added activities add value to the customer’s perception of a product; non-value added activities do not add value in the eyes of the customer. Costs that do not add value to the product should be targeted for elimination. |
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| 2012-11-01 12:43:24 | What is the contingency approach to management? | what-is-the-contingency-approach-to-management |
What is the contingency approach to management?Answer: The contingency approach to management accounting is based on the idea that there is no universally appropriate accounting system applicable to all organisations in all circumstances. |
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| 2012-11-01 12:43:44 | What is the difference between ‘risk’ and ‘uncertainty’? | what-is-the-difference-between-risk-and-uncertainty |
What is the difference between ‘risk’ and ‘uncertainty’?Answer: Risk exists where a decision maker has knowledge that several possible outcomes are possible – usually due to past experience. This past experience enables the decision maker to estimate the probability or the likely occurrence of each potential future outcome. Uncertainty exists where the future is unknown and where the decision maker has no past experience on which to base predictions. |
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| 2012-11-01 12:45:21 | What is meant by ‘risk preference’? | what-is-meant-by-risk-preference |
What is meant by ‘risk preference’?Answer: Risk preference relates to attitude to risk. A risk seeker will be interested in the best possible outcome, no matter how small the change that they may occur. Someone who is risk neutral will be concerned with the most likely or ‘average’ outcome. A risk avoider makes decisions on the basis of the worst possible outcomes that may occur. |
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| 2012-11-01 12:46:24 | Explain maximax, maximin and minimax regret | explain-maximax-maximin-and-minimax-regret |
Explain maximax, maximin and minimax regretAnswer: These are attitudes to uncertainty. Maximax : an optimist who expects to get the best possible outcome. Maximin : a pessimist who expects poor outcomes and seeks to limit those. Minimax regret : someone who looks backwards and often wishes a different choice had been made. Decisions are made to so as to minimise possible regrets. |
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| 2012-11-01 12:47:41 | Explain feedback control | explain-feedback-control |
Explain feedback controlFeedback control is where the outputs of a process are measured and information is then provided regarding corrective action, after the outputs have been produced. |
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| 2012-11-01 12:49:07 | Explain feedforward control | explain-feedforward-control |
Explain feedforward controlFeedforward control is where a problem is identified and corrective action taken, before the problem occurs. |
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| 2012-11-01 12:49:51 | Explain negative and positive feedback | explain-negative-and-positive-feedback |
Explain negative and positive feedbackAnswer: Negative feedback is where the control mechanism reduces any deviation from plans. Positive feedback seeks to increase a deviation form plan. Eg to ensure that sales increases are repeated |
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| 2012-11-01 12:50:37 | What are the four main categories for financial performance management? | what-are-the-four-main-categories-for-financial-performance-management |
What are the four main categories for financial performance management?Answer: Profitability – how well a company performs, given its asset base Liquidity – the short term financial position of the company Gearing – the long-term financial position of the company Investors ratios – how well investors will appraise the company |
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| 2012-11-01 12:51:51 | Financial performance measurement depends on comparison | financial-performance-measurement-depends-on-comparison |
Financial performance measurement depends on comparison. What are the main bases for comparison?Answer: * With previous years for the same company * With other similar companies * With industry averages * Also, possibly, between branches or divisions of the same company |
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| 2012-11-01 12:53:16 | What is EBITDA? | what-is-ebitda |
What is EBITDA?Answer: EBITDA stands for ‘earnings before interest, taxes, depreciation and amortisation’. |
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| 2012-11-01 12:54:39 | What are EBITDA's strengths and weaknesses? | what-are-ebitdas-strengths-and-weaknesses |
What are EBITDA's strengths and weaknesses?Answer: Earnings before interest and tax: before interest to measure the profitability before any distributions to providers and capital, and before tax because tax is not under direct control of management. EBITDA additionally considers profit before depreciation and amortisation to approximate to cash flow, as depreciation and amortisation are non-cash expenses. A major criticism of EBITDA is that it fails to consider the amounts required for fixed asset replacement. |
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| 2012-11-01 12:55:36 | What is divisionalisation? | what-is-divisionalisation |
What is divisionalisation?Answer: Divisionalisation is where managers of business areas are given a degree of autonomy over decision making i.e. they are given the authority to make decision without reference to senior management. In effect they are allowed to run their part of the business almost as though it were their own company. |
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| 2012-11-01 12:56:27 | What is a cost centre, a profit centre and an investment centre? | what-is-a-cost-centre-a-profit-centre-and-an-investment-centre |
What is a cost centre, a profit centre and an investment centre?Answer: Cost centre: manager is responsible for only costs Profit centre: manager is responsible for costs and revenues Investment centre: manager is responsible for costs, revenues and investmenr in non-current assets. |
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| 2012-11-01 12:57:51 | Define ‘return on investment’ | define-return-on-investment |
Define ‘return on investment’Answer: Return on investment (ROI) is defined as: controllable divisional profit expressed as a percentage of divisional investment. |
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| 2012-11-01 12:58:29 | Define ‘residual income’? | 17967 |
Define ‘residual income’?Answer: Residual income (RI) is defined as: controllable divisional profit with a deduction of notional (or imputed) interest based on capital employed times cost of capital. |
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| 2012-11-01 12:59:32 | What are the main advantages and disadvantages of using ROI as a measure of divisional performance? | what-are-the-main-advantages-and-disadvantages-of-using-roi-as-a-measure-of-divisional-performance |
What are the main advantages and disadvantages of using ROI as a measure of divisional performance?Answer: Advantages: * Can be used to compare divisions of different sizes. * Acceptable/understandable * Uses readily available accounting figures Disadvantages: * Can lead to dysfunctional decisions * Profits can be manipulated |
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| 2012-11-01 13:00:12 | What are the main advantages and disadvantages of using RI as a measure of divisional performance? | what-are-the-main-advantages-and-disadvantages-of-using-ri-as-a-measure-of-divisional-performance |
What are the main advantages and disadvantages of using RI as a measure of divisional performance?Answer: Advantages: * Gives decisions goal congruent with group wishes * Different rates of interest for divisions of different risks * Uses readily available accounting figures Disadvantages: * Poor for comparing divisions of different sizes * Profits can be manipulated * Less intuitive to ROI |
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| 2012-11-01 13:01:23 | In the Economic Value Added approach, if profits after interest and tax are $10 million, interest is $2 million and the tax rate is 25% | in-the-economic-value-added-approach-if-profits-after-interest-and-tax-are-10-million-interest-is-2-million-and-the-tax-rate-is-25 |
In the Economic Value Added approach, if profits after interest and tax are $10 million, interest is $2 million and the tax rate is 25%, what is NOPAT?Answer: Add back the interest after tax ie $1.5 million so NOPAT is $11.5 million |
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| 2012-11-01 13:02:02 | In the Economic Value Added approach, list five adjustments that are added back to profit after tax to give NOPAT? | in-the-economic-value-added-approach-list-five-adjustments-that-are-added-back-to-profit-after-tax-to-give-nopat |
In the Economic Value Added approach, list five adjustments that are added back to profit after tax to give NOPAT?Answer: * Non-cash expenses * Expenses such as R&D, training and advertising * Provisions * Book depreciation (replaced by economic depreciation) * Goodwill written-off/amortised * Interest on debt capital (after adjusting for tax relief) |
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| 2012-11-01 13:03:01 | What is deducted from NOPAT to give EVA? | what-is-deducted-from-nopat-to-give-eva |
What is deducted from NOPAT to give EVA?Answer: Capital employed x WACC. This is a notional charge for the use of capital |
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| 2012-11-01 13:03:47 | In respect of assessing performance, what did Fitzgerald and Moon suggest are the six dimensions that should be measured | in-respect-of-assessing-performance-what-did-fitzgerald-and-moon-suggest-are-the-six-dimensions-that-should-be-measured |
In respect of assessing performance, what did Fitzgerald and Moon suggest are the six dimensions that should be measured?Answer: * Financial performance * Competitive performance * Quality * Flexibility * Resource utilisation * Innovation |
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| 2012-11-01 13:04:40 | In respect of assessing performance, what did Fitzgerald and Moon suggest are the three building blocks? | in-respect-of-assessing-performance-what-did-fitzgerald-and-moon-suggest-are-the-three-building-blocks |
In respect of assessing performance, what did Fitzgerald and Moon suggest are the three building blocks?Answer: * Dimensions * Standards * Rewards |
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| 2012-11-01 13:06:19 | In respect of assessing performance, what did Fitzgerald and Moon suggest are the components of the building blocks of standards and rewards? | in-respect-of-assessing-performance-what-did-fitzgerald-and-moon-suggest-are-the-components-of-the-building-blocks-of-standards-and-rewards |
In respect of assessing performance, what did Fitzgerald and Moon suggest are the components of the building blocks of standards and rewards?Answer: Standards: ownership, achievability, equity Rewards: clarity, motivation, controllability |
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| 2012-11-01 13:09:51 | What are the four perspectives of Kaplan and Norton’s balanced scorecard? | what-are-the-four-perspectives-of-kaplan-and-nortons-balanced-scorecard |
What are the four perspectives of Kaplan and Norton’s balanced scorecard?Answer: (Present in the proper hierarchy.) * Financial perspective * Customer perspective * Internal business perspective * Innovation and learning perspective |
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| 2012-11-01 13:25:08 | What are the typical problems with performance measurement in the not-for profit sector? | what-are-the-typical-problems-with-performance-measurement-in-the-not-for-profit-sector |
What are the typical problems with performance measurement in the not-for profit sector?Answer: * Multiple objectives * The difficulty of measuring outputs * Financial constraints * Political, social and legal considerations * Little market competition and no profit motive. |
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| 2012-11-01 13:26:07 | What are the 3Es used in performance measurement in not-for profit organisations? | what-are-the-3es-used-in-performance-measurement-in-not-for-profit-organisations |
What are the 3Es used in performance measurement in not-for profit organisations?Answer: * Effectiveness * Efficiency * Economy |
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| 2012-11-01 13:26:53 | What factors should be taken into account when comparing divisional performance? | what-factors-should-be-taken-into-account-when-comparing-divisional-performance |
What factors should be taken into account when comparing divisional performance?Answer: Many factors could be relevant. Here are some: * Transfer prices * Age of assets * Types of business * Location of business * Ability of managers * Controllability of costs, revenues and investment * Allocation of head office charges |
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| 2012-11-01 13:27:55 | What are the three groups of variables that are used in Argenti’s A score for predicting corporate failure? | what-are-the-three-groups-of-variables-that-are-used-in-argentis-a-score-for-predicting-corporate-failure |
What are the three groups of variables that are used in Argenti’s A score for predicting corporate failure?Answer: * Defects * Mistakes * Symptoms |
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| 2012-11-01 13:28:47 | What factors are included under the heading of ‘Defects’ in Argenti’s A score? | what-factors-are-included-under-the-heading-of-defects-in-argentis-a-score |
What factors are included under the heading of ‘Defects’ in Argenti’s A score?Answer: * Chief Executive is an autocrat * Chief Executive is also the chairman * Passive board of directors * Lack of skills balance in the board * Lack of management depth * No budgets or budgetary controls * No cash flow plans * No costing system * Poor response to change |
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| 2012-11-01 13:29:18 | What factors are included under the heading of ‘Mistakes’ in Argenti’s A score? | what-factors-are-included-under-the-heading-of-mistakes-in-argentis-a-score |
What factors are included under the heading of ‘Mistakes’ in Argenti’s A score?Answer: * High gearing * Overtrading * Too much reliance on one big project |
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| 2012-11-01 13:29:51 | What factors are included under the heading of ‘Symptoms’ in Argenti’s A score? | what-factors-are-included-under-the-heading-of-symptoms-in-argentis-a-score |
What factors are included under the heading of ‘Symptoms’ in Argenti’s A score?Answer: * Financial signs (such as the Z score) * Creative Accounting * Non-financial signs (e.g. low morale) * Terminal signs |
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| 2012-11-01 13:30:24 | Name a quantitative and a qualitative model for predicting corporate failure | name-a-quantitative-and-a-qualitative-model-for-predicting-corporate-failure |
Name a quantitative and a qualitative model for predicting corporate failureQuantitative: Altman’s Z score Qualitative: Argenti’s A score |
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| 2012-11-01 13:31:55 | What are six potential problems with performance measurement systems? | what-are-six-potential-problems-with-performance-measurement-systems |
What are six potential problems with performance measurement systems?Answer: * Tunnel vision * Sub-optimisation * Myopia * Measure fixation * Misrepresentation * Gaming * Ossification |
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| 2012-11-01 13:34:14 | What are the costs associated with quality? | what-are-the-costs-associated-with-quality |
What are the costs associated with quality?Answer: Costs of conformance: * Prevention * Appraisal Costs of non-conformance * Internal failure costs * External failure costs |
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| 2012-11-01 13:40:23 | In performance measurement systems what is the potential problem with "tunnel vision" | in-performance-measurement-systems-what-is-the-potential-problem-with-tunnel-vision |
In performance measurement systems what is the potential problem with "tunnel vision"Tunnel vision: Undue focus on performance measures to the detriment of other areas |
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| 2012-11-01 13:41:44 | Define total quality management | define-total-quality-management |
Define total quality managementAnswer: Total quality management: “the continuous improvement in quality, productivity and effectiveness obtained by establishing management responsibility for processes as well as outputs. In this every process has an identified process owner and every person in an entity operates within a process and contributes to its improvement.” |
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| 2012-11-01 13:46:07 | In performance measurement systems what is the potential problem with "Sub-optimisation" | in-performance-measurement-systems-what-is-the-potential-problem-with-sub-optimisation |
In performance measurement systems what is the potential problem with "Sub-optimisation"Sub-optimisation: Undue focus on some objectives resulting in other objectives not being achieved |
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| 2012-11-01 13:46:41 | In performance measurement systems what is the potential problem with "Myopia" | in-performance-measurement-systems-what-is-the-potential-problem-with-myopia |
In performance measurement systems what is the potential problem with "Myopia"Myopia : Focussing on the short-term resulting in the ignoring of the long-term |
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| 2012-11-01 13:47:10 | In performance measurement systems what is the potential problem with "Measure fixation" | in-performance-measurement-systems-what-is-the-potential-problem-with-measure-fixation |
In performance measurement systems what is the potential problem with "Measure fixation"Measure fixation : Behaviour and activities in order to achieve specific performance measures, that may not be effective |
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| 2012-11-01 13:47:45 | In performance measurement systems what is the potential problem with "Misrepresentation" | in-performance-measurement-systems-what-is-the-potential-problem-with-misrepresentation |
In performance measurement systems what is the potential problem with "Misrepresentation"?Misrepresentation: Using creative reporting to suggest that performance measures have been achieved |
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| 2012-11-01 13:48:47 | In performance measurement systems what is the potential problem with "Gaming" | in-performance-measurement-systems-what-is-the-potential-problem-with-gaming |
In performance measurement systems what is the potential problem with "Gaming"Gaming : Deliberate distortion of the measure in order to achieve some strategic advantage. |
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| 2012-11-01 13:49:21 | In performance measurement systems what is the potential problem with "Ossification" | in-performance-measurement-systems-what-is-the-potential-problem-with-ossification |
In performance measurement systems what is the potential problem with "Ossification"Ossification : The unwillingness to change a performance measure scheme once it has been set up. |
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| 2012-11-01 13:54:32 | What methodology is suggested by the six sigma approach for improving quality? | what-methodology-is-suggested-by-the-six-sigma-approach-for-improving-quality |
What methodology is suggested by the six sigma approach for improving quality?Answer: DMAIC: define, measure, analyse, implement, control |
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| 2012-11-01 13:55:54 | What are four potential approaches to environmental accounting? | what-are-four-potential-approaches-to-environmental-accounting |
What are four potential approaches to environmental accounting?Answer: * input / output analysis: record material flows to discover what happens to the material * flow cost accounting: concentrates more on where material losses are occurring within the business * environmental activity based costing: to determine what drives/causes costs * life cycle costing: all costs are taken into account over the product’s life- including costs such as waste disposal. |
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| 2012-11-01 13:56:37 | What is the target costing approach? | what-is-the-target-costing-approach |
What is the target costing approach?Answer: * Identify what a product can be sold at (eg by comparing to competitors’ prices). * Determine the margin required * Work back to the maximum allowable cost * Seek to reduce actual production costs to the maximum allowable cost |
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| 2012-11-01 13:57:19 | What additional factors need to be taken into account when international intra-company transfers are taking place? | what-additional-factors-need-to-be-taken-into-account-when-international-intra-company-transfers-are-taking-place |
What additional factors need to be taken into account when international intra-company transfers are taking place?Answer: * Taxation in the different countries * Import tariffs * Exchange controls * Exchange rates * Anti-dumping legislation * Competitive pressures * Repatriation of funds |
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| 2012-11-01 13:58:32 | What is the ‘rule’ for sensible transfer pricing? | what-is-the-rule-for-sensible-transfer-pricing |
What is the ‘rule’ for sensible transfer pricing? For intra-group transfers to occur:Answer: Transferring out company: transfer price must be no lower than marginal cost plus lost contribution of transferring internally Transferring in company: transfer price must be the lower of net marginal revenue and the outside buy in price. |
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| 2012-11-01 13:59:35 | What are three aims of a good transfer price? | what-are-three-aims-of-a-good-transfer-price |
What are three aims of a good transfer price?Answer: * Goal congruence * Profit for each division (motivation) * Autonomy for each division (head office specifies only the transfer price and then lets divisions make their own decisions. |
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| 2012-11-01 14:00:06 | What are three practical ways of setting a transfer price? | what-are-three-practical-ways-of-setting-a-transfer-price |
What are three practical ways of setting a transfer price?Answer: Cost plus Marginal cost Market prices |
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| 2012-11-01 14:01:01 | List eight sources of external information for an organisation. | list-eight-sources-of-external-information-for-an-organisation |
List eight sources of external information for an organisationAnswer: * Competitors’ and suppliers’ catalogues and web sites * The internet (eg search engines such as Google) * Newspapers, journals, television, radio * Published accounts * The stock exchange * National and market surveys * Government and industry statistics * Discussion with customers * Government publications * Employees * Banks |
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| 2012-11-01 14:01:32 | Describe what is meant by ‘annuity depreciation’? | describe-what-is-meant-by-annuity-depreciation |
Describe what is meant by ‘annuity depreciation’?Answer: The sum of the annual interest charge on the book value of the asset and the annual depreciation is constant throughout the life of the asset. The total annual charge is calculated y dividing the cost of the asset by the appropriate cumulative discount rate. |
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| 2012-11-01 14:02:25 | What are the main differences between information for strategic decisions and information for operational decisions? | what-are-the-main-differences-between-information-for-strategic-decisions-and-information-for-operational-decisions |
What are the main differences between information for strategic decisions and information for operational decisions?Answer: Strategic: often forward looking, highly summarised, often non-routine, estimates, external. Operational: historical, detailed and very accurate, routine, internal. |
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| 2012-11-01 14:03:31 | A company produces 20,000 units of Product A | a-company-produces-20000-units-of-product-a | A company produces 20,000 units of Product A. The product is produced in batches of 1,000 units. The company also produces 50,000 units of Product B and this is produced in batches of 5,000 units. Total set-up costs amount to $90,000. What is the set up cost per unit of Product A and per unit of product B? Answer: Number of set ups = 20,000/1,000 + 50,000/5,000 = 30 Cost per set-up = 90,000/30 = 3,000 For one set-up 1,000 units of A are produced: set-up cost per unit = $3 For one set-up 5,000 units of B are produced: set-up cost per unit = $0.6 | ||||||||||||||||||||||||||||||||||||||||||
| 2012-11-01 14:04:32 | What is a data warehouse and data mining? | what-is-a-data-warehouse-and-data-mining-2 |
What is a data warehouse and data mining?Answer: A data warehouse is a vast collection of historic transaction data (eg, sales by a supermarket). Data mining is searching though that looking for patterns and associations that might be helpful in increasing profits. |
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| 2012-11-01 14:07:09 | What is the expected profit arising from the following and what are the problems using expected values | what-is-the-expected-profit-arising-from-the-following-and-what-are-the-problems-using-expected-values | What is the expected profit arising from the following and what are the problems using expected values in project appraisals? Outcome I p = 0.3 Profit = 3000 Outcome II p = 0.7 Profit = 5000 Answer: 0.3 x 3000 + 0.7 x 5000 = 4400 Problems: How are probabilities estimated The expected value is usually not ‘expected’ Risk is not captured (eg a poor outcome of 3000 is quite possible in the above case) | ||||||||||||||||||||||||||||||||||||||||||
| 2012-11-01 14:44:07 | Draw a single loop feedback system | draw-a-single-loop-feedback-system |
Draw a single loop feedback systemAnswer: |
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| 2012-11-01 14:47:21 | Draw Lynch and Cross’s performance pyramid | draw-lynch-and-crosss-performance-pyramid |
Draw Lynch and Cross’s performance pyramidAnswer: |
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| 2012-11-01 14:48:03 | Draw the performance prism. | draw-the-performance-prism |
Draw the performance prismAnswer: |
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| 2012-11-01 15:55:01 | What is product benchmarking? | what-is-product-benchmarking |
What is product benchmarking?Product benchmarking: comparing specific products with those produced by competitors. |
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| 2012-11-01 15:56:05 | What is financial benchmarking? | what-is-financial-benchmarking |
What is financial benchmarking?Answer: Financial benchmarking: comparing financial performance with that of competitors. |
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| 2012-11-01 15:57:13 | What is strategic benchmarking? | what-is-strategic-benchmarking |
What is strategic benchmarking?Strategic benchmarking: comparing with how other companies compete (not usually industry specific). |
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| 2012-11-16 08:13:12 | What is a sole trader? | what-is-a-sole-trader |
What is a sole trader?Answer: A sole trader is a business owned and operated by one person |
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| 2012-11-16 08:15:19 | What user groups are interested in a company’s financial statements? | what-user-groups-are-interested-in-a-companys-financial-statements |
What user groups are interested in a company’s financial statements?Answer: * Management * Investors and potential investors * Employees * Lenders * Government agencies * Suppliers * Customers * Competitors * The public |
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| 2012-11-16 08:15:55 | What does the Statement of Financial Position show? | what-does-the-statement-of-financial-position-show |
What does the Statement of Financial Position show?Answer: The assets, liabilities and capital of the business – the financial position of the business at one point in time. |
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| 2012-11-16 08:16:24 | What does the Statement of Profit or Loss show? | what-does-the-income-statement-show |
What does the Statement of Profit or Loss show?Answer: The revenues, expenses and profit or loss of the business – the financial performance of the business over a period of time. |
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| 2012-11-16 08:16:49 | What is the definition of an asset? | what-is-the-definition-of-an-asset |
What is the definition of an asset?Answer: An asset is an item owned by the business. |
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| 2012-11-16 08:17:15 | What is the definition of a liability? | what-is-the-definition-of-a-liability |
What is the definition of a liability?Answer: A liability is an item owed by the business. |
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| 2012-11-16 08:17:41 | What is the definition of gross profit? | what-is-the-definition-of-gross-profit |
What is the definition of gross profit?Answer: The gross profit is the sales revenue less the cost of goods sold. |
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| 2012-11-16 08:18:07 | What is the separate entity concept? | what-is-the-separate-entity-concept |
What is the separate entity concept?Answer: The business is treated as separate from its owners. |
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| 2012-11-16 08:18:30 | What is the definition of capital? | what-is-the-definition-of-capital |
What is the definition of capital?Answer: Capital is the amount due to the owner(s) of the business. |
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| 2012-11-16 08:18:57 | What is the definition of drawings (or withdrawals)? | what-is-the-definition-of-drawings-or-withdrawals |
What is the definition of drawings (or withdrawals)?Answer: Drawings is anything taken from the business by a sole trader, whatever he/she chooses to call it. |
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| 2012-11-16 08:19:21 | What are non-current liabilities? | what-are-non-current-liabilities |
What are non-current liabilities?Answer: Non-current liabilities are liabilities payable more than 12 months after the reporting date. |
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| 2012-11-16 08:19:44 | What are current liabilities? | what-are-current-liabilities |
What are current liabilities?Answer: Current liabilities are liabilities payable within 12 months of the reporting date. |
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| 2012-11-16 08:20:08 | What are current assets? | what-are-current-assets |
What are current assets?Answer: Current assets are assets which are expected to be realised in the normal course of trading. |
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| 2012-11-16 08:20:38 | What are non-current assets? | what-are-non-current-assets |
What are non-current assets?Answer: Non-current assets are assets acquired on a long-term basis, not held for resale in the normal course of trading. |
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| 2012-11-16 08:21:03 | What is the accounting equation? | what-is-the-accounting-equation |
What is the accounting equation?Answer: The increase in net assets = capital introduced + profit – drawings |
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| 2012-11-16 08:21:31 | What is meant by net assets? | what-is-meant-by-net-assets |
What is meant by net assets?Answer: Net assets = total assets – total liabilities |
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| 2012-11-16 08:22:37 | Will an increase in an expense be a debit or a credit in the ledger account for the expense? | will-an-increase-in-an-expense-be-a-debit-or-a-credit-in-the-ledger-account-for-the-expense |
Will an increase in an expense be a debit or a credit in the ledger account for the expense?Answer: An increase in an expense is a debit entry in the expense account. |
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| 2012-11-16 08:23:17 | Will an increase in an asset be a debit or a credit in the ledger account for the asset? | will-an-increase-in-an-asset-be-a-debit-or-a-credit-in-the-ledger-account-for-the-asset |
Will an increase in an asset be a debit or a credit in the ledger account for the asset?Answer: An increase in an asset is a debit entry in the asset account. |
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| 2012-11-16 08:23:39 | Will drawings be a debit or a credit entry in the drawings account? | will-drawings-be-a-debit-or-a-credit-entry-in-the-drawings-account |
Will drawings be a debit or a credit entry in the drawings account?Answer: Drawings will be a debit entry in the drawings account. |
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| 2012-11-16 08:24:01 | Will an increase in a liability be a debit of a credit in the ledger account for the liability? | will-an-increase-in-a-liability-be-a-debit-of-a-credit-in-the-ledger-account-for-the-liability |
Will an increase in a liability be a debit of a credit in the ledger account for the liability?Answer: An increase in a liability will be a credit entry in the liability account. |
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| 2012-11-16 08:24:29 | Will an increase in income be a debit or a credit entry in the ledger account for the income? | will-an-increase-in-income-be-a-debit-or-a-credit-entry-in-the-ledger-account-for-the-income |
Will an increase in income be a debit or a credit entry in the ledger account for the income?Answer: An increase in income will be a credit entry in the income account. |
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| 2012-11-16 08:25:04 | Will an increase in capital be a debit or a credit entry in the ledger account for capital? | will-an-increase-in-capital-be-a-debit-or-a-credit-entry-in-the-ledger-account-for-capital |
Will an increase in capital be a debit or a credit entry in the ledger account for capital?Answer: An increase in capital will be a credit entry in the capital account. |
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| 2012-11-16 08:25:28 | What is the double entry for the purchase of goods for resale on credit? | what-is-the-double-entry-for-the-purchase-of-goods-for-resale-on-credit |
What is the double entry for the purchase of goods for resale on credit?Answer: Debit purchases Credit payables |
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| 2012-11-16 08:25:52 | What is the double entry for the sale of goods on credit? | what-is-the-double-entry-for-the-sale-of-goods-on-credit |
What is the double entry for the sale of goods on credit?Answer: Debit receivables Credit sales |
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| 2012-11-16 08:26:18 | What is meant by an early settlement discount? | what-is-meant-by-an-early-settlement-discount |
What is meant by an early settlement discount?Answer: An early settlement is a discount given if payment is made quickly. |
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| 2012-11-16 08:27:53 | What is the main purpose of a trial balance? | what-is-the-main-purpose-of-a-trial-balance |
What is the main purpose of a trial balance?Answer: A trial balance checks that for every debit entry made, there has been an equal credit entry. |
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| 2012-11-16 08:31:56 | Inventory is valued at the lower of | inventory-is-value-at-the-lower-of |
Inventory is valued at the lower of ___ and ___?Answer: Inventory is valued at the lower of cost and net realisable value (NRV) . |
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| 2012-11-16 08:33:25 | In the context of inventory valuation, what is meant by net realisable value? | in-the-context-of-inventory-valuation-what-is-meant-by-net-realisable-value |
In the context of inventory valuation, what is meant by net realisable value?Answer: Net realisable value is the expected selling price less any expected future costs there will be before sale. |
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| 2012-11-16 08:33:55 | What methods of calculating the cost of inventory are allowed by the accounting standard? | what-methods-of-calculating-the-cost-of-inventory-are-allowed-by-the-accounting-standard |
What methods of calculating the cost of inventory are allowed by the accounting standard?Answer: FIFO (first in first out) AVCO (average cost_ Unit cost (actual cost) |
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| 2012-11-16 08:34:30 | Is sales tax a form of direct or indirect taxation? | is-sales-tax-a-form-of-direct-or-indirect-taxation |
Is sales tax a form of direct or indirect taxation?Answer: Sales tax is a form of indirect taxation. |
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| 2012-11-16 08:35:02 | Is input sales tax the tax charged on purchases or the tax charged on sales? | is-input-sales-tax-the-tax-charged-on-purchases-or-the-tax-charged-on-sales |
Is input sales tax the tax charged on purchases or the tax charged on sales?Answer: Input tax is the tax charged on purchases. |
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| 2012-11-16 08:35:33 | Is output sales tax the tax charged on purchases of the tax charged on sales? | is-output-sales-tax-the-tax-charged-on-purchases-of-the-tax-charged-on-sales |
Is output sales tax the tax charged on purchases or the tax charged on sales?Answer: Output tax is the tax charged on sales. |
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| 2012-11-16 08:36:05 | Is the gross selling price the selling price including or excluding sales tax? | is-the-gross-selling-price-the-selling-price-including-or-excluding-sales-tax |
Is the gross selling price the selling price including or excluding sales tax?Answer: The gross selling price is the selling price including sales tax. |
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| 2012-11-16 08:36:36 | Is the net selling price the selling price including or excluding sales tax? | is-the-net-selling-price-the-selling-price-including-or-excluding-sales-tax |
Is the net selling price the selling price including or excluding sales tax?Answer: The net selling price is the selling price excluding sales tax. |
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| 2012-11-16 08:37:27 | What is meant by a prepaid expense? | what-is-meant-by-a-prepaid-expense |
What is meant by a prepaid expense?Answer: A prepaid expense occurs when some of the next years expense has been paid in the current year. |
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| 2012-11-16 08:37:54 | What is meant by accrued income? | what-is-meant-by-accrued-income |
What is meant by accrued income?Answer: Accrued income is income for this year that has not been received by the year end. |
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| 2012-11-16 08:38:18 | What is meant by prepaid income? | what-is-meant-by-prepaid-income |
What is meant by prepaid income?Answer: Prepaid income is income for the next year that has been received in the current year. |
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| 2012-11-16 08:38:44 | What is meant by an irrecoverable debt? | what-is-meant-by-an-irrecoverable-debt |
What is meant by an irrecoverable debt?Answer: An irrecoverable debt is an amount owing to the business that will not be received. |
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| 2012-11-16 08:39:15 | What is the purpose of the allowance for receivables? | what-is-the-purpose-of-the-allowance-for-receivables |
What is the purpose of the allowance for receivables?Answer: The allowance for receivables is made to recognise the possibility that some of the receivables might not be received (because they are doubtful). |
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| 2012-11-16 08:39:37 | What is an aged receivables analysis? | what-is-an-aged-receivables-analysis |
What is an aged receivables analysis?Answer: An aged receivables analysis is a list showing how much each customer owes and how old their debts are. |
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| 2012-11-16 08:39:57 | What is the purpose of an aged receivables analysis? | what-is-the-purpose-of-an-aged-receivables-analysis |
What is the purpose of an aged receivables analysis?Answer: To help keep track of outstanding debts and follow up on any that are overdue. |
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| 2012-11-16 08:40:22 | What is meant by a credit limit? | what-is-meant-by-a-credit-limit |
What is meant by a credit limit?Answer: A credit limit is the maximum amount of credit that the business is prepared to allow to the customer. |
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| 2012-11-16 08:40:46 | What is meant by capital expenditure? | what-is-meant-by-capital-expenditure |
What is meant by capital expenditure?Answer: Capital expenditure refers to the purchase of non-current assets and expenditure that enhances the asset (will appear on the Statement of Financial Position). |
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| 2012-11-16 08:41:09 | What is meant by revenue expenditure? | what-is-meant-by-revenue-expenditure |
What is meant by revenue expenditure?Answer: Revenue expenditure refers to expenses of running the business (will appear on the Income Statement). |
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| 2012-11-16 08:41:31 | What is the difference between tangible and intangible non-current assets? | what-is-the-difference-between-tangible-and-intangible-non-current-assets |
What is the difference between tangible and intangible non-current assets?Answer: Tangible assets can be touched (have a physical substance) e.g. machines, buildings, motor vehicles. Intangible assets cannot be touched (do not have a physical substance) e.g. goodwill, development expenditure. |
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| 2012-11-16 08:41:55 | What is the non-current asset register? | what-is-the-non-current-asset-register |
What is the non-current asset register?Answer: The non-current asset register is a record of the non-current assets held by the business. It is for internal control purposes and is not part of the double entry bookkeeping. |
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| 2012-11-16 08:42:56 | Do we depreciate the Land and Buildings category? | do-we-depreciate-land-and-buildings |
Do we depreciate the Land and Buildings category?Answer: Buildings will be depreciated because they have a limited useful life. Land will not normally be depreciated because it has an unlimited life. |
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| 2012-11-16 08:43:21 | What is the straight-line method of depreciation? | what-is-the-straight-line-method-of-depreciation |
What is the straight-line method of depreciation?Answer: The depreciation charge is the same each year – the cost is spread over the expected useful life. |
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| 2012-11-16 08:45:01 | What is the purpose of depreciation? | what-is-the-purpose-of-depreciation |
What is the purpose of depreciation?Answer: Depreciation is used to reflect the cost of using a non-current asset. It matches the cost of using the assets to the revenues generated by the asset over its useful life. |
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| 2012-11-16 08:46:03 | What is the reducing balance method of depreciation? | what-is-the-reducing-balance-method-of-depreciation |
What is the reducing balance method of depreciation?Answer: A reducing amount of depreciation is charged each year (a fixed percentage of the net book value). |
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| 2012-11-16 09:23:01 | When using the straight-line method of depreciation, what is meant by the term residual value? | when-using-the-straight-line-method-of-depreciation-what-is-meant-by-the-term-residual-value |
When using the straight-line method of depreciation, what is meant by the term residual value?Answer: The residual value of an asset is the estimated disposal value at the end of its useful life. |
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| 2012-11-16 09:23:25 | What is meant by a part-exchange agreement when a non-current asset is disposed of | 18265 |
What is meant by a part-exchange agreement when a non-current asset is disposed of?Answer: A part-exchange agreement is where an old asset is provided in part payment for a new asset, the balance of the cost of the new asset being paid in cash. |
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| 2012-11-16 09:23:53 | What is a goods delivery note? | what-is-a-goods-delivery-note |
What is a goods delivery note?Answer: A delivery note is provided by the supplier and lists the quantity and description of the goods being supplied. |
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| 2012-11-16 09:24:18 | What is a goods received note? | what-is-a-goods-received-note |
What is a goods received note?Answer: A goods received note is prepared by the company receiving the goods, and lists the quantity and description of the goods being received. |
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| 2012-11-16 09:24:44 | What is the difference between a purchase invoice and a sales invoice? | what-is-the-difference-between-a-purchase-invoice-and-a-sales-invoice |
What is the difference between a purchase invoice and a sales invoice?Answer: Both are prepared by the supplier of the goods or services and detail the amount of payment being requested. The supplier calls it a sales invoice, the customer calls it a purchase invoice. |
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| 2012-11-16 09:25:07 | What is a statement? | what-is-a-statement |
What is a statement?Answer: A statement is prepared by the supplier and summarises the amount owing by the customer. |
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| 2012-11-16 09:25:31 | What is a credit note? | what-is-a-credit-note |
What is a credit note?Answer: A credit note is a ‚negative invoice‘ and is prepared by the supplier to cancel a previous invoice (or part of an invoice) because of goods having been returned or because of an overcharge on the invoice. |
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| 2012-11-16 09:25:56 | What is meant by a refund? | what-is-meant-by-a-refund |
What is meant by a refund?Answer: A refund is a repayment of cash previously paid. It can occur for various reasons – e.g. the customer overpaid by mistake; the customer returned goods for which they had already paid. |
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| 2012-11-16 09:26:52 | What is recorded in the purchase day book (or purchase day book)? | what-is-recorded-in-the-purchase-day-book-or-purchase-day-book |
What is recorded in the purchase day book (or purchases journal)?Answer: The purchase day book records all purchases made on credit. |
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| 2012-11-16 09:26:58 | What is recorded in the sales day book (or sales journal)? | what-is-recorded-in-the-sales-day-book-or-sales-journal |
What is recorded in the sales day book (or sales journal)?Answer: The sales day book records all sales made on credit. |
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| 2012-11-16 09:27:49 | What is recorded in the accounts receivable ledger (receivables ledger)? | what-is-recorded-in-the-accounts-receivable-ledger-receivables-ledger |
What is recorded in the accounts receivable ledger (receivables ledger)?Answer: The accounts receivables ledger records the amounts owing by each individual customer. |
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| 2012-11-16 09:28:21 | What is recorded in the accounts payable ledger (payables ledger)? | what-is-recorder-in-the-accounts-payable-ledger-payables-ledger |
What is recorded in the accounts payable ledger (payables ledger)?Answer: The accounts payables ledger records the amounts owing to each individual supplier. |
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| 2012-11-16 09:28:49 | What is the general (or nominal) ledger? | what-is-the-general-or-nominal-ledger |
What is the general (or nominal) ledger?Answer: The general ledger contains all the accounts necessary to produce the financial statements. The double entry is made between these accounts. |
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| 2012-11-16 09:29:11 | What is the receivables ledger control account? | what-is-the-receivables-ledger-control-account |
What is the receivables ledger control account?Answer: The receivables ledger account is an account in the general (nominal) ledger recording the total amount owing from customer. |
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| 2012-11-16 09:29:35 | What is the payables ledger control account? | what-is-the-payables-ledger-control-account |
What is the payables ledger control account?Answer: The payables ledger control account is an account in the general (nominal) ledger recording the total amount owing to suppliers. |
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| 2012-11-16 09:30:10 | What are we trying to achieve when we reconcile the receivables ledger control accounts with the receivables ledger? | what-are-we-trying-to-achieve-when-we-reconcile-the-receivables-ledger-control-accounts-with-the-receivables-ledger |
What are we trying to achieve when we reconcile the receivables ledger control accounts with the receivables ledger?Answer: The balance on the receivables ledger control account should be the same as the total of all the balances on the individual accounts in the accounts receivables ledger. If they are not the same then there must be an error. |
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| 2012-11-16 09:30:38 | What is the purpose of a bank reconciliation? | what-is-the-purpose-of-a-bank-reconciliation |
What is the purpose of a bank reconciliation?Answer: The bank reconciliation is done to check the accuracy of the entries in the cash book (and the accuracy of the bank statement). |
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| 2012-11-16 09:31:14 | What is an outstanding (unpresented) cheque? | what-is-an-outstanding-unpresented-cheque |
What is an outstanding (unpresented) cheque?Answer: An outstanding cheque is one that has been entered in the cash book but has not yet appeared on the bank statement. |
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| 2012-11-16 09:31:46 | What is an uncleared lodgement (or lodgement not yet credited)? | what-is-an-uncleared-lodgement-or-lodgement-not-yet-credited |
What is an uncleared lodgement (or lodgement not yet credited)?Answer: An uncleared lodgement is a receipt that has been entered in the cash book but has not yet appeared on the bank statement. |
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| 2012-11-16 09:32:31 | If a bank statement is showing a debit balance for a company, | if-a-bank-statement-is-showing-a-debit-balance-for-a-company |
If a bank statement is showing a debit balance for a company, does it mean that the company has money at the bank or that the company is overdrawn?Answer: A debit balance on a bank statement means that the company is overdrawn. |
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| 2012-11-16 09:32:56 | What is an overdraft? | what-is-an-overdraft |
What is an overdraft?Answer: An overdraft is a negative balance at the bank (i.e. the company owes money to the bank). |
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| 2012-11-16 09:33:32 | What is an error of omission? | what-is-an-error-of-omission |
What is an error of omission?Answer: An error of omission is a transaction that has not been recorded in the books of the company. |
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| 2012-11-16 09:34:04 | What is an error of commission? | what-is-an-error-of-commission |
What is an error of commission?Answer: An error of commission is when an entry has been posted to the wrong account. |
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| 2012-11-16 09:34:33 | What is an error of principle? | what-is-an-error-of-principle |
What is an error of principle?Answer: An error of principle is when an entry that should have been recorded in an asset account has been recorded in an expense account (or vice versa). |
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| 2012-11-16 09:35:02 | What are compensating errors? | what-are-compensating-errors |
What are compensating errors?Answer: Compensating errors are two or more errors when the net effect is zero. |
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| 2012-11-16 09:35:40 | What is an meant by an error of original entry? | what-is-an-meant-by-an-error-of-original-entry |
What is an meant by an error of original entry?Answer: An error of original entry is when the correct double entry has been made, but where the amount is wrong. |
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| 2012-11-16 09:38:41 | What is the difference between the Statement of Comprehensive Income and the Statement of Profit or Loss | what-is-the-difference-between-the-statement-of-comprehensive-income-and-the-income-statement |
What is the difference between the Statement of Comprehensive Income and the Statement of Profit or Loss?Answer: The Statement of Comprehensive Income is the same as the Statement of Profit or Loss but with the addition of any surplus on revaluation. (For later exams there are other differences, but the above is the only relevant one for this exam.). |
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| 2012-11-16 09:39:26 | What is meant by mark-up? | what-is-meant-by-mark-up |
What is meant by mark-up?Answer: A mark-up is the gross profit expressed as a percentage of the cost of sales. |
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| 2012-11-16 09:39:53 | What is meant by a gross margin? | what-is-meant-by-a-gross-margin |
What is meant by a gross margin?Answer: The gross margin is the gross profit expressed as a percentage of the sales. |
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| 2012-11-16 09:40:20 | What does the Statement of Changes in Equity show? | what-does-the-statement-of-changes-in-equity-show |
What does the Statement of Changes in Equity show?Answer: The Statement of Changes in Equity shows the reasons for the changes in share capital and reserves during the accounting period. |
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| 2012-11-16 09:40:44 | What are the differences between ordinary and preference shares? | what-are-the-differences-between-ordinary-and-preference-shares |
What are the differences between ordinary and preference shares?Answer: Ordinary shares have voting rights – preference shares usually do not. The dividend on ordinary shares is recommended by the directors – preference shares carry a fixed dividend. The ordinary dividend is paid out of profits left after the preference dividend has been paid. |
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| 2012-11-16 09:41:07 | What is a rights issue of shares? | what-is-a-rights-issue-of-shares |
What is a rights issue of shares?Answer: A rights issue is an offer of new shares to existing shareholders in proportion to their existing shareholdings. |
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| 2012-11-16 09:41:36 | What is a bonus (scrip) issue of shares? | what-is-a-bonus-scrip-issue-of-shares |
What is a bonus (scrip) issue of shares?Answer: A bonus issue of shares is an issue of new shares to existing shareholders in proportion to their existing shareholdings, free of charge. No cash is received. |
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| 2012-11-16 09:42:01 | What does the share premium account record? | what-does-the-share-premium-account-record |
What does the share premium account record?Answer: The share premium account records the excess of the amount of cash received from the issue of shares over the nominal (par) value of the shares. |
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| 2012-11-16 09:42:31 | What are capital reserves? | what-are-capital-reserves |
What are capital reserves?Answer: Capital reserves are the share premium account and the revaluation reserve. They represent amounts owing to shareholders, but this amount cannot be paid out as dividend. |
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| 2012-11-16 09:43:02 | What are revenue reserves? | what-are-revenue-reserves |
What are revenue reserves?Answer: Revenue reserves are profits that have been earned (and retained) by the company – retained earnings and general reserve. They represent amounts owing to shareholders that can be paid out as dividend. |
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| 2012-11-16 09:43:33 | In the context of IAS 10 – Events after the reporting period | in-the-context-of-ias-10-events-after-the-reporting-period |
In the context of IAS 10 – Events after the reporting period – what is the treatment of an adjusting event?Answer: The financial statements are amended to reflect the event. |
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| 2012-11-16 09:44:17 | In the context of IAS 10 - what is the treatment of a non-adjusting event? | in-the-context-of-ias-10-what-is-the-treatment-of-a-non-adjusting-event |
In the context of IAS 10 – Events after the reporting period – what is the treatment of a non-adjusting event?Answer: The financial statements are not amended to reflect the event, but it is disclosed by way of a note if material. |
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| 2012-11-16 09:49:25 | What is meant by the term ‚provision‘? | what-is-meant-by-the-term-provision |
What is meant by the term ‚provision‘?Answer: A provision is a liability of uncertain timing or amount. |
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| 2012-11-16 09:49:51 | What is a contingent liability? | what-is-a-contingent-liability |
What is a contingent liability?Answer: A contingent liability is a possible liability that may arise due to past events. |
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| 2012-11-16 09:50:14 | What is a contingent asset? | what-is-a-contingent-asset |
What is a contingent asset?Answer: A contingent asset is a possible asset that may appear due to past events. |
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| 2012-11-16 09:50:47 | How is a contingent liability treated in the Financial Statements if the likelihood of the liability | how-is-a-contingent-liability-treated-in-the-financial-statements-if-the-likelihood-of-the-liability |
How is a contingent liability treated in the Financial Statements if the likelihood of the liability being confirmed is regarded as probable?Answer: It is is probable, then the liability should be provided for in the Financial Statements. |
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| 2012-11-16 09:51:31 | How is a contingent liability treated in the Financial Statements if the likelihood of the liability being confirmed is regarded as possible? | how-is-a-contingent-liability-treated-in-the-financial-statements-if-the-likelihood-of-the-liability-being-confirmed-is-regarded-as-possible |
How is a contingent liability treated in the Financial Statements if the likelihood of the liability being confirmed is regarded as possible?Answer: If it is possible, then the liability should not be provided for in the Financial Statements but should be disclosed by way of note. |
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| 2012-11-16 09:52:01 | How is a contingent liability treated in the Financial Statements if the likelihood of the liability being confirmed is regarded as remote? | how-is-a-contingent-liability-treated-in-the-financial-statements-if-the-likelihood-of-the-liability-being-confirmed-is-regarded-as-remote |
How is a contingent liability treated in the Financial Statements if the likelihood of the liability being confirmed is regarded as remote?Answer: If it is remote, then the liability should not be provided for in the Financial Statements and should not be disclosed by way of note - it is ignored completely. |
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| 2012-11-16 09:52:34 | How is a contingent asset treated in the Financial Statements if the likelihood of the asset being confirmed is regarded as possible? | how-is-a-contingent-asset-treated-in-the-financial-statements-if-the-likelihood-of-the-asset-being-confirmed-is-regarded-as-possible |
How is a contingent asset treated in the Financial Statements if the likelihood of the asset being confirmed is regarded as possible?Answer: If it is possible, then the asset should not be recognised in the Financial Statements and should not be disclosed by way of note – it is ignored completely. |
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| 2012-11-16 09:53:44 | How is a contingent asset treated in the Financial Statements if the likelihood of the asset being confirmed is regarded as probable? | how-is-a-contingent-asset-treated-in-the-financial-statements-if-the-likelihood-of-the-asset-being-confirmed-is-regarded-as-probable |
How is a contingent asset treated in the Financial Statements if the likelihood of the asset being confirmed is regarded as probable?Answer: If it is probable, then the asset should not be recognised in the Financial Statements, but it should be disclosed by way of note. |
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| 2012-11-16 09:54:19 | According to IAS 38 – Intangible assets – how should research be treated in the financial statements? | according-to-ias-38-intangible-assets-how-should-research-be-treated-in-the-financial-statements |
According to IAS 38 – Intangible assets – how should research be treated in the financial statements?Answer: Research costs should be expensed in the Income Statement. |
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| 2012-11-16 09:55:02 | What are the three main headings that will appear on Statement of Cash Flows? | what-are-the-three-main-headings-that-will-appear-on-statement-of-cash-flows |
What are the three main headings that will appear on Statement of Cash Flows?Answer: Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities |
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| 2012-11-16 09:55:36 | What items appear on a Statement of Cash Flows under the heading Investing Activities? | what-items-appear-on-a-statement-of-cash-flows-under-the-heading-investing-activities |
What items appear on a Statement of Cash Flows under the heading Investing Activities?Answer: Cash spent acquiring non-current assets Cash received from the sale of non-current assets Income from investments |
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| 2012-11-16 09:56:07 | What items appear on the Statement of Cash Flows under the heading Financing Activities? | what-items-appear-on-the-statement-of-cash-flows-under-the-heading-financing-activities |
What items appear on the Statement of Cash Flows under the heading Financing Activities?Answer: * Proceeds from the issue of shares * Long term borrowings made or repaid |
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| 2012-11-16 09:56:47 | What is the difference between the Direct and Indirect methods of arriving at the ‚cash generated from operations‘ on a Statement of Cash Flows? | what-is-the-difference-between-the-direct-and-indirect-methods-of-arriving-at-the-cash-generated-from-operations-on-a-statement-of-cash-flows |
What is the difference between the Direct and Indirect methods of arriving at the ‚cash generated from operations‘ on a Statement of Cash Flows?Answer: The direct method shows the actual amount of cash received and cash paid in respect of operations. The indirect method starts with the profit before tax and adjusts it to result in the cash generated. |
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| 2012-11-16 09:57:18 | Will a bonus issue of shares appear on a Statement of Cash Flows? | will-a-bonus-issue-of-shares-appear-on-a-statement-of-cash-flows |
Will a bonus issue of shares appear on a Statement of Cash Flows?Answer: It will not appear because there is no cash received – the shares are issued free. |
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| 2012-11-16 09:57:46 | Will a surplus on revaluation appear on a Statement of Cash Flows? | will-a-surplus-on-revaluation-appear-on-a-statement-of-cash-flows |
Will a surplus on revaluation appear on a Statement of Cash Flows?Answer: It will not appear because there has been no cash received. |
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| 2012-11-16 09:58:08 | Will a rights issue of shares appear on a Statement of Cash Flows? | will-a-rights-issue-of-shares-appear-on-a-statement-of-cash-flows |
Will a rights issue of shares appear on a Statement of Cash Flows?Answer: It will appear under the heading Cash Flows from Financing Activities. |
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| 2012-11-16 09:58:33 | What is the definition of a subsidiary? | what-is-the-definition-of-a-subsidiary |
What is the definition of a subsidiary?Answer: A subsidiary is an entity that it is controlled by another entity (usually with a shareholding of more than 50%). |
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| 2012-11-16 09:59:01 | How is the goodwill arising on consolidation calculated? | how-is-the-goodwill-arising-on-consolidation-calculated |
How is the goodwill arising on consolidation calculated?Answer: It is the difference between the fair value of the subsidiary and the fair value of the net assets of the subsidiary. |
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| 2012-11-16 09:59:38 | In a consolidated Statement of Financial Position, how is the share capital calculated? | in-a-consolidated-statement-of-financial-position-how-is-the-share-capital-calculated |
In a consolidated Statement of Financial Position, how is the share capital calculated?Answer: The share capital is the share capital of the parent company. |
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| 2012-11-16 10:00:06 | In consolidations, under what circumstances will a provision for unrealised profit (PURP) adjustment be necessary? | in-consolidations-under-what-circumstances-will-a-provision-for-unrealised-profit-purp-adjustment-be-necessary |
In consolidations, under what circumstances will a provision for unrealised profit (PURP) adjustment be necessary?Answer: When one company in the group has made sales to the other company, and the other company has some of those goods in inventory at the end of the year. |
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| 2012-11-16 10:00:28 | What is the definition of an associate? | what-is-the-definition-of-an-associate |
What is the definition of an associate?Answer: An associate is an entity over which the investor has significant influence but which is not a subsidiary (usually due to a shareholding of 20% to 50%). |
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| 2013-03-21 13:13:04 | What is meant by the term ‘cost driver’ in the context of activity based costing? | what-is-meant-by-the-term-cost-driver-in-the-context-of-activity-based-costing |
What is meant by the term ‘cost driver’ in the context of activity based costing?Answer: The cost driver is the unit of an activity that causes the activity cost to change. |
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| 2013-03-21 13:13:47 | What are steps involved in calculating a ‘target cost’? | what-are-steps-involved-in-calculating-a-target-cost |
What are steps involved in calculating a ‘target cost’?Answer: In order to calculate a target cost: 1 Determine a realistic selling price 2 Decide on what profit is required 3 Subtract the profit from the selling price to arrive at the target cost. |
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| 2013-03-21 13:14:32 | What is meant by a ‘cost gap’ in the context of target costing? | what-is-meant-by-a-cost-gap-in-the-context-of-target-costing |
What is meant by a ‘cost gap’ in the context of target costing?Answer: The cost gap is the excess of the estimated cost of production over the target cost |
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| 2013-03-21 13:15:32 | What steps might be taken in order to reduce the ‘cost gap’ in the context of target costing? | what-steps-might-be-taken-in-order-to-reduce-the-cost-gap-in-the-context-of-target-costing |
What steps might be taken in order to reduce the ‘cost gap’ in the context of target costing?Answer: Steps to be considered would include: 1) Value analysis - change the design so as to eliminate costs that do not add value in the perception of the customer 2) Cut material costs by reducing wastage 3) Cut labour costs by finding ways of working faster 4) The use of technology to make production more efficient |
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| 2013-03-21 13:16:12 | What is the basic idea of lifecycle costing? | what-is-the-basic-idea-of-lifecycle-costing |
What is the basic idea of lifecycle costing?Answer: The idea of lifecycle costing is to include all costs over the entire life of a product (and hence the estimated profitability) as opposed to costing over one year at a time. |
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| 2013-03-21 13:17:02 | What are the phases in a product’s life cycle? | what-are-the-phases-in-a-products-life-cycle |
What are the phases in a product’s life cycle?Answer: * Development phase * Introduction / launch phase * Growth phase * Maturity phase * Decline phase |
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| 2013-03-21 13:17:50 | What are the main steps that should be considered in order to maximise the return over the life cycle of a product? | what-are-the-main-steps-that-should-be-considered-in-order-to-maximise-the-return-over-the-life-cycle-of-a-product |
What are the main steps that should be considered in order to maximise the return over the life cycle of a product?Answer: 1 Design costs out of the product 2 Minimise the time to market 3 Maximise the length of the life cycle |
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| 2013-03-21 13:18:58 | What are the two main assumptions in throughput accounting? | what-are-the-two-main-assumptions-in-throughput-accounting |
What are the two main assumptions in throughput accounting?Answer: 1) That the company operates following just-in-time principles (i.e. keeping minimum levels of inventory) 2) That in the short term, all costs are fixed other than the cost of materials (i.e. that the only variable cost is materials) |
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| 2013-03-21 13:19:25 | What is meant by the term ‘bottleneck’ in the context of throughput accounting? | what-is-meant-by-the-term-bottleneck-in-the-context-of-throughput-accounting |
What is meant by the term ‘bottleneck’ in the context of throughput accounting?Answer: The bottleneck is the operation that is limited the rate of production |
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| 2013-03-21 13:19:53 | What is the definition of the throughput accounting ratio (TPAR) for a product? | what-is-the-definition-of-the-throughput-accounting-ratio-tpar-for-a-product |
What is the definition of the throughput accounting ratio (TPAR) for a product?Answer: TPAR = throughput contribution per hour / factory cost per hour |
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| 2013-03-21 13:20:28 | In what ways can the throughput accounting ratio of a product be improved? | in-what-ways-can-the-throughput-accounting-ratio-of-a-product-be-improved |
In what ways can the throughput accounting ratio of a product be improved?Answer: 1 Increase the selling price 2 Reduce material cost per unit 3 Reduce the operating expenses 4 Reduce the time required per unit |
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| 2013-03-21 13:20:57 | List four methods that may be used to account for environmental costs. | list-four-methods-that-may-be-used-to-account-for-environmental-costs |
List four methods that may be used to account for environmental costs.Answer: 1 Inout / output analysis 2 Flow cost accounting 3 Life cycle costing 4 Activity based costing |
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| 2013-03-21 13:21:47 | What is meant by the term breakeven sales volume? | what-is-meant-by-the-term-breakeven-sales-volume |
What is meant by the term breakeven sales volume?Answer: The number of units sold at which the profit is zero (i.e. no profit / no loss) |
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| 2013-03-21 13:23:44 | What is meant by the term breakeven sales revenue? | what-is-meant-by-the-term-breakeven-sales-revenue |
What is meant by the term breakeven sales revenue?Answer: The sales revenue at which the profit is zero (i.e. no profit / no loss) |
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| 2013-03-21 14:23:12 | What are the labels of the axes on a breakeven chart? | what-are-the-labels-of-the-axes-on-a-breakeven-chart |
What are the labels of the axes on a breakeven chart?Answer: The vertical axis shows the costs and revenues in $’s. The horizontal axis shows the volume in units. |
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| 2013-03-21 14:24:35 | What are the labels of the axes on a profit volume graph? | what-are-the-labels-of-the-axes-on-a-profit-volume-graph |
What are the labels of the axes on a profit volume graph?Answer: The vertical axis shows the profit (or loss) in $’s. The horizontal axis either shows the volume in units, or the sales revenue in $’s |
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| 2013-03-21 14:24:56 | What is meant by the term ‘margin of safety’? | what-is-meant-by-the-term-margin-of-safety |
What is meant by the term ‘margin of safety’?Answer: The margin of safety is the difference between the budgeted sales volume and the breakeven sales volume. It can be expressed in units, or in $’s of revenue. or as a percentage of the budgeted sales volume. |
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| 2013-03-21 14:25:21 | What is the definition of the CS ratio? | what-is-the-definition-of-the-cs-ratio |
What is the definition of the CS ratio?Answer: The CS ratio = contribution / sales |
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| 2013-03-21 14:25:43 | What is meant by the term shadow cost (or shadow price)? | what-is-meant-by-the-term-shadow-cost-or-shadow-price |
What is meant by the term shadow cost (or shadow price)?Answer: The shadow cost of a resource is the most extra (i.e. the premium) that the business would be prepared to pay for one extra unit of the resource. (calculated as the extra contribution that would be generated by having one extra unit of the resource at its original cost). |
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| 2013-03-21 14:26:07 | What is meant by the market skimming pricing strategy? | what-is-meant-by-the-market-skimming-pricing-strategy |
What is meant by the market skimming pricing strategy?Answer: Market skimming is the strategy of charging a high price when a product is first launched, with the intention of reducing the price over time. (A popular strategy for new technology - rich people are prepared to pay higher prices to be the first to own the new technology) |
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| 2013-03-21 14:27:05 | What is meant by the penetration pricing strategy? | what-is-meant-by-the-penetration-pricing-strategy |
What is meant by the penetration pricing strategy?Answer: Penetration pricing is the strategy of charging a low price when a product is first launched in order to gain market share, with the intention of increasing the price later. |
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| 2013-03-21 14:27:47 | What is meant by volume discounting pricing strategy? | what-is-meant-by-volume-discounting-pricing-strategy |
What is meant by volume discounting pricing strategy?Answer: Volume discounting is the strategy of offering a discount to customers who purchase a large quantity |
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| 2013-03-21 14:28:12 | What is meant by price discrimination? | what-is-meant-by-price-discrimination |
What is meant by price discrimination?Answer: Price discrimination is when the same product or service is sold at different prices in different markets. |
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| 2013-03-21 14:28:36 | What is meant by the term ‘sunk cost’? | what-is-meant-by-the-term-sunk-cost |
What is meant by the term ‘sunk cost’?Answer: A sunk cost is a cost that has already been incurred (and is therefore not affected by any future decision). |
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| 2013-03-21 14:59:00 | What is the difference between risk and uncertainty? | what-is-the-difference-between-risk-and-uncertainty-2 |
What is the difference between risk and uncertainty?Answer: Risk is measurable - several outcomes are possible and the probability of each outcome is known. Uncertainty is not measurable - there are several possible outcomes, but the probabilities of the outcomes are not known. |
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| 2013-03-21 14:59:22 | What is meant by the term ‘expected value’ in the context of decision making under uncertainty? | what-is-meant-by-the-term-expected-value-in-the-context-of-decision-making-under-uncertainty |
What is meant by the term ‘expected value’ in the context of decision making under uncertainty?Answer: The expected value is the weighted average of the possible outcomes, weighted by their respective probabilities. |
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| 2013-03-21 14:59:57 | What are the limitations of using expected values for decision making? | what-are-the-limitations-of-using-expected-values-for-decision-making |
What are the limitations of using expected values for decision making?Answer: 1 It is usually impossible for the probabilities to be estimated accurately 2 For a one-off decision, the actual outcome will not be the expected value 3 Expected values ignore the risk and the decision makers attitude to risk |
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| 2013-03-21 15:00:19 | What is the maximin decision rule? | what-is-the-maximin-decision-rule |
What is the maximin decision rule?Answer: For each course of action, the worst outcome is identified (minimum) The chosen course of action is the one that gives the best (maximum) of the worst outcomes |
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| 2013-03-21 15:00:45 | What is the maximax decision rule? | what-is-the-maximax-decision-rule |
What is the maximax decision rule?Answer: For each course of action, the best outcome is identified (maximum) The chosen course of action is the one that gives the best (maximum) of the best outcomes. |
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| 2013-03-21 15:01:10 | What is the attitude to risk of a decision maker who uses the maximin approach? | what-is-the-attitude-to-risk-of-a-decision-maker-who-uses-the-maximin-approach |
What is the attitude to risk of a decision maker who uses the maximin approach?Answer: The decision maker is a risk avoider |
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| 2013-03-21 15:01:30 | What is the attitude to risk of a decision maker who uses the maximax approach? | what-is-the-attitude-to-risk-of-a-decision-maker-who-uses-the-maximax-approach |
What is the attitude to risk of a decision maker who uses the maximax approach?Answer: The decision maker is a risk seeker.What is the attitude to risk of a decision maker who uses the expected value approach?Answer: The decision maker is said to be risk neutral. |
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| 2013-03-21 15:01:52 | What is the attitude to risk of a decision maker who uses the minimax regret approach? | what-is-the-attitude-to-risk-of-a-decision-maker-who-uses-the-minimax-regret-approach |
What is the attitude to risk of a decision maker who uses the minimax regret approach?Answer: The decision maker is said to be a risk avoider. |
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| 2013-03-21 15:02:16 | What is the difference between sensitivity analysis and simulation? | what-is-the-difference-between-sensitivity-analysis-and-simulation |
What is the difference between sensitivity analysis and simulation?Answer: Sensitivity analysis looks at the effect of changes in just one variable at a time. Simulation attempts to look at the effect of all possible combinations of variables. |
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| 2013-03-21 15:02:55 | What are the principal aims / uses of budgeting? | what-are-the-principal-aims-uses-of-budgeting |
What are the principal aims / uses of budgeting?Answer: * Planning * Control * Communication * Co-ordination * Evaluation * Motivation * Authorisation and delegation |
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| 2013-03-21 15:03:29 | What is the difference between top-down budgeting and bottom-up (or participative) budgeting? | what-is-the-difference-between-top-down-budgeting-and-bottom-up-or-participative-budgeting |
What is the difference between top-down budgeting and bottom-up (or participative) budgeting?Answer: Top-down budgeting is where the budget is imposed on the budget holder Bottom-up budgeting is where the budget holder participates in preparing the budget |
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| 2013-03-21 15:03:52 | What is meant by incremental budgeting? | what-is-meant-by-incremental-budgeting |
What is meant by incremental budgeting?Answer: Incremental budgeting involves taking the results for the previous period and adjusting for inflation and changes in the expected level of activity. |
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| 2013-03-21 15:04:14 | What is meant by a ‘rolling budget’? | what-is-meant-by-a-rolling-budget |
What is meant by a ‘rolling budget’?Answer: Rolling budgets involve always having a budget for the following twelve months, which involves updating the existing budget and adding an additional period (usually month). |
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| 2013-03-21 15:04:39 | What is the difference between feedback and feedforward control? | what-is-the-difference-between-feedback-and-feedforward-control |
What is the difference between feedback and feedforward control?Answer: Feedback control compares actual results with budget. Feedforward control compares budget results with forecast. |
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| 2013-03-21 15:05:13 | Learning curve theory is useful when budgeting for which costs? | learning-curve-theory-is-useful-when-budgeting-for-which-costs |
Learning curve theory is useful when budgeting for which costs?Answer: Learning curve theory allows the average labour time per unit to be estimated and is therefore useful when budgeting costs that vary with the labour time per unit (the cost of labour, and possibly variable overheads if these are incurred on an hourly basis). |
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| 2013-03-21 15:05:35 | In relation to learning curves, what does Wrights Law (or the ‘doubling rule’) state? | in-relation-to-learning-curves-what-does-wrights-law-or-the-doubling-rule-state |
In relation to learning curves, What does Wrights Law (or the ‘doubling rule’) state?Answer: As total output doubles, the average time per unit will fall to a fixed percentage of the previous average time per unit. |
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| 2013-03-21 15:05:59 | What are the main uses of the standard cost of a product? | what-are-the-main-uses-of-the-standard-cost-of-a-product |
What are the main uses of the standard cost of a product?Answer: The main uses are the valuation of inventory, and to act as control (comparing actual with standard costs). |
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| 2013-03-21 15:06:18 | What is a flexed budget? | what-is-a-flexed-budget-2 |
What is a flexed budget?Answer: A flexed budget is where the original budget is re-written for the actual level of activity. |
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| 2013-03-21 15:06:38 | What is the purpose of a flexed budget? | what-is-the-purpose-of-a-flexed-budget |
What is the purpose of a flexed budget?Answer: The purpose of a flexed budget is control - the actual results can be compared with the flexed budget results. |
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| 2013-03-21 15:09:17 | Suggest three possible reasons for the existence of a sales volume variance. | suggest-three-possible-reasons-for-the-existence-of-a-sales-volume-variance |
Suggest three possible reasons for the existence of a sales volume variance.Answer: A higher or lower selling price A change in market share A change in the size of the overall market |
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| 2013-03-21 15:09:38 | Suggest three possible reasons for the existence of a materials price variance. | suggest-three-possible-reasons-for-the-existence-of-a-materials-price-variance |
Suggest three possible reasons for the existence of a materials price variance.Answer: A change in the price charged by the supplier A change of supplier The deliberate purchase of better/worse quality material |
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| 2013-03-21 15:10:03 | Suggest three possible reasons for the existence of a materials usage variance. | suggest-three-possible-reasons-for-the-existence-of-a-materials-usage-variance |
Suggest three possible reasons for the existence of a materials usage variance.Answer: The purchase of better or worse quality materials (resulting in less or more wastage) Greater or lesser efficiency of the production department in controlling waste A change in the mix of materials |
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| 2013-03-21 15:10:30 | Suggest three possible reasons for the existence of a labour efficiency variance. | suggest-three-possible-reasons-for-the-existence-of-a-labour-efficiency-variance |
Suggest three possible reasons for the existence of a labour efficiency variance.Answer: The employment of higher or lower skilled workers. The use of better or worse quality materials More or less training of workers |
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| 2013-03-21 15:10:59 | If absorption costing is being used, what is the cause of a fixed overhead volume variance? | if-absorption-costing-is-being-used-what-is-the-cause-of-a-fixed-overhead-volume-variance |
If absorption costing is being used, what is the cause of a fixed overhead volume variance?Answer: A fixed overhead volume variance arises when the actual production is different from the budgeted production. |
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| 2013-03-21 15:13:56 | What is the purpose of an operating statement? | what-is-the-purpose-of-an-operating-statement |
What is the purpose of an operating statement?Answer: An operating statement is a statement reconciling the actual profit to the budgeted profit, and explaining the reasons for the difference. |
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| 2013-03-21 15:14:17 | When considering planning and operational variances, what is meant by the revised standard cost? | when-considering-planning-and-operational-variances-what-is-meant-by-the-revised-standard-cost |
When considering planning and operational variances, what is meant by the revised standard cost?Answer: The revised standard cost is a realistic standard cost after taking into account permanent changes since the original standard cost was calculated. |
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| 2013-03-21 15:14:41 | What are planning variances measuring? | what-are-planning-variances-measuring |
What are planning variances measuring?Answer: Planning variances are comparing the revised standards with the original standards. |
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| 2013-03-21 15:15:05 | What are operational variances measuring? | what-are-operational-variances-measuring |
What are operational variances measuring?Answer: Operational variances are comparing the actual results with the revised standard. |
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| 2013-03-21 15:15:26 | What is meant by the JIT (just in time) inventory strategy? | what-is-meant-by-the-jit-just-in-time-inventory-strategy |
What is meant by the JIT (just in time) inventory strategy?Answer: JIT involves keeping minimum inventories - producing goods when they are needed and eliminating large inventories of raw materials and finished goods. |
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| 2013-03-21 15:15:46 | What is meant by TQM (total quality management)? | what-is-meant-by-tqm-total-quality-management |
What is meant by TQM (total quality management)?Answer: TQM is a strategy aimed as creating an awareness of quality in all aspects of a business, thus reducing wastage and inefficiencies. |
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| 2013-03-21 15:16:08 | Why is important that non-financial performance is measured rather than concentrating solely on financial performance? | why-is-important-that-non-financial-performance-is-measured-rather-than-concentrating-solely-on-financial-performance |
Why is important that non-financial performance is measured rather than concentrating solely on financial performance?Answer: Non-financial performance measures (such as quality) and important for achieving future growth. Financial measures concentrate on the past rather than the future. |
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| 2013-03-21 15:16:31 | What are characteristics of a service business that distinguish services from manufacturing? | what-are-characteristics-of-a-service-business-that-distinguish-services-from-manufacturing |
What are characteristics of a service business that distinguish services from manufacturing?Answer: Intangibility Simultaneity / inseparability Perishability Heterogenuity No transfer of ownership |
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| 2013-03-21 15:16:56 | What are the three categories of stakeholders in a business? | what-are-the-three-categories-of-stakeholders-in-a-business |
What are the three categories of stakeholders in a business?Answer: Internal (employees, management) Connected (shareholders, suppliers, customers, lenders) External (government, community etc..) |
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| 2013-03-21 15:17:16 | What is mean by the term ‘transfer price’? | what-is-mean-by-the-term-transfer-price |
What is mean by the term ‘transfer price’?Answer: A transfer price is the price at which one division charges another division for goods or services provided. |
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| 2013-03-21 15:18:07 | In the context of divisionalisation,what is meant by a division? | in-the-context-of-divisionalisationwhat-is-meant-by-a-division |
In the context of divisionalisation, what is meant by a division?Answer: A division is an area of the business over which the divisional manager has a degree of autonomy (power to make decisions). |
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| 2013-03-21 15:18:40 | In the context of divisionalisation, what is meant by an ‘investment centre’? | in-the-context-of-divisionalisation-what-is-meant-by-an-investment-centre |
In the context of divisionalisation, what is meant by an ‘investment centre’?Answer: An investment centre is a division for which the divisional manager has control over costs, revenues, and investment in non-current assets and net current assets. |
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| 2013-03-21 15:19:00 | How is the ROI (return on investment) of a division calculated? | how-is-the-roi-return-on-investment-of-a-division-calculated |
How is the ROI (return on investment) of a division calculated?Answer: The ROI is the divisional profit (before interest and tax) as a percentage of the capital invested in the division. |
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| 2013-03-21 15:19:24 | How is the RI (residual income) of a division calculated? | how-is-the-ri-residual-income-of-a-division-calculated |
How is the RI (residual income) of a division calculated?Answer: The RI is the division profit (before interest and tax) less a notional interest charge on the capital invested in the division. |
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| 2013-03-21 15:19:45 | For theoretical transfer pricing, how is the minimum transfer price calculated? | for-theoretical-transfer-pricing-how-is-the-minimum-transfer-price-calculated |
For theoretical transfer pricing, how is the minimum transfer price calculated?Answer: The minimum transfer price is the marginal cost of the transferring division plus any lost contribution. |
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| 2013-03-21 15:20:18 | For theoretical transfer pricing, how is the maximum transfer price calculated? | for-theoretical-transfer-pricing-how-is-the-maximum-transfer-price-calculated |
For theoretical transfer pricing, how is the maximum transfer price calculated?Answer: The maximum transfer price is the lower of: * the selling price less the marginal costs of the receiving division * the price for which the receiving division could buy the goods externally |
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| 2013-03-21 15:20:56 | When measuring Value for Money for a not-for-profit organisation, what are the three E’s? | when-measuring-value-for-money-for-a-not-for-profit-organisation-what-are-the-three-es |
When measuring Value for Money for a not-for-profit organisation, what are the three E’s?Answer: * Economy * Efficiency * Effectiveness |
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| 2013-03-22 12:00:15 | What is the definition of the payback period? | what-is-the-definition-of-the-payback-period |
What is the definition of the payback period?Answer: The payback period is the number of years it takes, in cash terms, to get back the initial investment. |
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| 2013-03-22 12:02:10 | What is meant by the term ‘incremental cost’? | what-is-meant-by-the-term-incremental-cost |
What is meant by the term ‘incremental cost’?Answer: An incremental cost is an extra cost |
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| 2013-03-22 12:02:34 | What is mean by the term ‘sunk cost’? | what-is-mean-by-the-term-sunk-cost |
What is mean by the term ‘sunk cost’?Answer: A sunk cost is a cost that has already been incurred and does not change as a result of the investment decision. It is therefore not relevant. |
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| 2013-03-22 12:03:05 | hat is the definition of the Internal Rate of Return of a project? | hat-is-the-definition-of-the-internal-rate-of-return-of-a-project |
What is the definition of the Internal Rate of Return of a project?Answer: The Internal Rate of Return is that rate of interest at which the Net Present Value of the project is zero. |
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| 2013-03-22 12:03:46 | What is meant by the term ‘annuity’? | what-is-meant-by-the-term-annuity |
What is meant by the term ‘annuity’?Answer: An annuity is an equal cash flow each year. |
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| 2013-03-22 12:04:17 | What is meant by the term ‘perpetuity’? | what-is-meant-by-the-term-perpetuity |
What is meant by the term ‘perpetuity’?Answer: A perpetuity is an equal cash flow each year for ever. |
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| 2013-03-22 12:04:41 | What is meant by the term ‘nominal cash flows’? | what-is-meant-by-the-term-nominal-cash-flows |
What is meant by the term ‘nominal cash flows’?Answer: The nominal cash flows are the actual cash flows after adjusting for inflation. |
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| 2013-03-22 12:05:05 | What is meant by the term ‘real cost of capital’? | what-is-meant-by-the-term-real-cost-of-capital |
What is meant by the term ‘real cost of capital’?Answer: The real cost of capital is the cost of capital ignoring any inflation. (The actual (or nominal) cost of capital is the real cost of capital as adjusted for inflation.) |
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| 2013-03-22 12:05:39 | In asset replacement questions, how is the equivalent annual cost calculated? | in-asset-replacement-questions-how-is-the-equivalent-annual-cost-calculated |
In asset replacement questions, how is the equivalent annual cost calculated?Answer: The equivalent annual cost is the present value of the first replacement cycle divided by the annuity discount factor for the replacement period. |
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| 2013-03-22 12:06:13 | What is meant by the term ‘capital rationing’? | what-is-meant-by-the-term-capital-rationing |
What is meant by the term ‘capital rationing’?Answer: Capital rationing is the situation where there is a limit on the amount of capital available for investment. |
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| 2013-03-22 12:06:36 | What is ‘hard’ capital rationing? | what-is-hard-capital-rationing |
What is ‘hard’ capital rationing?Answer: Hard capital rationing is when capital availability is limited by the amount that lenders are prepared to lend. |
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| 2013-03-22 12:07:00 | What is ‘soft’ capital rationing? | what-is-soft-capital-rationing |
What is ‘soft’ capital rationing?Answer: Soft capital rationing is when the company itself limits the amount that it is prepared to borrow. |
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| 2013-03-22 12:07:26 | What is meant by the term ‘profitability index’? | what-is-meant-by-the-term-profitability-index |
What is meant by the term ‘profitability index’?Answer: The profitability index for a project is the NPV of the project divided by the amount of the initial investment. |
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| 2013-03-22 12:08:06 | What basis are the available projects ranked? | what-basis-are-the-available-projects-ranked |
In the situation of single period capital rationing, when the projects are divisible, on what basis are the available projects ranked?Answer: The projects are ranked on the basis of their profitability index ( = NPV of the project divided by the amount of the initial investment) |
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| 2013-03-22 12:08:37 | What is the difference between ‘risk’ and ‘uncertainty’? | what-is-the-difference-between-risk-and-uncertainty-3 |
What is the difference between ‘risk’ and ‘uncertainty’?Answer: Risk is the situation where there are several possible outcomes and probabilities can be assigned to the outcomes. Uncertainly is the situation where there are several possible outcomes but where probabilities can not be assigned. |
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| 2013-03-22 12:09:00 | What is meant by the sensitivity of a variable in the context of NPV decision making? | what-is-meant-by-the-sensitivity-of-a-variable-in-the-context-of-npv-decision-making |
What is meant by the sensitivity of a variable in the context of NPV decision making?Answer: The sensitivity of a variable is the percentage change in the variable that results in the NPV of the project being zero. |
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| 2013-03-22 12:09:30 | How is the operating cycle (or working capital cycle) calculated? | how-is-the-operating-cycle-or-working-capital-cycle-calculated |
How is the operating cycle (or working capital cycle) calculated?Answer: The operating cycle is the inventory days + receivables days - payables days. |
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| 2013-03-22 12:09:56 | What is over-capitalisation? | what-is-over-capitalisation |
What is over-capitalisation?Answer: Over-capitalisation is the situation where the working capital of a business is too high. |
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| 2013-03-22 12:10:19 | What is overtrading? | what-is-overtrading |
What is overtrading?Answer: Overtrading is where a company expands rapidly but does not have enough capital to fund the required increase in the working capital. This leads to liquidity problems. |
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| 2013-03-22 12:10:46 | What is meant by the economic order quantity (in the context of inventory management)? | what-is-meant-by-the-economic-order-quantity-in-the-context-of-inventory-management |
What is meant by the economic order quantity (in the context of inventory management)?Answer: The economic order quantity is the quantity to order each time that minimises the total costs involved. |
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| 2013-03-22 12:11:08 | What is ‘non-recourse’ factoring? | what-is-non-recourse-factoring |
What is ‘non-recourse’ factoring?Answer: Non-recourse factoring is where the factor suffers any irrecoverable debts (i.e. the company using the factor is guaranteed to have no bad debts). |
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| 2013-03-22 12:11:33 | What is invoice discounting? | what-is-invoice-discounting |
What is invoice discounting?Answer: Invoice discounting is where a particular invoice (or invoices) is used as security for a loan. |
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| 2013-03-22 12:12:22 | List three reasons for a company to hold cash. | list-three-reasons-for-a-company-to-hold-cash |
List three reasons for a company to hold cash.Answer: * Transaction motive * Precautionary motive * Speculative motive |
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| 2013-03-22 12:13:16 | Name two cash management models | name-two-cash-management-models |
Name two cash management models.Answer: * The Baumol model * The Miller-Orr model |
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| 2013-03-22 12:13:43 | What is meant by the aggressive funding of working capital? | what-is-meant-by-the-aggressive-funding-of-working-capital |
What is meant by the aggressive funding of working capital?Answer: Aggressive funding is financing most of the current assets with short-term finance. |
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| 2013-03-22 17:17:05 | What is meant by the conservative funding of working capital? | what-is-meant-by-the-conservative-funding-of-working-capital |
What is meant by the conservative funding of working capital?Answer: Conservative funding is financing most of the current assets with long-term finance. |
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| 2013-03-22 17:18:22 | What are the three types of foreign currency risk? | what-are-the-three-types-of-foreign-currency-risk |
What are the three types of foreign currency risk?Answer: * Translation risk * Transaction risk * Economic risk |
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| 2013-03-22 17:19:36 | For FM exam, What methods of reducing or removing foreign exchange risk are available? | for-paper-f9-what-methods-of-reducing-or-removing-foreign-exchange-risk-are-available |
For FM exam, what methods of reducing or removing foreign exchange risk are available?Answer: * Invoicing in home currency * Netting * Matching * Leading and lagging * Forward rates * Money market hedging * Futures * Options |
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| 2013-03-22 17:20:13 | What is the difference between fixed and floating interest rates? | what-is-the-difference-between-fixed-and-floating-interest-rates |
What is the difference between fixed and floating interest rates?Answer: With fixed interest, the rate of interest is fixed and does not change. With floating interest, the rate of interest changes. |
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| 2013-03-22 17:20:54 | What are four main reasons for differences in the interest rate quoted on loans? | what-are-four-main-reasons-for-differences-in-the-interest-rate-quoted-on-loans |
What are four main reasons for differences in the interest rate quoted on loans?Answer: * The risk * The duration of the loan * The size of the loan * General interest rates (due to factors in the economy) |
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| 2013-03-22 17:21:21 | What does the yield curve show? | what-does-the-yield-curve-show |
What does the yield curve show?Answer: The yield curve shows the relationship between the yield (return) on debt and the time to maturity. |
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| 2013-03-22 17:21:57 | What does an upward sloping yield curve signify about the relationship between interest rates and the length of time to maturity? | what-does-an-upward-sloping-yield-curve-signify-about-the-relationship-between-interest-rates-and-the-length-of-time-to-maturity |
What does an upward sloping yield curve signify about the relationship between interest rates and the length of time to maturity?Answer: It signifies that longer periods to maturity result in higher interest rates. |
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| 2013-03-22 17:23:05 | What is a forward rate agreement (FRA)? | what-is-a-forward-rate-agreement-fra |
What is a forward rate agreement (FRA)?Answer: An FRA is an agreement whereby the interest rate is fixed now for a loan or deposit starting on a future date. |
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| 2013-03-22 17:23:55 | What is an interest rate guarantee (IRG)? | what-is-an-interest-rate-guarantee-irg |
What is an interest rate guarantee (IRG)?Answer: An IRG is an agreement whereby a maximum interest rate is fixed now for a loan starting on a future date (or a minimum interest rate in the case of a deposit starting on a future date). |
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| 2013-03-22 17:24:27 | What is a rights issue of shares? | what-is-a-rights-issue-of-shares-2 |
What is a rights issue of shares?Answer: A rights issue is an issue of new shares offered to existing shareholders. |
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| 2013-03-22 17:25:20 | What is the main reason that a company may consider having a bonus (scrip) issue of shares? | what-is-the-main-reason-that-a-company-may-consider-having-a-bonus-scrip-issue-of-shares |
What is the main reason that a company may consider having a bonus (scrip) issue of shares?Answer: To reduce the market value of their shares on the stock exchange and therefore make them more marketable. |
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| 2013-03-22 17:27:34 | What choices are available to a shareholder who received notification of a rights issue? | what-choices-are-available-to-a-shareholder-who-received-notification-of-a-rights-issue |
What choices are available to a shareholder who received notification of a rights issue?Answer: They can either take up the rights or sell the rights (or any combination) |
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| 2013-03-22 17:28:04 | According to the dividend valuation model, how is the market value of a share determined? | according-to-the-dividend-valuation-model-how-is-the-market-value-of-a-share-determined |
According to the dividend valuation model, how is the market value of a share determined?Answer: The market value of a share is the present value of future dividends, discounted at the shareholders required rate of return. |
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| 2013-03-22 17:36:22 | In the formula for Gordon’s growth approximation (g = br) What do b and r represent? | in-the-formula-for-gordons-growth-approximation-g-br-what-do-b-and-r-represent |
In the formula for Gordon’s growth approximation (g = br)What do b and r represent?Answer: b is the proportion of profits retained in the business r is the return on new investment |
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| 2013-03-22 17:37:12 | What is meant by the systematic risk of an investment? | what-is-meant-by-the-systematic-risk-of-an-investment |
What is meant by the systematic risk of an investment?Answer: Systematic risk is the risk due to general economic factors (such as the rate of inflation). It exists in all investments but the level of systematic risk is different for different types of business (business sectors). This risk cannot be diversified away. |
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| 2013-03-22 17:37:35 | What is meant by unsystematic risk? | what-is-meant-by-unsystematic-risk |
What is meant by unsystematic risk?Answer: Unsystematic risk is the risk due to factors within a particular business. This risk can be diversified away by creating a portfolio of investments. |
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| 2013-03-22 17:38:09 | Capital asset pricing model explains the relationship between the required return from an investment and which type of risk? | capital-asset-pricing-model-explains-the-relationship-between-the-required-return-from-an-investment-and-which-type-of-risk |
Capital asset pricing model explains the relationship between the required return from an investment and which type of risk?Answer: Systematic risk |
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| 2013-03-22 17:38:45 | What is the difference between an asset beta and an equity beta for a business? | what-is-the-difference-between-an-asset-beta-and-an-equity-beta-for-a-business |
What is the difference between an asset beta and an equity beta for a business?Answer: The asset beta measures the risk of the business itself, ignoring the effect of any gearing in the business. The equity beta measures the risk of a share in the business (including the risk resulting from any gearing). |
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| 2013-03-22 17:39:36 | Under what circumstances will the asset beta and the equity beta for a company be the same? | under-what-circumstances-will-the-asset-beta-and-the-equity-beta-for-a-company-be-the-same |
Under what circumstances will the asset beta and the equity beta for a company be the same?Answer: When there is no gearing in the business. |
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| 2013-03-22 17:40:09 | Assuming that there is gearing in business, which will have the higher value - the asset beta or the equity beta? | assuming-that-there-is-gearing-in-business-which-will-have-the-higher-value-the-asset-beta-or-the-equity-beta |
Assuming that there is gearing in business, which will have the higher value - the asset beta or the equity beta?Answer: The equity beta. |
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| 2013-03-22 17:40:48 | What is the difference between redeemable debt borrowing and irredeemable debt borrowing? | what-is-the-difference-between-redeemable-debt-borrowing-and-irredeemable-debt-borrowing |
What is the difference between redeemable debt borrowing and irredeemable debt borrowing?Answer: Redeemable debt is repayable at some future date, irredeemable debt is never repayable. |
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| 2013-03-22 17:41:19 | What is convertible debt? | what-is-convertible-debt |
What is convertible debt?Answer: Debt borrowing where at the date of repayment the investor has the choice of taking cash or a fixed number of shares in the company. |
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| 2013-03-22 17:42:08 | Under what circumstances is it valid to appraise projects at the current weighted average cost of capital (WACC)? | under-what-circumstances-is-it-valid-to-appraise-projects-at-the-current-weighted-average-cost-of-capital-wacc |
Under what circumstances is it valid to appraise projects at the current weighted average cost of capital (WACC)?Answer: When the level of gearing in the company is unchanged, and where the new project has the same level of risk as that currently in the company. |
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| 2013-03-22 17:42:50 | What is the difference between financial gearing and operating gearing? | what-is-the-difference-between-financial-gearing-and-operating-gearing |
What is the difference between financial gearing and operating gearing?Answer: Financial gearing measures the level of debt borrowing (and therefore interest payments) in a business. Operating gearing measures the level of fixed operating costs (as opposed to variable costs) in a business. |
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| 2013-03-22 18:05:19 | According to Modigliani and Miller without tax, | according-to-modigliani-and-miller-without-tax |
According to Modigliani and Miller without tax, What will happen to the weighted average cost of capital as the level of gearing within the business changes?Answer: The weighted average cost of capital will remain constant at all levels of gearing. |
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| 2013-03-22 18:05:48 | According to Modigliani and Miller with tax, | according-to-modigliani-and-miller-with-tax |
According to Modigliani and Miller with tax, What will happen to the weighted average cost of capital as the level of gearing within the business changes?Answer: The weighted average cost of capital will fall with higher levels of gearing. |
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| 2013-03-22 18:06:07 | What is a scrip dividend? | what-is-a-scrip-dividend |
What is a scrip dividend?Answer: A scrip dividend is where the company allows its shareholders to take their dividends in the form of new shares rather than cash. |
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| 2013-03-22 18:06:33 | How is the PE ratio calculated? | how-is-the-pe-ratio-calculated |
How is the PE ratio calculated?Answer: The PE ratio is the market value per share divided by the earnings per share. |
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| 2013-03-22 18:06:53 | What is the significance of a higher PE ratio? | what-is-the-significance-of-a-higher-pe-ratio |
What is the significance of a higher PE ratio?Answer: A higher PE ratio suggests that investors are expecting higher future growth. |
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| 2013-03-22 18:07:32 | What are the three levels of market efficiency? | what-are-the-three-levels-of-market-efficiency |
What are the three levels of market efficiency?Answer: * Weak form efficiency * Semi-strong form efficiency * Strong form efficiency |
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| 2013-03-26 09:06:21 | Adams v Cape Industries | adams-v-cape-industries |
Adams v Cape IndustriesAnswer: Companies are separate legal entities |
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| 2013-03-26 09:53:13 | ADT v BDO | adt-v-bdo |
ADT v BDOAnswer: In tort, auditors are not liable in negligence when someone, unknown to the auditor, relies on the audit opinion to make an investment decision. However, if they rely instead on the oral opinion of the auditor, then the auditor IS potentially liable. |
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| 2013-03-26 09:53:37 | Allen v Gold Reefs of West Africa | allen-v-gold-reefs-of-west-africa |
Allen v Gold Reefs of West AfricaAnswer: The Court WILL allow an alteration to the Articles even though it may adversely affect just one individual shareholder. So long as the alteration is for the benefit of the company as a whole, the Court will allow it |
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| 2013-03-26 09:54:01 | Ashbury Railway Carriage and Iron Co v Riche | ashbury-railway-carriage-and-iron-co-v-riche |
Ashbury Railway Carriage and Iron Co v RicheAnswer: It doesn't matter if ALL the shareholders in a company agree to a course of action; if it is prohibited by the company's constitution then the company cannot pursue that course of action ( it is ultra vires ) |
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| 2013-03-26 09:54:25 | Bamford v Bamford | bamford-v-bamford |
Bamford v BamfordAnswer: Directors should use their powers for a “proper purpose” - shareholders ratified the allotment of new shares to defeat a takeover is valid. Even though the allotment was itself a breach of fiduciary duty, the ratification validated the allotment |
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| 2013-03-26 09:54:46 | Bushell v Faith | bushell-v-faith |
Bushell v FaithAnswer: Weighted voting rights may be written into the constitution of a company effectively preventing alteration ( 2 sisters and little brother ) |
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| 2013-03-26 09:55:07 | Caparo v Dickman | caparo-v-dickman |
Caparo v DickmanAnswer: Auditors owe their duty to the members of the client company as a whole and not to individual members |
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| 2013-03-26 09:55:39 | re City Equitable Fire Insurance Company | re-city-equitable-fire-insurance-company |
re City Equitable Fire Insurance CompanyAnswer: Established the fiduciary duties owed by directors to their company:- 1) must act with reasonable skill and care, 2) should devote such time as is necessary to fulfil their duties, and 3) may delegate so long as there are no grounds for believing the delegate is not capable |
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| 2013-03-26 09:56:00 | Cook v Deeks | cook-v-deeks |
Cook v DeeksAnswer: A minority shareholder can sue the directors on behalf of the company to recover a profit which rightly belongs to the company but which has been diverted by the directors to themselves |
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| 2013-03-26 09:56:21 | Dafen Tinplate v Llanelli Steel | dafen-tinplate-v-llanelli-steel |
Dafen Tinplate v Llanelli SteelAnswer: An alteration to the constitution of a company will only be allowed if the “individual hypothetical member of the future will be equally likely to benefit as be burdened by the alteration“ - an alteration allowing the majority to compulsorily buy out a minority was not allowed |
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| 2013-03-26 09:57:46 | Gilford Motor Company v Horne | gilford-motor-company-v-horne |
Gilford Motor Company v HorneAnswer: An example of the Court lifting the veil of incorporation – husband sets up a sham company to get round a perfectly reasonable restrictive covenant not to compete |
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| 2013-03-26 09:58:15 | DHN v Tower Hamlets | dhn-v-tower-hamlets |
DHN v Tower HamletsAnswer: An example of the Court lifting the veil of incorporation – to determine the commercial reality of a group of companies |
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| 2013-03-26 09:58:43 | Dorchester Finance Company v Stebbing | dorchester-finance-company-v-stebbing |
Dorchester Finance Company v StebbingAnswer: Directors should act with such degree of skill, care and diligence as could reasonably be expected of a person of that age, experience and qualification |
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| 2013-03-26 09:59:09 | Ebrahimi v Westbourne Galleries | ebrahimi-v-westbourne-galleries |
Ebrahimi v Westbourne GalleriesAnswer: In a quasi-partnership company, where a director / quasi-partner is deprived of the right to take part in management, that is a just and equitable ground for the Court to order a compulsory liquidation |
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| 2013-03-26 09:59:31 | Eley v Positive Government Life Assurance Company | eley-v-positive-government-life-assurance-company |
Eley v Positive Government Life Assurance CompanyAnswer: The constitution of a company creates a contract between the company and its members, but only in their capacity as members and not in any other capacity |
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| 2013-03-26 09:59:52 | Erlanger v New Sombrero Phosphate Mining Company | erlanger-v-new-sombrero-phosphate-mining-company |
Erlanger v New Sombrero Phosphate Mining CompanyAnswer: Promoters must disclose profits made by them in the course of promoting a company to the first INDEPENDENT board of directors |
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| 2013-03-26 10:00:19 | Ewing v Buttercup Margarine | ewing-v-buttercup-margarine |
Ewing v Buttercup MargarineAnswer: An example of the tort of passing off – using a name for a company which is similar to an existing company name in a similar business such that confusion is likely to result in the minds of the public |
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| 2013-03-26 10:00:42 | re F G Films | re-f-g-films |
re F G FilmsAnswer: An example of the Court lifting the veil of incorporation – American film company set up to take advantage of British Government's grants to British film companies |
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| 2013-03-26 10:01:03 | Freeman & Lockyer v Buckhurst Park Properties | freeman-lockyer-v-buckhurst-park-properties |
Freeman & Lockyer v Buckhurst Park PropertiesAnswer: Where a person is ( wrongly ) held out as a director of a company by the real directors, the real directors are estopped from denying the authority of the “wrong” director |
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| 2013-03-26 10:01:26 | re German Date Coffee Company | re-german-date-coffee-company |
re German Date Coffee CompanyAnswer: When the substratum of a company has disappeared, that is a ground for the Court to grant a compulsory liquidation order |
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| 2013-03-26 10:02:25 | Greenhalgh v Arderne Cinemas | greenhalgh-v-arderne-cinemas |
Greenhalgh v Arderne CinemasAnswer: Proposed alterations to the constitution must be for the benefit of the company as a whole |
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| 2013-03-26 10:03:49 | Hickman v Kent or Romney Marsh Sheepbreeders | hickman-v-kent-or-romney-marsh-sheepbreeders |
Hickman v Kent or Romney Marsh SheepbreedersAnswer: The constitution of a company acts as a contract between the company and its members. Where a constitution says that disputes are to be settled by arbitration, then the Court will refer the case to arbitration |
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| 2013-03-26 10:04:13 | Hogg v Cramphorn | hogg-v-cramphorn |
Hogg v CramphornAnswer: An issue of shares to prevent an unwelcome takeover bid was a breach of directors' fiduciary duties and whereas it COULD have been ratified by the members in general meeting ( like in Bamford v Bamford ), it wasn't |
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| 2013-03-26 10:04:33 | Howard Smith v Ampol Petroleum | howard-smith-v-ampol-petroleum |
Howard Smith v Ampol PetroleumAnswer: Directors allotting shares to prevent a takeover bid, even though acting in their minds bona fide in the interests of the company, were found to be not acting in the interests of the majority and the allotment was held to be invalid |
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| 2013-03-26 10:04:52 | IDC v Cooley | idc-v-cooley |
IDC v CooleyAnswer: Directors should not take personal advantage of opportunities which “belong” to their company |
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| 2013-03-26 10:05:13 | JEB Fasteners v Marks Bloom | jeb-fasteners-v-marks-bloom |
JEB Fasteners v Marks BloomAnswer: Loss suffered as a result of reliance on a negligent auditor's statement – to be successful in a claim against the auditor it is necessary to show that the whole loss suffered was CAUSED by the reliance and was not due to any other cause |
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| 2013-03-26 10:05:35 | Jubilee Cotton Mills v Lewes | jubilee-cotton-mills-v-lewes |
Jubilee Cotton Mills v LewesAnswer: The date on a certificate of incorporation is CONCLUSIVE proof that that is the date the company was incorporated |
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| 2013-03-26 10:07:14 | Panorama developments v Fidelis Furnishing Fabrics | panorama-developments-v-fidelis-furnishing-fabrics |
Panorama developments v Fidelis Furnishing FabricsAnswer: A company secretary has the apparent / ostensible authority to bind the company in contracts of an administrative nature |
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| 2013-03-26 10:07:32 | Pavlides v Jensen | pavlides-v-jensen |
Pavlides v JensenAnswer: Negligence on the part of the directors is not a ground for action against them to recover profits lost through their negligence |
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| 2013-03-26 10:07:52 | Daniels v Daniels | daniels-v-daniels |
Daniels v DanielsAnswer: Negligence on the part of the directors resulting in a personal profit for those directors is a ground for action against them to recover profits lost through their negligence |
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| 2013-03-26 10:08:16 | Pender v Lushington | pender-v-lushington |
Pender v LushingtonAnswer: The constitution of a company acts as a contract binding the company to its members and its members to the company |
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| 2013-03-26 10:08:39 | R v Oll | r-v-oll |
R v OllAnswer: Lifting the veil to determine the person who made the decision in a situation involving corporate manslaughter |
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| 2013-03-26 10:09:00 | Rose and Frank v Crompton | rose-and-frank-v-crompton |
Rose and Frank v CromptonAnswer: Where a contract specifies that “it shall not be subject to the jurisdiction ….” then it is specifically excluding resorting to legal action to resolve a subsequent dispute |
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| 2013-03-26 10:09:41 | Salomon v Salomon | salomon-v-salomon |
Salomon v SalomonAnswer: The grand-father of company law cases which confirmed the principle that a company, when properly incorporated, is a separate legal entity distinct from those who are beneficially interested in the success or failure of the company and from those who manage its affairs |
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| 2013-03-26 10:10:14 | Southern Foundries v Shirlaw | southern-foundries-v-shirlaw |
Southern Foundries v ShirlawAnswer: A person who loses their position as a director automatically loses their position as chief executive – but compensation for breach of contract may then become payable |
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| 2013-03-26 10:10:38 | Shuttleworth v Cox Brothers | shuttleworth-v-cox-brothers |
Shuttleworth v Cox BrothersAnswer: Where a director is defrauding the company it is allowable to amend the constitution to enable the removal of that director |
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| 2013-03-26 10:11:04 | Sidebottom v Kershaw Leese | sidebottom-v-kershaw-leese |
Sidebottom v Kershaw LeeseAnswer: Where a director is found to be competing against the company it is allowable to amend the constitution to enable the removal of that director |
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| 2013-03-26 10:11:33 | The Wagon Mound | the-wagon-mound |
The Wagon MoundAnswer: The extent of damages is restricted to damage which was reasonably foreseeable |
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| 2013-03-26 10:11:55 | Victoria Laundry v Newman Industries | victoria-laundry-v-newman-industries |
Victoria Laundry v Newman IndustriesAnswer: The extent of damages is restricted to that amount which could have been reasonably foreseeable at the time of the breach |
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| 2013-03-26 10:12:15 | Watteau v Fenwick | watteau-v-fenwick |
Watteau v FenwickAnswer: In the context of agency, an agent who exceeds his authority may nevertheless bind the principal in contracts where the agent could be held to have ostensible / apparent authority |
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| 2013-03-26 10:12:33 | re Yenidje Tobacco | re-yenidje-tobacco |
re Yenidje TobaccoAnswer: Deadlock on the board of directors is a just and equitable ground for the Court to grant a compulsory liquidation order |
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| 2013-03-26 10:12:55 | re Yorkshire Woolcombers | re-yorkshire-woolcombers |
re Yorkshire WoolcombersAnswer: Illustrated the three part steps to determine whether a charge over assets was a floating charge or a fixed charge |
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| 2013-03-26 17:37:26 | In the context of linear programming, what is meant by ‘slack’? | in-the-context-of-linear-programming-what-is-meant-by-slack |
In the context of linear programming, what is meant by ‘slack’?Answer: Slack occurs when the optimum solution uses less of a resource than the maximum that is available. |
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| 2013-03-26 17:37:51 | What is the difference between ‘mark-up’ and ‘margin’? | what-is-the-difference-between-mark-up-and-margin |
What is the difference between ‘mark-up’ and ‘margin’?Answer: Mark-up is the gross profit as a percent of cost. Margin is the gross profit as a percent of sales. |
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| 2013-03-26 17:38:34 | In pricing, how is the price elasticity of demand calculated? | in-pricing-how-is-the-price-elasticity-of-demand-calculated |
In pricing, how is the price elasticity of demand calculated?Answer: The price elasticity of demand is the % change in demand divided by the % change in price. |
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| 2013-03-26 17:39:05 | What is meant by the term ‘critical success factor’? | what-is-meant-by-the-term-critical-success-factor |
What is meant by the term ‘critical success factor’?Answer: Critical success factors are those areas that the business must focus on if it wishes to succeed. |
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| 2013-03-26 17:39:39 | What are ‘key performance indicators’? | what-are-key-performance-indicators |
What are ‘key performance indicators’?Answer: Key performance indicators are the measures used to determine whether or not the critical success factors are being achieved. |
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| 2013-03-26 17:40:13 | What are the four perspectives that the Balanced Scorecard focuses on? | what-are-the-four-perspectives-that-the-balanced-scorecard-focuses-on |
What are the four perspectives that the Balanced Scorecard focuses on?Answer: * Financial * Customer * Internal * Innovation and Learning |
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| 2013-03-26 17:40:56 | What are the six dimensions in Fitzgerald & Moons’ building block model? | what-are-the-six-dimensions-in-fitzgerald-moons-building-block-model |
What are the six dimensions in Fitzgerald & Moons’ building block model?Answer: * Financial performance * Competitive performance * Quality * Flexibility * Resource Utilisation * Innovation |
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| 2013-03-26 17:41:44 | What are the three levels of planning and control in an organisation? | what-are-the-three-levels-of-planning-and-control-in-an-organisation |
What are the three levels of planning and control in an organisation?Answer: * Strategic * Tactical * Operational |
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| 2013-03-26 17:42:29 | When comparing service businesses with manufacturing businesses, what is the relevance of intangibility? | when-comparing-service-businesses-with-manufacturing-businesses-what-is-the-relevance-of-intangibility |
When comparing service businesses with manufacturing businesses, what is the relevance of intangibility?Answer: Services are intangible and it is therefore harder to measure the quality. |
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| 2013-03-26 17:43:07 | When comparing service businesses with manufacturing businesses, What is meant by simultaneity? | when-comparing-service-businesses-with-manufacturing-businesses-what-is-meant-by-simultaneity |
When comparing service businesses with manufacturing businesses, what is meant by simultaneity?Answer: The service is received by the customer at the same time as it is performed. |
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| 2013-03-26 17:44:57 | What is meant by total factory costs for throughput accounting? | what-is-meant-by-total-factory-costs-for-throughput-accounting |
What is meant by total factory costs for throughput accounting?Answer: Total factory costs = all production costs except materials |
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| 2013-03-26 17:45:40 | What is meant by the return per factory hour in throughput accounting? | what-is-meant-by-the-return-per-factory-hour-in-throughput-accounting |
What is meant by the return per factory hour in throughput accounting?Answer:
Return per factory hour = Throughput /Time on key resource |
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| 2013-03-26 17:46:21 | What are the main factors influencing the selling price decision? | what-are-the-main-factors-influencing-the-selling-price-decision |
What are the main factors influencing the selling price decision?Answer: * costs * competitors * customers |
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| 2013-03-26 17:46:49 | What are decision trees? | what-are-decision-trees |
What are decision trees?Answer: Decision trees are diagrammatical representations of the various alternatives and outcomes. They are relevant when using an expected value approach and where there are several decisions to be made. |
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| 2013-03-26 17:47:29 | What is Trend in time series analysis? | what-is-trend-in-time-series-analysis |
What is Trend in time series analysis?Answer: Trend: is the underlying pattern of a time series when the short term fluctuations have been smoothed out. |
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| 2013-03-26 17:50:27 | What are Cyclical Variations in time series analysis? | what-are-cyclical-variations-in-time-series-analysis |
What are Cyclical Variations in time series analysis?Answer: Cyclical Variations are the wave-like appearance of a number of time series graph when taken over a number of years. Generally this correspondents to the influence of booms and slumps in the industry. |
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| 2013-03-26 17:51:15 | What are Seasonal variations in time series analysis? | what-are-seasonal-variations-in-time-series-analysis |
What are Seasonal variations in time series analysis?Answer: Seasonal variations is the regular rise and fall over shorter periods of time. For example, winter hats sales are likely to be higher than average every winter and lower than average every summer |
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| 2013-03-26 17:51:41 | What are the practical reasons for the learning effect to cease? | what-are-the-practical-reasons-for-the-learning-effect-to-cease |
What are the practical reasons for the learning effect to cease?Answer: Practical reasons for the learning effect to cease are: (a) When machine efficiency restricts any further improvement (b) The workforce reach their physical limits (c) If there is a ‘go-slow’ agreement among the workforce |
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| 2013-03-26 17:52:25 | What is Standard costing? | what-is-standard-costing |
What is Standard costing?Answer: Standard costing is a system of accounting based on pre-determined costs and revenue per unit which are used as a benchmark to assess actual performance and therefore provide useful feedback information to management. |
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| 2013-03-26 17:53:08 | What are the uses of standard costing? | what-are-the-uses-of-standard-costing |
What are the uses of standard costing?Answer: Uses of standard costing are: * inventory valuation * as a basis for pricing decisions * for budget preparation * for budgetary control * for performance measurement * for motivating staff using standards as targets |
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| 2013-03-26 17:54:07 | What are the limitations of standard costing? | what-are-the-limitations-of-standard-costing |
What are the limitations of standard costing?Answer: Limitations of standard costing are: • accurate preparation of standards can be difficult • it may be necessary to use different standards for different purposes • less useful if not mass production of standard units * traditional standards are based on company’s own costs where the practices of other organisations are taken into account • can lead to an over-emphasis on quantitative measures of performance at the expense of qualitative measures |
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| 2013-03-26 17:54:51 | List four standards in Standard costing? | list-four-standards-in-standard-costing |
List four standards in Standard costing?Answer: * Ideal standard * Basic standard * Expected standard * Current standard |
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| 2013-03-27 14:20:26 | What is the difference between maximising and satisficing? | what-is-the-difference-between-maximising-and-satisficing |
What is the difference between maximising and satisficing?Answer: Maximising is achieving maximum returns. Satisficing is achieving enough to satisfy shareholders. |
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| 2013-03-27 14:20:49 | What are the determinants of shareholders wealth? | what-are-the-determinants-of-shareholders-wealth |
What are the determinants of shareholders wealth?Answer: Dividends received and the market value of the shares. |
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| 2013-03-27 14:21:36 | What are the three categories of stakeholders? | what-are-the-three-categories-of-stakeholders |
What are the three categories of stakeholders?Answer: * Internal (employees and managers) * Connected (shareholders, lenders, customers, suppliers, competitors) * External (government, communities, regulatory bodies) |
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| 2013-03-27 14:22:08 | What are the three E’s in the measurement of value for money? | what-are-the-three-es-in-the-measurement-of-value-for-money |
What are the three E’s in the measurement of value for money?Answer: * Economy * Efficiency * Effectiveness |
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| 2013-03-27 14:22:29 | What is meant by the Just in Time approach to inventory management? | what-is-meant-by-the-just-in-time-approach-to-inventory-management |
What is meant by the Just in Time approach to inventory management?Answer: The Just in Time approach aims to minimise inventory levels by improving quality and producing to customer order. |
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| 2013-03-27 14:22:49 | What is the Miller-Orr model of cash management? | what-is-the-miller-orr-model-of-cash-management |
What is the Miller-Orr model of cash management?Answer: The model sets upper and lower control limits on cash. Cash in excess of the uppoer limit is transferred to deposit or short-term investments.When the lower limit is reached, cash is withdrawn from deposit. |
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| 2013-03-27 14:23:24 | When using the Miller-Orr formula, what is the relationship between the variance and the standard deviation? | when-using-the-miller-orr-formula-what-is-the-relationship-between-the-variance-and-the-standard-deviation |
When using the Miller-Orr formula, what is the relationship between the variance and the standard deviation?Answer: The variance is the standard deviation squared. |
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| 2013-03-27 14:23:47 | What is meant by purchasing power parity? | what-is-meant-by-purchasing-power-parity |
What is meant by purchasing power parity?Answer: Purchasing power parity assumes that the exchange rate between two currencies depends on the relative inflation rates – that identical goods must cost the same. |
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| 2013-03-27 14:24:08 | What is meant by interest rate parity? | what-is-meant-by-interest-rate-parity |
What is meant by interest rate parity?Answer: Interest rate parity assumes that the exchange rate between two currencies depends on the relative interest rates in the two countries. |
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| 2013-03-27 14:24:34 | What is meant by leading and lagging? | what-is-meant-by-leading-and-lagging |
What is meant by leading and lagging?Answer: Leading is paying early and lagging is delaying payment – depending on the expected movement in the exchange rates. |
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| 2013-03-27 14:24:50 | What is a forward exchange rate? | what-is-a-forward-exchange-rate |
What is a forward exchange rate?Answer: A forward rate is an exchange rate quoted today to apply to conversion of a fixed amount on a fixed future date. |
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| 2013-03-27 14:25:12 | What is Muduraba? | what-is-muduraba |
What is Muduraba?Answer: A Muduraba is a kind of partnership where one partner provides all the capital and the other provides the management. Profits are share in a pre-agreed ratio, but losses are sufferred only by the provider of the capital. |
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| 2013-03-27 14:25:31 | What is Musharaka? | what-is-musharaka |
What is Musharaka?Answer: Musharaka is a relationship between two or more parties who contribute the capital of a business. They share profits in pre-agreed ratios, but they shares losses strictly in proportion to the capital invested. |
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| 2013-03-27 14:25:59 | What is Ijara? | what-is-ijara |
What is Ijara?Answer: Ijara is effectively the same as lease finance. The bank allows the customer to use the asset for a fixed period at a fixed price. The bank is responsible for major maintenance, and the lessee is responsible for general maintenance. |
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| 2013-03-27 14:27:39 | What is venture capital? | what-is-venture-capital |
What is venture capital?Answer: Venture capital is money invested in companies with high-growth potential. The venture capital investors take shares in the company, often contibute to the management, and always intend to grow the company and to then sell their shares. |
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| 2013-03-27 14:27:59 | What is the dividend irrelevancy theory? | what-is-the-dividend-irrelevancy-theory |
What is the dividend irrelevancy theory?Answer: The theory argues that shareholders are indifferent between getting dividends or capital growth and that therefore the level of dividends is irrelevant. |
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| 2013-03-27 14:28:21 | What is the residual theory (in respect of dividend policy)? | what-is-the-residual-theory-in-respect-of-dividend-policy |
What is the residual theory (in respect of dividend policy)?Answer: The residual theory argues that the timing of dividends is irrelevant – that a smaller dividend now will result in more retention and therefore more growth, leading to a larger dividend in the future. |
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| 2013-03-27 14:28:42 | What is the meaning of cum div and ex div share prices? | what-is-the-meaning-of-cum-div-and-ex-div-share-prices |
What is the meaning of cum div and ex div share prices?Answer: A cum div price means that the purchaser of a share will also receive the next dividend. An ex div price means that the purchaser of a share will not receive the next dividend (it will go to the previous owner of the share). |
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| 2013-04-15 17:28:23 | Qualitative characteristics - fundamental | there-are-five-basic-assumptions-which-underlie-the-preparation-of-financial-statements |
What are the two fundamental qualitative characteristics contained with the IASB Conceptual Framework?Answer: The fundamental qualitative characteristics are relevance and faithful representation . |
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| 2013-04-15 17:30:00 | Qualitative characteristics - enhancing | 122553 |
What are the
four
enhancing qualitative characteristics within the IASB Conceptual Framework?
Answer:
The four enhancing qualitative characteristics are:
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| 2013-04-15 17:53:56 | What are the perceived advantages of the standardisation of accounting practices? | what-are-the-perceived-advantages-of-the-standardisation-of-accounting-practices | What are the perceived advantages of the standardisation of accounting practices? Answer: Standardised accounting practices: * provide a focal point for debate * require disclosure of policies adopted * encourage global discussion * are flexible * enable meaningful comparison * reduce the penumbral areas of divergent possibilities | ||||||||||||||||||||||||||||||||||||||||||
| 2013-04-15 17:55:53 | What are the perceived disadvantages of the standardisation of accounting practices? | what-are-the-perceived-disadvantages-of-the-standardisation-of-accounting-practices | What are the perceived disadvantages of the standardisation of accounting practices? Answer: Perceived disadvantages of standardising accounting practices include: * pressure groups may succeed in asking for amendments thus reducing comparability * inflexibility leading to possible inappropriate accounting treatment * introduction of rules removes the concepts of skill and judgement | ||||||||||||||||||||||||||||||||||||||||||
| 2013-04-15 17:57:06 | Financial statements - IAS 1 | 122556 |
Per IAS 1, a complete set of financial statements comprise of which financial statements?
Answer:
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| 2013-04-15 18:01:38 | Change in accounting estimate (1) | in-the-context-of-a-change-in-accounting-estimate |
In the context of a change in accounting estimate, it is NOT necessary to restate the opening balances nor last year's financial statements.Is the following statement true?Answer: The statement is TRUE. A change in accounting estimate is applied prospectively, i.e. to the current period and future periods. It is NOT necessary to restate the opening figures nor last year's financial statements |
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| 2013-04-15 18:08:24 | Change in accounting estimate (2) | in-the-context-of-a-change-in-accounting-estimate-it-is-necessary-to-restate-the-opening-balances |
In the context of a change in accounting estimate, it is necessary to restate the opening balances and last year's financial statements.Is the above statement true?The statement is not true. In the context of a change in accounting estimate, it is not necessary to restate the opening figures or last year's financial statements. The change in estimate applies only prospectively and not retrospectively. A change in accounting policy or prior year error requires the opening balances to be restated. |
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| 2013-04-15 18:09:16 | Change in accounting policy (1) | 122566 |
In the context of a change in accounting policy, it is necessary to restate the opening figures.Is the above statement true?The statement is TRUE. In the context of a change in accounting policy, it is necessary to restate the opening figures and last year's financial statements. |
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| 2013-04-15 18:10:04 | Change in accounting policy (3) | 122567 |
In the context of a change in accounting policy, it is NOT necessary to restate the opening figures nor last year's financial statements.Is the above statement true?The statement is NOT true. In the context of a change in accounting policy, it is necessary to restate the opening figures and last year's financial statements. The effect of the change is that the financial statements should reflect the position as if the new policy had always been in operation. |
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| 2013-04-15 18:13:07 | Change an accounting policy (2) | 122569 |
When is a change an accounting policy permitted?Answer:
IAS 8 [14] Information is usually reliable and more relevant when there is a change in recognition, presentation or measurement. |
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| 2013-04-15 18:14:39 | Non-current asset held for sale (2) | for-an-asset-to-be-classed-as-held-for-sale |
For a non-current asset to be classed as “held for sale” it should be available for sale within the period three months to six months after being so classified.Is the above statement true?The statement is not true. To be classed as “held for sale” it should be available for immediate sale |
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| 2013-04-15 18:15:54 | Non-current assets held-for-sale (1) | when-an-asset-is-classed-as-held-for-sale |
When an asset is classed as “held for sale” not only must management be committed to the sale but in addition there must be plans actively to market the asset within the next three monthsIs the above statement true?No, it is not true. Not only must management be committed to the sale but an active programme to locate a buyer must have been started. |
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| 2013-04-15 18:16:56 | A discontinued operation (not having been classed as an asset held for sale) | a-discontinued-operation-not-having-been-classed-as-an-asset-held-for-sale |
A discontinued operation (not having been classed as an asset held for sale) is one which is being disposed of.Is the following statement true? No, it is not true. A discontinued operation (not having been classed as an asset held for sale) is one which HAS BEEN disposed of |
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| 2013-04-18 22:02:59 | A subsidiary which is classed as an asset held for sale is excluded from the group accounts prepared by the parent. | a-subsidiary-which-is-classed-as-an-asset-held-for-sale-is-excluded-from-the-group-accounts-prepared-by-the-parent |
A subsidiary which is classed as an asset held for sale is excluded from the group accounts prepared by the parent. Is the following statement true?Answer: Yes, the statement is true. In fact, it's the ONLY reason identified by IFRS for the exclusion of a subsidiary from the group financial statements |
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| 2013-04-18 22:14:50 | If an investor is exposed to, or has the rights to, variable returns | if-an-investor-is-exposed-to-or-has-the-rights-to-variable-returns |
If an investor is exposed to, or has the rights to, variable returns from its investment and has the ability to affect those returns, does that indicate control by the investor over the investee?Is the following statement true? Yes, under IFRS 10, where the investor is so exposed to or has such rights, this indicates control and therefore the requirement to incorporate the investee's results as a subsidiary |
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| 2013-04-18 22:15:35 | Where an investor holds shares in another company representing greater than 50% of the voting rights in a general meeting of that other company, the investor must always incorporate the results of the investee company in a set of group financial statements. | where-an-investor-holds-shares-in-another-company-representing-greater-than-50-of-the-voting-rights-in-a-general-meeting-of-that-other-company-the-investor-must-always-incorporate-the-results-of-the |
Where an investor holds shares in another company representing greater than 50% of the voting rights in a general meeting of that other company, the investor must always incorporate the results of the investee company in a set of group financial statements.Is the following statement true? No, it's NOT true. The holding of greater than 50% of the voting rights does not automatically represent control. |
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| 2013-04-18 22:19:12 | If a liquidator has been appointed to the subsidiary, | if-a-liquidator-has-been-appointed-to-the-subsidiary |
If a liquidator has been appointed to the subsidiary, this represents a loss of control and therefore the statement of financial position of the subsidiary is not included within the consolidated financial statements.Is the following statement true? Yes, the statement is true. A subsidiary is “a company which is under the control of another” and, if control has now been lost to a liquidator, then it is no longer a subsidiary |
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| 2013-04-18 22:20:15 | If a lender has, within the loan agreement, the right to appoint | if-a-lender-has-within-the-loan-agreement-the-right-to-appoint |
If a lender has, within the loan agreement, the right to appoint a majority of the board of directors of a subsidiary, this represents a loss of control and therefore the statement of financial position of the subsidiary is not included within the consolidated financial statements.Is the following statement true?Answer: Yes, the statement is true. A subsidiary is “a company which is under the control of another” and, if control has now been lost to a lender, then it is no longer a subsidiary |
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| 2013-04-18 22:20:46 | If a foreign government takes possession of the assets of an overseas subsidiary, this represents a loss of control | if-a-foreign-government-takes-possession-of-the-assets-of-an-overseas-subsidiary-this-represents-a-loss-of-control |
If a foreign government takes possession of the assets of an overseas subsidiary, this represents a loss of control and therefore the statement of financial position of the subsidiary is not included within the consolidated financial statements.Is the following statement true?Answer: Yes, the statement is true. A subsidiary is “a company which is under the control of another” and, if control has now been lost to the foreign government, then it is no longer a subsidiary |
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| 2013-04-18 22:21:25 | If a foreign government imposes severe restrictions on an overseas subsidiary, this represents a loss | if-a-foreign-government-imposes-severe-restrictions-on-an-overseas-subsidiary-this-represents-a-loss |
If a foreign government imposes severe restrictions on an overseas subsidiary, this represents a loss of control and therefore the statement of financial position of the subsidiary is not included within the consolidated financial statements.Is the following statement true?Answer: Yes, the statement is true. A subsidiary is “a company which is under the control of another” and, if control has now been lost to the foreign government, then it is no longer a subsidiary |
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| 2013-04-18 22:22:00 | When preparing the consolidated statement of financial position and a subsidiary has been | when-preparing-the-consolidated-statement-of-financial-position-and-a-subsidiary-has-been |
When preparing the consolidated statement of financial position and a subsidiary has been acquired part way through the year, the subsidiary's statement of financial position needs to be time apportioned to reflect only the post-acquisition periodIs the following statement true?Answer: No, it is not true. The subsidiary's statement of financial position is “as at a moment in time” and, by definition, this must be post acquisition |
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| 2013-04-18 22:22:29 | When a company holds 35% of another company's shares and voting rights, then the investee | when-a-company-holds-35-of-another-companys-shares-and-voting-rights-then-the-investee |
When a company holds 35% of another company's shares and voting rights, then the investee will always be treated as an associate company using equity accounting principlesIs the following statement true?Answer: No, it is not ALWAYS true. If the other 65% are held by another party, the 35% holder has no influence and would therefore treat the investment as though it were merely an investment and account for the dividend stream from that investment |
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| 2013-04-18 22:22:56 | When a company holds 35% of another company's shares and voting rights and the remaining 65% are spread over | when-a-company-holds-35-of-another-companys-shares-and-voting-rights-and-the-remaining-65-are-spread-over |
When a company holds 35% of another company's shares and voting rights and the remaining 65% are spread over a large number of small investors, then the investee will always be treated as an associate company using equity accounting principlesIs the following statement true?Answer: No, it is not ALWAYS true. Where the disposition of the remaining shares is wide-spread, the holding of 35% COULD represent effective control in which case it could fall to be consolidated as a subsidiary as explained in IFRS 10 |
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| 2013-04-18 22:24:01 | When calculating Goodwill in working 2, I know I have made a mistake | when-calculating-goodwill-in-working-2-i-know-i-have-made-a-mistake |
When calculating Goodwill in working 2, I know I have made a mistake if the figure is negative.Is the following statement true?Answer: No, it is not necessarily true. Where the fair value of the subsidiary's net assets at the date of acquisition exceeds the “value” of the subsidiary, then negative goodwill will be the result |
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| 2013-04-18 22:24:42 | Negative goodwill appears on the consolidated statement of financial position as a Long Term Liability | negative-goodwill-appears-on-the-consolidated-statement-of-financial-position-as-a-long-term-liability |
Negative goodwill appears on the consolidated statement of financial position as a Long Term Liability and is amortised over the estimated period of time that will benefit from this negative goodwillIs the following statement true?Answer: No, it is not true. Negative goodwill should, having been reassessed at the first year end after acquisition, be credited to Retained Earnings at the end of the year of acquisition |
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| 2013-04-18 22:25:08 | Negative goodwill appears on the consolidated statement of financial position as a negative at the top of the Asset Section | negative-goodwill-appears-on-the-consolidated-statement-of-financial-position-as-a-negative-at-the-top-of-the-asset-section |
Negative goodwill appears on the consolidated statement of financial position as a negative at the top of the Asset Section and is amortised over the estimated period of time that will benefit from this negative goodwillIs the following statement true?Answer: No, it is not true. Negative goodwill should, having been reassessed at the first year end after acquisition, be credited to Retained Earnings at the end of the year of acquisition |
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| 2013-04-18 22:26:07 | What is a “bargain purchase”? | 122849 |
What is a “bargain purchase”?Answer: A bargain purchase is the expression used when the fair value of a subsidiary's net assets at date of acquisition exceed the “value” attributable to that subsidiary taking into account the fair value of the purchase consideration and the value attributable to the nci |
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| 2013-04-18 22:28:01 | What is the accepted abbreviation for “nci” | 122850 |
Of what is "nci" the abbreviation?Answer: “nci” stands for non-controlling interest” |
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| 2013-04-18 22:29:46 | Where the nci is valued on a proportional basis, the amount of goodwill impairment attributable to the nci is | where-the-nci-is-valued-on-a-proportional-basis-the-amount-of-goodwill-impairment-attributable-to-the-nci-is |
Where the nci is valued on a proportional basis, the amount of goodwill impairment attributable to the nci is nilIs the following statement true?Answer: Yes, there is NO goodwill attributable to the nci where they are valued on a proportional basis so there is no impairment attributable to them |
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| 2013-04-18 22:31:21 | When an exam question says that “the directors value the nci investment on a proportional basis” the examiner is | 122852 | When an exam question says that “the directors value the nci investment on a proportional basis” the examiner is effectively saying that .....? Answer: When an exam question says that “the directors value the nci investment on a proportional basis” the examiner is effectively saying that the nci is valued on the basis of their percentage applied to the fair value of the subsidiary's net assets as at the date of acquisition | ||||||||||||||||||||||||||||||||||||||||||
| 2013-04-18 22:34:04 | The Share Premium Account is (at least in F7!) ALWAYS a pre-acquisition reserve | the-share-premium-account-is-at-least-in-f7-always-a-pre-acquisition-reserve |
The Share Premium Account is (at least in FR!) ALWAYS a pre-acquisition reserveIs the following statement true?Answer: Yes, in FR (and substantially always in SBR!) the Share Premium Account is a reserve which existed at the date of acquisition |
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| 2013-04-20 14:58:18 | When calculating the figure for Consolidated Retained Earnings, the basis for the calculation | when-calculating-the-figure-for-consolidated-retained-earnings-the-basis-for-the-calculation | When calculating the figure for Consolidated Retained Earnings, the basis for the calculation is “H's own + H's share of S post-acq retained – goodwill impaired since acquisition (just our share)!” Is the previous statement correct? Answer: YES! It IS true. This is the “working 3” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-04-20 15:03:09 | What is the difference between “mark-up” and “margin” ? | what-is-the-difference-between-mark-up-and-margin-2 |
What is the difference between “mark-up” and “margin”?Answer:
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| 2013-04-20 15:04:40 | When an item of TNCA is transferred at a profit within a group | when-an-item-of-tnca-is-transferred-at-a-profit-within-a-group | When an item of TNCA is transferred at a profit within a group, and is still in the possession of a group company as at the year end, the adjustment necessary to remove the unrealised profit is to credit the TNCA and debit ….. which account? Answer: When an item of TNCA is transferred at a profit within a group, and is still in the possession of a group company as at the year end, the adjustment necessary to remove the unrealised profit is to credit the TNCA and debit the retained earnings of the company WHICH RECOGNISED THE PROFIT | ||||||||||||||||||||||||||||||||||||||||||
| 2013-04-20 15:06:24 | When an item of TNCA is transferred at a profit within a group, and is still in the possession | when-an-item-of-tnca-is-transferred-at-a-profit-within-a-group-and-is-still-in-the-possession | When an item of TNCA is transferred at a profit within a group, and is still in the possession of a group company as at the year end, the adjustment necessary to remove the unrealised profit is to credit the TNCA and debit the retained earnings of the selling company. But with what amount? Answer: The amount to eliminate is the NET amount of the unrealised profit – ie as reduced by the depreciation which has been charged on the unrealised profit recognised on transfer | ||||||||||||||||||||||||||||||||||||||||||
| 2013-04-20 15:07:04 | The PUP on inventory is calculated based on the value of the intra-group traded goods during the year | the-pup-on-inventory-is-calculated-based-on-the-value-of-the-intra-group-traded-goods-during-the-year |
The PUP on inventory is calculated based on the value of the intra-group traded goods during the yearIs the following statement true?Answer: No! It is calculated based on the value of the CLOSING INVENTORY of those intra-group traded goods |
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| 2013-04-20 15:20:19 | Where the closing inventory of the intra-group traded goods is zero | where-the-closing-inventory-of-the-intra-group-traded-goods-is-zero |
Where the closing inventory of the intra-group traded goods is zero, the value of goods traded during the year is 300,000 and mark-up is 20%, the pup necessary is 50,000Is the following statement true?Answer: No! It is calculated based on the value of the CLOSING INVENTORY of those intra-group traded goods and, since that is zero, the pup is zero |
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| 2013-04-20 15:20:51 | Where the closing inventory of the intra-group traded goods is zero, the value of | where-the-closing-inventory-of-the-intra-group-traded-goods-is-zero-the-value-of |
Where the closing inventory of the intra-group traded goods is zero, the value of goods traded during the year is 300,000 and margin is 20%, the pup necessary is 60,000Is the following statement true?Answer: No! It is calculated based on the value of the CLOSING INVENTORY of those intra-group traded goods and, since that is zero, the pup is zero |
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| 2013-04-20 15:22:12 | Where the closing inventory of the intra-group traded goods is 240,000 | where-the-closing-inventory-of-the-intra-group-traded-goods-is-240000 |
Where the closing inventory of the intra-group traded goods is 240,000, the value of goods traded during the year is 1,300,000 and mark-up is 20%, the pup necessary is 48,000Is the following statement true?Answer: No! Mark-up is a percentage based on cost, so the profit element is 20/120 x 240,000 = 40,000 |
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| 2013-04-20 15:24:31 | Where the closing inventory of the intra-group traded goods is 240,000 | where-the-closing-inventory-of-the-intra-group-traded-goods-is-240000-2 |
Where the closing inventory of the intra-group traded goods is 240,000, the value of goods traded during the year is 1,300,000 and margin is 20%, the pup necessary is 48,000Is the following statement true?Answer: Yes, margin is a percentage based on selling price, so the profit element is 20% x 240,000 = 48,000 |
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| 2013-04-20 15:25:40 | Where the closing inventory of the intra-group traded goods is 240,000, the value | where-the-closing-inventory-of-the-intra-group-traded-goods-is-240000-the-value |
Where the closing inventory of the intra-group traded goods is 240,000, the value of goods traded during the year is 1,300,000 and margin is 20%, the pup necessary is 40,000Is the following statement true?Answer: No, margin is a percentage based on selling price, so the profit element is 20% x 240,000 = 48,000 |
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| 2013-04-20 15:26:17 | In an exam question, where the current accounts in the records of the parent and the subsidiary | in-an-exam-question-where-the-current-accounts-in-the-records-of-the-parent-and-the-subsidiary |
In an exam question, where the current accounts in the records of the parent and the subsidiary are not in agreement, the consolidation adjustment is to debit (or credit) a suspense account with the differenceIs the following statement true?Answer: No, the adjustment necessary is to reconcile the two balances and then cancel the receivable against the payable |
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| 2013-04-20 15:26:53 | Where there is cash in transit at the year end from the subsidiary to the parent, the consolidation | where-there-is-cash-in-transit-at-the-year-end-from-the-subsidiary-to-the-parent-the-consolidation |
Where there is cash in transit at the year end from the subsidiary to the parent, the consolidation adjustment is to debit the cash account in the parent and credit the retained earnings in the subsidiaryIs the following statement true?Answer: No, the adjustment is to debit the cash account in the parent and to credit the “receivable from the subsidiary” included within the parent's receivables |
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| 2013-04-20 15:27:46 | When there are goods in transit at the year end between the parent and the subsidiary | when-there-are-goods-in-transit-at-the-year-end-between-the-parent-and-the-subsidiary |
When there are goods in transit at the year end between the parent and the subsidiary, there is no need to make any adjustment for unrealised profit because the goods are not included within the closing inventory neither of the parent nor of the subsidiary.Is the following statement true?Answer: No, not true. The selling company will have recognised a profit when they recorded the sale as they despatched the goods to the other group company. And it's that profit which needs to be eliminated from the retained earnings of the selling company |
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| 2013-04-20 15:28:19 | In a consolidated statement of income question, any pup which is calculated | in-a-consolidated-statement-of-income-question-any-pup-which-is-calculated |
In a consolidated statement of income question, any pup which is calculated on the closing inventory needs to be adjusted within consolidated cost of sales. The adjustment is to reduce consolidated revenueIs the following statement true?Answer: No, the adjustment is to ADD the pup to consolidated cost of sales |
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| 2013-04-20 15:29:12 | In a consolidated statement of income question, any pup which is calculated on the closing inventory | in-a-consolidated-statement-of-income-question-any-pup-which-is-calculated-on-the-closing-inventory |
In a consolidated statement of income question, any pup which is calculated on the closing inventory needs to be adjusted within consolidated cost of sales. The adjustment is to reduce consolidated cost of salesIs the following statement true?Answer: No, the adjustment is to ADD the pup to consolidated cost of sales |
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| 2013-04-20 15:29:58 | In a consolidated statement of income question, any pup which is calculated on the closing | in-a-consolidated-statement-of-income-question-any-pup-which-is-calculated-on-the-closing |
In a consolidated statement of income question, any pup which is calculated on the closing inventory needs to be adjusted within consolidated cost of sales. The adjustment is to increase consolidated revenueIs the following statement true?Answer: No, the adjustment is to ADD the pup to consolidated cost of sales |
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| 2013-04-20 15:30:28 | In a consolidated statement of income question, any pup which is calculated on the closing inventory needs to be adjusted within consolidated cost of sales. | in-a-consolidated-statement-of-income-question-any-pup-which-is-calculated-on-the-closing-inventory-needs-to-be-adjusted-within-consolidated-cost-of-sales |
In a consolidated statement of income question, any pup which is calculated on the closing inventory needs to be adjusted within consolidated cost of sales. The adjustment is to increase consolidated cost of salesIs the following statement true?Answer: Yes, the adjustment is to add the pup to consolidated cost of sales |
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| 2013-04-20 15:31:01 | In a mid-year acquisition, we consolidate the newly-acquired subsidiary's results | in-a-mid-year-acquisition-we-consolidate-the-newly-acquired-subsidiarys-results |
In a mid-year acquisition, we consolidate the newly-acquired subsidiary's results only for the period of the year before the date of acquisitionIs the following statement true?Answer: No, we consolidate the newly-acquired subsidiary's results for the period AFTER the acquisition |
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| 2013-04-20 15:32:01 | When dealing with a consolidated statement of income question, it is necessary to eliminate the value | when-dealing-with-a-consolidated-statement-of-income-question-it-is-necessary-to-eliminate-the-value |
When dealing with a consolidated statement of income question, it is necessary to eliminate the value of intra-group trading. This is done by debiting Payables and crediting ReceivablesIs the following statement true?Answer: No, the adjustment is to reduce revenue and cost of sales by the transfer value of the intra-group traded goods |
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| 2013-04-20 15:32:31 | When dealing with a 75% subsidiary, we include within the consolidated assets and liabilities JUST OUR SHARE of the subsidiary's assets and liabilities | when-dealing-with-a-75-subsidiary-we-include-within-the-consolidated-assets-and-liabilities-just-our-share-of-the-subsidiarys-assets-and-liabilities |
When dealing with a 75% subsidiary, we include within the consolidated assets and liabilities JUST OUR SHARE of the subsidiary's assets and liabilitiesIs the following statement true?Answer: No, we consolidate the FULL 100% amount of the subsidiary's assets and liabilities ie the value which is under our control! |
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| 2013-04-20 15:33:03 | When dealing with an associate company, goodwill on acquisition is calculated in the same way as goodwill on acquisition of a subsidiary | when-dealing-with-an-associate-company-goodwill-on-acquisition-is-calculated-in-the-same-way-as-goodwill-on-acquisition-of-a-subsidiary |
When dealing with an associate company, goodwill on acquisition is calculated in the same way as goodwill on acquisition of a subsidiaryIs the following statement true?Answer: No, we DO NOT calculate “goodwill” on the acquisition of an associate. Any amount paid by the investor over the investor's share of the associate's fair valued net assets at date of acquisition is called “premium on acquisition” not goodwill |
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| 2013-04-20 15:33:36 | The nci in a consolidated statement of financial position question is calculated as “nci value | the-nci-in-a-consolidated-statement-of-financial-position-question-is-calculated-as-nci-value |
The nci in a consolidated statement of financial position question is calculated as “nci value as at date of acquisition + their share of S post acq retained less their share of any goodwill impaired since acquisition”Is the following statement true?Answer: Yes, it is true |
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| 2013-04-20 15:34:00 | Equity accounting is the method applied in the consolidated financial statements by an investor with no subsidiaries which holds > 20% and < 50% of the voting power in another company | equity-accounting-is-the-method-applied-in-the-consolidated-financial-statements-by-an-investor-with-no-subsidiaries-which-holds-20-and-50-of-the-voting-power-in-another-company |
Equity accounting is the method applied in the consolidated financial statements by an investor with no subsidiaries which holds > 20% and < 50% of the voting power in another companyIs the following statement true?Answer: No, not true. If an investor has no subsidiaries, there is no requirement to produce / present consolidated financial statements |
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| 2013-04-20 15:34:31 | Equity accounting is the method always applied in the consolidated financial statements by an investor (with subsidiaries) which holds > 20% and < 50% in another company | equity-accounting-is-the-method-always-applied-in-the-consolidated-financial-statements-by-an-investor-with-subsidiaries-which-holds-20-and-50-in-another-company |
Equity accounting is the method always applied in the consolidated financial statements by an investor (with subsidiaries) which holds > 20% and < 50% in another companyIs the following statement true?Answer: No, not true. If an investor has > 20% and < 50% of another company's voting power, it would normally expect to treat the investment as an associate under the principles of equity accounting. However, this treatment is dependent upon the disposition of the remaining shares / voting power |
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| 2013-04-20 15:35:06 | Equity accounting is the method normally applied in the consolidated financial statements by an investor (with subsidiaries) which holds > 20% and < 50% in another company | equity-accounting-is-the-method-normally-applied-in-the-consolidated-financial-statements-by-an-investor-with-subsidiaries-which-holds-20-and-50-in-another-company |
Equity accounting is the method normally applied in the consolidated financial statements by an investor (with subsidiaries) which holds > 20% and < 50% in another companyIs the following statement true?Answer: Yes, equity accounting IS the usual manner of accounting for an investment in an associate |
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| 2013-04-20 15:35:52 | What is the extent of an investor's influence when the investor holds > 20% but | what-is-the-extent-of-an-investors-influence-when-the-investor-holds-20-but | What is the extent of an investor's influence when the investor holds > 20% but < 50% of the voting power of another company? Answer: The extent of an investor's influence when the investor holds > 20% but < 50% of the voting power of another company is normally “significant” and the investor equity accounts for the investment. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-04-20 15:36:23 | When accounting for an associate using equity accounting, the basis of the calculation of the amount “Investment in Associate” | when-accounting-for-an-associate-using-equity-accounting-the-basis-of-the-calculation-of-the-amount-investment-in-associate |
When accounting for an associate using equity accounting, the basis of the calculation of the amount “Investment in Associate” is “Cost at date of acquisition + share of A's post acq reatained less any impairment in the value of the investment”Is the following statement true?Answer: Yes, that IS the basis of the calculation of the figure “Investment in Associate” |
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| 2013-11-08 10:20:23 | When must an entity prepare consolidated financial statements? | 144936 | When must an entity prepare consolidated financial statements? Answer: An entity must prepare consolidated financial statements when the entity has had control over another entity at any time within the accounting period | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:25:41 | When is an investee classed as an associate? | investee-classed-associate | When is an investee classed as an associate? Answer: An investee is classed as an associate when the investor holds a significant influence in the investee. Significant influence is the power to participate in the financial and operating policy decision of the investee. Ownership of 20% or more of the voting power of the investee signifies significant influence. Influence is usually evidenced by representation on the board of directors. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:26:39 | What is the definition of “control of an investee”? | definition-control-investee | What is the definition of “control of an investee”? Answer: Control of an investee is the power to direct the operating and investing activities of the entity and is defined as “an investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee” IFRS 10 [6] | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:28:23 | What is a non-controlling interest? | non-controlling-interest | What is a non-controlling interest? Answer: A non-controlling interest is the interest of the owners of the subsidiary shares not owned by the parent entity | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:28:44 | What are the two different ways in which the investment of the non-controlling interest may be measured | two-different-ways-investment-non-controlling-interest-may-measured | What are the two different ways in which the investment of the non-controlling interest may be measured? Answer: The investment of the investment of the non-controlling interest may be measured on a proportional basis (share of net assets) or on a full, fair value basis. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:29:17 | When the non-controlling interest is valued on a proportional basis, how is the share of any impairment in the value of goodwill allocated | non-controlling-interest-valued-proportional-basis-share-impairment-value-goodwill-allocated | When the non-controlling interest is valued on a proportional basis, how is the share of any impairment in the value of goodwill allocated? Answer: When the non-controlling interest is valued on a proportional basis, any impairment of goodwill is allocated entirely to the parent entity, none is allocated to the NCI. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:30:19 | There are three ways in which the examiner can give you information to calculate the value of the non-controlling interest investment | three-ways-examiner-can-give-information-calculate-value-non-controlling-interest-investment |
There are three ways in which the examiner can give you information to calculate the value of the non-controlling interest investment as at date of acquisition on a full, fair value basis.
What are these three ways?
Answer:
The three ways are:
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| 2013-11-08 10:30:47 | When the non-controlling interest is valued on a full, fair value basis, | non-controlling-interest-valued-full-fair-value-basis | When the non-controlling interest is valued on a full, fair value basis, what is the basis of the allocation of any impairment in the value of the subsidiary's goodwill? Answer: When the non-controlling interest is valued on a full, fair value basis, the basis of the allocation of any impairment in the value of the subsidiary's goodwill is in proportion to the shares held by the parent compared with the shares held by the non-controlling interest | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:32:29 | When a parent sells $130,000 goods to a subsidiary at a mark up of 30% and the subsidiary has none of these goods in inventory | parent-sells-130000-goods-subsidiary-mark-30-subsidiary-none-goods-inventory | When a parent sells $130,000 goods to a subsidiary at a mark up of 30% and the subsidiary has none of these goods in inventory at the year end, what value is the provision for unrealised profit? Answer: When a parent sells $130,000 goods to a subsidiary at a mark up of 30% and the subsidiary has none of these goods in inventory at the year end, no provision for unrealised profit is required | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:33:01 | When a parent sells $130,000 goods to a subsidiary achieving margin of 30% and the subsidiary | parent-sells-130000-goods-subsidiary-achieving-margin-30-subsidiary | When a parent sells $130,000 goods to a subsidiary achieving margin of 30% and the subsidiary has a quarter of these goods in inventory at the year end, what value is the provision for unrealised profit? Answer: When a parent sells $130,000 goods to a subsidiary achieving margin of 30% and the subsidiary has a quarter of these goods in inventory at the year end, the provision for unrealised profit is $9,750 (¼ * 30/100 * $130,000) | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:36:45 | When a subsidiary has sold goods to the parent and the unrealised profit is calculated as | subsidiary-sold-goods-parent-parents-inventory-overvalued-unrealised-profit-calculated | When a subsidiary has sold goods to the parent and the unrealised profit is calculated as $2,760, the adjustment for $2,760 is deducted from the Retained Earnings of which entity? Answer: When a subsidiary has sold goods to the parent and the unrealised profit is calculated as $2,760, the adjustment for $2,760 is deducted from the Retained Earnings of the subsidiary . | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:37:22 | In what situation is the Statement of Financial Position of the subsidiary time-apportioned | situation-statement-financial-position-subsidiary-time-apportioned | In what situation are the subsidiary's assets and liabilities on the Statement of Financial Position time-apportioned? Answer: The subsidiary's assets and liabilities on the Statement of Financial Position are NEVER time-apportioned. At the reporting date, the parent has control and therefore consolidated 100% of the assets and liabilities. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 10:38:12 | What could be the situations where the cost of acquisition plus the value of the non-controlling | situations-cost-acquisition-plus-value-non-controlling | What could be the situations where the cost of acquisition plus the value of the non-controlling interest is actually less than the fair value of the subsidiary's net assets at the date of acquisition? Answer: The situations that give rise to a bargain purchase include: * where the fair values attributed by the acquirer to the subsidiary net assets are greater than the carrying value of those assets in the subsidiary's records * where the acquiree's owners were in a “forced sale” situation * where the acquiree's owners are simply looking to sell their entity because, for example, of approaching retirement | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 11:46:40 | 3 months into the accounting year, the parent sold an item of plant and machinery | 3-months-accounting-year-parent-sold-item-plant-machinery | 3 months into the accounting year, the parent sold an item of plant and machinery to the subsidiary and recorded a profit on sale of $40,000. At that date, the asset had a remaining estimated useful life of 4 years. Depreciation is charged on a month by month basis. What is the value of the provision for unrealised profit? Answer: The value of the provision for unrealised profit is $32,500 ($40,000 - $7,500 ($40,000/ 4 * 9/12)) | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:18:14 | The parent has a 75% holding in a subsidiary | parent-75-holding-subsidiary | The parent has a 75% holding in a subsidiary. Before the year end, the subsidiary directors declared a dividend of $6,000. How much dividend should be deducted from the calculation of consolidated retained earnings? Answer: The parent has a 75% holding in a subsidiary. Before the year end, the subsidiary directors declared a dividend of $6,000. The parent's share of the dividend (75% of $6,000) $4,500 dividend should be deducted from the calculation of consolidated retained earnings ( Working 5 )? | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:18:54 | When preparing a Consolidated Statement of Profit or Loss | preparing-consolidated-statement-income | When preparing a Consolidated Statement of Profit or Loss, we are told that during the year the subsidiary sold goods to the parent with a selling value of $27,000. The goods had cost the subsidiary $27,000. What adjustment is necessary? Answer: When preparing a Consolidated Statement of Profit or Loss, we are told that during the year the subsidiary sold goods to the parent with a selling value of $27,000. The goods had cost the subsidiary $27,000. The adjustment necessary is to deduct $27,000 from both the combined revenue and the combined cost of sales. There is no PURP as the goods were sold for the same amount as they cost, hence zero profit! | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:19:20 | What is the basis of the calculation of the non-controlling interest investment for the Consolidated Statement.... | basis-calculation-non-controlling-interest-investment-consolidated-statement | What is the basis of the calculation of the non-controlling interest investment for the Consolidated Statement of Financial Position? Answer: The basis of the calculation of the non-controlling interest investment for the Consolidated Statement of Financial Position is:- * NCI value at date of acquisition, plus * NCI share of subsidiary's post acquisition movement in net assets, less * NCI share of any impairment of goodwill | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:19:59 | What is the basis for the calculation of Consolidated Retained Earnings for the Consolidated Statement | basis-calculation-consolidated-retained-earnings-consolidated-statement | What is the basis for the calculation of Consolidated Retained Earnings for the Consolidated Statement of Financial Position? Answer: The basis for the calculation of Consolidated Retained Earnings for the Consolidated Statement of Financial Position is: * the parent entity's own retained earnings (100%), plus * the parent's share of the subsidiary's post-acquisition retained earnings, less * any impairment of goodwill (full goodwill method) | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:23:14 | When preparing the Consolidated Statement of Profit or Loss, you are told that the Associate Entity sold goods | preparing-consolidated-statement-income-told-associate-entity-sold-goods | When preparing the Consolidated Statement of Profit or Loss, you are told that the associate entity sold goods to the parent during the year of $60,000 (at cost to the parent). The parent had none of these goods in inventory as at the year end. What adjustment is necessary? Answer: When preparing the Consolidated Statement of Profit or Loss, you are told that the associate entity sold goods to the parent during the year of $60,000 (at cost to the parent). The parent had none of these goods in inventory as at the year end. No PURP adjustment is required as the goods have all been sold and no adjustment is necessary for the sales amount because the associate is NOT a group entity and they are therefore not intra-group sales. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:23:59 | What is the full title for which IASB is the abbreviation? | full-title-iasb-abbreviation | What is the full title for which IASB is the abbreviation? Answer: The full title for which IASB is the abbreviation is “International Accounting Standards Board” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:24:22 | What is the Framework definition of an Asset? | framework-definition-asset | What is the Framework definition of an Asset? Answer: The Framework definition of an asset is:- A present economic resource controlled by the entity as a result of past events. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:24:43 | What is the Framework definition of a Liability? | framework-definition-liability | What is the Framework definition of a Liability? Answer: The Framework definition of a liability is:- A present obligation of the entity to transfer an economic resource as a result of past events. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:25:04 | What is the definition of a Provision? | definition-provision | What is the definition of a Provision? Answer: A provision is a probable obligation of uncertain timing or amount | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:25:37 | What is the Framework definition of Equity? | framework-definition-equity | What is the Framework definition of Equity? Answer: The Framework definition of Equity is: the residual amount after deducting all liabilities of the entity from all of the entity's assets | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:26:03 | What is the definition of a Contingent Liability? | definition-contingent-liability | What is the definition of a Contingent Liability? Answer: A Contingent Liability is a possible obligation that arises from some past event and the existence of which will be confirmed by the occurrence or non-occurrence of some substantially uncertain future event not wholly within the control of the entity or it is an item which should be provided for, but is not capable of reliable measurement | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:26:25 | What is the appropriate treatment in the current year's Financial Statements when an entity changes an accounting policy? | appropriate-treatment-current-years-financial-statements-entity-changes-accounting-policy | What is the appropriate treatment in the current year's Financial Statements when an entity changes an accounting policy? Answer: The appropriate treatment in the current year's Financial Statements when an entity changes an accounting policy is to restate the figures brought forward from previous years and apply the new policy prospectively | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:26:47 | What is the appropriate treatment in the current year's Financial Statements when an entity discovers a fundamental error which | appropriate-treatment-current-years-financial-statements-entity-discovers-fundamental-error | What is the appropriate treatment in the current year's Financial Statements when an entity discovers a fundamental error which, if detected last year, would have caused the previous year's reported figures to be different? Answer: The appropriate treatment in the current year's Financial Statements when an entity discovers a fundamental error which, if detected last year, would have caused the previous year's reported figures to be different is to restate as a prior year adjustment the figures previously reported | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:27:10 | What is the appropriate accounting treatment when an entity revises its assessment of the remaining useful life of an asset? | appropriate-accounting-treatment-entity-revises-assessment-remaining-useful-life-asset | What is the appropriate accounting treatment when an entity revises its assessment of the remaining useful life of an asset? Answer: The appropriate accounting treatment when an entity revises its assessment of the remaining useful life of an asset is to depreciate the asset over its revised estimated useful life. This is an example of a change in accounting estimate and no adjustment is made to previously reported figures when an estimate is changed. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:27:31 | What is the appropriate accounting treatment when subsequent expenditure on property, plant | appropriate-accounting-treatment-subsequent-expenditure-property-plant | What is the appropriate accounting treatment when subsequent expenditure on property, plant and equipment is incurred? Answer: If the subsequent expenditure improves the earning capacity of the asset, the expenditure should be capitalised. If, however, the subsequent expenditure merely extends the useful life of the asset, the expenditure should be written off in the year in which the expenditure is incurred. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:27:59 | There are two alternative methods of accounting for the receipt of a government grant received in respect of an asset. | two-alternative-methods-accounting-receipt-government-grant-received-respect-asset | There are two alternative methods of accounting for the receipt of a government grant received in respect of an asset. What are these two ways? Answer: The two alternative methods of accounting for the receipt of a government grant received in respect of an asset are: * deduct the grant from the cost of the asset * credit a deferred income account | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:28:21 | What is the appropriate treatment of borrowing costs incurred on a qualifying loan? | appropriate-treatment-borrowing-costs-incurred-qualifying-loan | What is the appropriate treatment of borrowing costs incurred on a qualifying loan? Answer: The appropriate treatment of borrowing costs incurred on a qualifying loan is to capitalise the borrowing costs into the carrying value of the asset | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:28:45 | In the context of borrowing costs, what are the situations when borrowing costs should cease to be capitalised? | context-borrowing-costs-situations-borrowing-costs-cease-capitalised | In the context of borrowing costs, what are the situations when borrowing costs should cease to be capitalised? Answer: In the context of borrowing costs, the situations when borrowing costs should cease to be capitalised are:- when the qualifying asset is substantially complete when work on the qualifying asset is halted during a prolonged period of inactivity | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:29:08 | What is the definition of “Investment Property”? | definition-investment-property | What is the definition of “Investment Property”? Answer: Investment property is defined as: land or a building held to earn rentals or for capital appreciation (or both), rather than for use or sale in the ordinary course of the entity's business | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:29:58 | What are the two alternative accounting treatments for investment properties? | two-alternative-accounting-treatments-investment-properties |
What are the two alternative accounting treatments for investment properties?
Answer:
The two alternative accounting treatments for investment properties are:
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| 2013-11-08 12:30:35 | Where an investment property is held under the fair value model, what is the appropriate treatment for this asset? | investment-property-held-fair-value-model-appropriate-treatment-asset | Where an investment property is held under the fair value model, what is the appropriate treatment for this asset? Answer: Where an investment property is held under the fair value model, the appropriate treatment for this asset is to:- revalue the asset at the end of every year show any gain or loss within the Statement of Income do not charge depreciation on the asset | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:31:01 | What are the two methods of measuring the value of an intangible asset | two-methods-measuring-value-intangible-asset |
What are the two methods of measuring the value of an intangible asset?
Answer:
The two methods of measuring the value of an intangible asset are:
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| 2013-11-08 12:31:23 | In the context of intangible assets, what is the difference between an asset with an “infinite life” | context-intangible-assets-difference-asset-infinite-life | In the context of intangible assets, what is the difference between an asset with an “infinite life” and an asset with an “indefinite life”? Answer: In the context of intangible assets, an asset with an infinite life is an asset which is expected to “live” forever whereas an asset with an indefinite life is one where it is accepted that the asset will be used up over a period of time, but we are unable to determine a reasonable estimate of just how long that life may be | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:31:57 | In the context of goodwill, what is the appropriate treatment for goodwill | context-goodwill-appropriate-treatment-goodwill | In the context of goodwill, what is the appropriate treatment for goodwill which has been internally generated? Answer: In the context of goodwill, the appropriate treatment for goodwill which has been internally generated is to ignore it completely | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:32:25 | In the context of research and development expenditure, what is the appropriate treatment of “applied research” | context-research-development-expenditure-appropriate-treatment-applied-research | In the context of research and development expenditure, what is the appropriate treatment of “applied research” as distinct from “pure research”? Answer: In the context of research and development expenditure, the appropriate treatment of “applied research” as distinct from “pure research” is to expense it in the Statement of Income. “Pure research” is treated in exactly the same way – expense in the year in which it is incurred. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:32:58 | What is the definition of “development expenditure”? | definition-development-expenditure | What is the definition of “development expenditure”? Answer: Development expenditure is defined as:- the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:33:20 | When considering whether an asset needs to be impaired, the carrying value should be compared with what other value? | considering-whether-asset-needs-impaired-carrying-value-compared-value | When considering whether an asset needs to be impaired, the carrying value should be compared with what other value? Answer: When considering whether an asset needs to be impaired, the carrying value should be compared with the recoverable amount of that asset, which is the higher of the value in use and fair value less costs to sell. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:33:45 | In the context of asset impairments, what is the definition of “recoverable amount” | context-asset-impairments-definition-recoverable-amount | In the context of asset impairments, what is the definition of “recoverable amount”? Answer: In the context of asset impairments, “recoverable amount” is the higher of “value in use” and “fair value less costs to sell” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:34:16 | In the context of asset impairments, of what is “CGU” the abbreviation? | context-asset-impairments-cgu-abbreviation | In the context of asset impairments, of what is “CGU” the abbreviation? Answer: In the context of asset impairments, “CGU” the abbreviation for a “Cash Generating Unit”. A CGU is the the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. IAS 36 [6] | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 12:34:55 | In the context of asset impairments, what is the definition of a cash generating unit | context-asset-impairments-definition-cash-generating-unit | In the context of asset impairments, what is the definition of a cash generating unit? Answer: In the context of asset impairments, a cash generating unit is defined as: “the smallest group of identifiable assets which generates cash inflows independently of other assets or groups of assets” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:35:42 | In the context of asset impairments, what is the limit below which an asset should not be impaired? | context-asset-impairments-limit-asset-impaired | In the context of asset impairments, what is the limit below which an asset should not be impaired? Answer: In the context of asset impairments, no asset should be impaired to an amount lower than its recoverable amount. Its recoverable amount is the higher of the value in use and fair value less costs to sell. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:36:45 | What is the appropriate accounting treatment for an asset which has been classified as an “Asset held for sale”? | appropriate-accounting-treatment-asset-classified-asset-held-sale | What is the appropriate accounting treatment for an asset which has been classified as an “non-current asset held for sale”? Answer: The appropriate accounting treatment for an asset which has been classified as a “non-current asset held for sale” is to measure it initially at the lower of carrying amount and fair value less costs to sell. If it is held under the revaluation model then it must be revalued first according to IAS 16 prior to reclassification. It should be shown separately on the Statement of Financial Position under current assets and should not be depreciated | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:37:20 | Before it may be classified as an asset held for sale, certain conditions must apply. What are those conditions? | may-classified-asset-held-sale-certain-conditions-must-apply-conditions | Before it may be classified as an asset held for sale, certain conditions must apply. What are those conditions? Answer: * it must be available for immediate sale * the sale must be highly probable * management should be committed to the sale * there is an active programme to find a buyer * the asset is being actively marketed * the sale is expected to be completed within 12 months * it is unlikely that the plan will be changed significantly | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:39:56 | What is the appropriate accounting treatment for an short-life, leased asset? | 145022 | What is the appropriate accounting treatment for a short-life, leased asset? Answer: The appropriate accounting treatment is to expense the total lease payments over the lease period through profit or loss. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:40:38 | At what value should a lease liability be measured? | value-finance-leased-asset-capitalised | At what value should a lease liability be measured? Answer: A lease liability should be measured at the the present value of the minimum lease payments. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:42:09 | What is the definition of a lease? | definition-finance-lease | What is the definition of a lease? Answer: A lease is where there is the right to obtain substantially all of the benefits of using the asset and direct the use of the asset. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:42:30 | What three characteristics are required to faithfully represent a transaction? | meant-expression-substance-form | What three characteristics are required to faithfully represent a transaction? Answer: The three characteristics are complete, neutral and free from bias. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:42:53 | An entity enters into a contract to pay rentals for the use of a short-life asset with a fair value of $10,000, 4 months into the accounting period. | operating-lease-situation-asset-fair-value-50000-acquired-4-months-accounting-period | An entity enters into a contract to pay rentals for the use of a short-life asset with a fair value of $10,000, 4 months into the accounting period. Assets of this description are generally depreciated over a two year period. If the entity accounts for depreciation on a month by month basis, what is the correct depreciation charge for this asset? Answer: Short life assets in a lease agreement are NOT depreciated. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:43:22 | What is the underlying assumption for the preparation of financial statements as per The Conceptual Framework? | framework-identified-three-examples-substance-form | What is the underlying assumption for the preparation of financial statements as per The Conceptual Framework? Answer: Going Concern is the underlying assumption. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:46:49 | Define the term “financial asset”. | 145030 | Define the term “financial asset”. Answer: A financial asset is defined as any asset that is: * cash * a contractual right to receive cash or another financial asset from another entity (trade receivable) * a contractual right to exchange financial assets or liabilities with another entity under conditions that are potentially favourable (favourable forward contract) * an equity instrument of another entity (investment in shares) | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:47:47 | In the context of financial instruments, what is the definition of a compound instrument? | context-financial-instruments-definition-compound-instrument | In the context of financial instruments, what is the definition of a compound instrument? Answer: In the context of financial instruments, a compound instrument is a financial instrument that has the characteristics of both equity and a liability. In the FR examination, convertible debentures/loan stock will be an example of a compound financial instrument. Split accounting is used to recognise a liability and equity element on initial recognition. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:49:57 | Details of a contract in its first year are as follows....... | details-contract-first-year-follows | Details of a contract in its first year are as follows: * contract value $2,000,000 *costs to date $1,250,000 * 60% complete * amounts invoiced $1,150,000 * amounts received $1,100,000 * estimated costs to complete $850,000 Revenue is recognised over time and on the basis of percentage complete. What is the value of costs to be recognised? Answer: Costs to be recognised in this first year of the contract are $1,300,000 . A loss is anticipated overall and must be recognised in full. The loss is $100,000 ($2,000,000 - $1,250,000 - $850,000) Revenue of $1,200,000 (60% of $2,000,000) is recognised and to recognise a loss of $100,000, costs must be $1,300,000. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:50:53 | What is a “constructive obligation” of an entity? | constructive-obligation-entity | What is a “constructive obligation” of an entity? Answer: A constructive obligation of an entity is one which is neither legal nor contractual but, because the entity has acted in a consistent manner in the past (a demonstrable pattern of past practice), the entity has raised in the minds of those affected the valid expectation that it will continue to act in that consistent manner. An example of this would be where a company states on its website that it will clean up any environmental damage, so that even if there is no legal obligation to do so they have created the constructive obligation and must provide for the clean up costs. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:51:16 | What is an onerous contract? | onerous-contract | What is an onerous contract? Answer: An onerous contract is one where the costs under the contract exceed the economic benefits of fulfilling the contract. It essentially gives an entity no chance of an overall inflow of economic benefit and the company must provide for the onerous contract. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:52:13 | What is the definition of “events after the reporting period”? | definition-subsequent-events | What is the definition of “events after the reporting period”? Answer: Events after the reporting period are defined as “those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue.” IAS 10 [3] | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:53:22 | What is the definition of an “adjusting event”? | definition-adjusting-event | What is the definition of an “adjusting event”? Answer: An adjusting event is defined as “any event that occurs after the reporting date and which relates to a condition or situation which did exist at the reporting date or fixes with greater certainty an amount or estimate as at the reporting date”. Common example are where a credit customer goes bankrupt after the reporting date, where there is a sale of inventory at below cost, or the discovery of fraud/error. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:54:04 | What is the definition of a “non-adjusting event”? | definition-non-adjusting-event | What is the definition of a “non-adjusting event” Answer: A non-adjusting event is defined as “any event that occurs after the reporting date but which does not relate to a condition or situation which existed at the reporting date but knowledge of the matter is material for a proper understanding of the financial statements”. A fire, flood or the fall in the value of an investment after the reporting date is an example of a non-adjusting event. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:54:32 | What is the correct double entry to reflect a non-adjusting event? | correct-double-entry-reflect-non-adjusting-event | What is the correct double entry to reflect a non-adjusting event? Answer: A non-adjusting event does not have a double entry as we do not need to adjust the accounts. The appropriate accounting treatment is to disclose the matter in the notes to the financial statements, if it is material. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:54:52 | What is the appropriate accounting treatment for an adjusting event? | appropriate-accounting-treatment-adjusting-event | What is the appropriate accounting treatment for an adjusting event? Answer: The appropriate accounting treatment for an adjusting event is to ….. adjust the financial statements as though the event had happened before the reporting date. So, if a customer went into liquidation after the reporting date but prior to the accounts being authorised for issue, this would be an adjusting event and the receivable balance would be written off through profit or loss. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:56:06 | In a diluted earnings per share question with both options and convertible loan stock | diluted-earnings-per-share-question-options-convertible-loan-stock | In a diluted earnings per share question with both options and convertible loan stock, the calculated earnings per share after the options had been projected to be taken up was 57 cents per share. After the loan conversion, the earnings per share figure was 57.2 cents per share. What figure for diluted earnings per share will be disclosed in the financial statements? Answer: The disclosed diluted earnings per share would be 57 cents – the worst position is always shown and anti-dilutive conversions are therefore ignored. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:58:23 | What is the full title of the abbreviation “P/E ratio”? | full-title-abbreviation-pe-ratio | What is the full title of the abbreviation “P/E ratio”? Answer: The full title of the abbreviation P/E ratio is “ Price / Earnings ratio ” and is an important performance ratio. It allows the user of the accounts to make a more like-for-like comparison of the performance of two different entities. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 13:59:53 | Having calculated an entity's ROCE at 13%, what question does this answer? | calculated-entitys-roce-13-question-answer | Having calculated an entity's ROCE at 13%, what question does this answer? Answer: A calculated ratio in isolation answers NO question. All it can do is raise questions – how, why, when? How has it changed from the previous year? Why is it different from the industry average/competition? When did the change arise? Could it have been at the start or the end of the year? When answering an analysis question within the constructed response question in section C always use the word 'because' to help you explain the movement. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:00:19 | How is the asset turnover multiple calculated? | asset-turnover-multiple-calculated | How is the asset turnover multiple calculated? Answer: Asset turnover is calculated by dividing revenue by capital employed (equity plus net debt) | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:03:30 | How is the quick ratio (acid test) calculated? | acid-test-ratio-calculated | How is the quick ratio (acid test) calculated? Answer: The quick ratio (acid test) is calculated by (current assets excluding inventory) / current liabilities | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:04:27 | Suggest some reasons why the calculated “days' sales in receivables” has increased from 45 days last year to 52 days this year | suggest-reasons-calculated-days-sales-receivables-increased-45-days-last-year-52-days-year | Suggest some reasons why the calculated “days' sales in receivables” has increased from 45 days last year to 52 days this year Answer: * A substantial sale just before the year end * A result of management strategy to increase credit period offered to customers * Registration for sales tax this year * Change in cash / credit sales mix * Break down in credit control department Other reasons could equally be a contributory cause and you need to analyse the specific scenario in the question. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:05:16 | When an entity has an “interest cover” multiple of 4.5x, would you conclude that the entity........ | entity-interest-cover-multiple-4-5x-conclude-entity | When an entity has an “interest cover” multiple of 4.5x, would you conclude that the entity is in a strong position? Answer: It is not possible to conclude anything at all from an isolated piece of information! To be able to analyse the ratio, you will need a comparative figure to see if we are in a stronger position. Comparative figures are usually those of the prior year but can be against industry averages or a competitor. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:06:14 | What is the basis of the calculation for “dividend yield”? | basis-calculation-dividend-yield | What is the basis of the calculation for “dividend yield”? Answer: Dividend yield is computed as the cent return per dollar invested – in other words, dividend per share / share price. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:07:01 | What is meant by the term “window dressing”? | meant-term-window-dressing | What is meant by the term “window dressing”? Answer: Window dressing is the entering into (or not entering into) a transaction with the intention of distorting the view shown by the financial statements. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:07:21 | What is a “cash equivalent” in the context of a Statement of Cash Flows? | cash-equivalent-context-statement-cash-flows | What is a “cash equivalent” in the context of a Statement of Cash Flows? Answer: A cash equivalent in the context of a Statement of Cash Flows is the expression applied to short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value. An example being government bonds/guilts. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:07:52 | What are the three main sub-divisions in a Statement of Cash Flows? | three-main-sub-divisions-statement-cash-flows |
What are the three main sub-divisions in a Statement of Cash Flows?
Answer:
The three main sub-divisions in a Statement of Cash Flows are:
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| 2013-11-08 14:08:15 | In a Statement of Cash Flows is a profit on disposal of an asset deducted in arriving at cash..... | statement-cash-flows-profit-disposal-asset-deducted-arriving-net | In a Statement of Cash Flows is a profit on disposal of an asset deducted in arriving at cash generated from operations, or is it added? Answer: In a Statement of Cash Flows a profit on disposal of an asset is deducted in arriving at cash generated from operations. If a loss on disposal of an asset was made then this would be added in arriving at cash generated from operations. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:08:52 | In a Statement of Cash Flows is the figure for tax paid deducted in arriving at net cash flow from investing activities | statement-cash-flows-figure-tax-paid-deducted-arriving-net-cash-flow-investing-activities | In a Statement of Cash Flows is the figure for tax paid deducted in arriving at net cash flow from investing activities, or is it added? Answer: Neither! The figure for tax paid is not shown in the investing activities section of a Statement of Cash Flows. The figure would be deducted within the operating activities section. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:09:35 | What are the two alternative methods for the preparation of a Statement of Cash Flows? | two-alternative-methods-preparation-statement-cash-flows | What are the two alternative methods for the preparation of a Statement of Cash Flows? Answer: The two alternative methods for the preparation of a Statement of Cash Flows are the “ direct method ” and the “ indirect method ” (the indirect method is the only method examined in the FR exam) | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:10:02 | Is an increase in the value of closing inventory, when compared with the previous year value | increase-value-closing-inventory-compared-previous-year-value | Is an increase in the value of closing inventory, when compared with the previous year's value, added to the financing section of a Statement of Cash Flows, or is it deducted? Answer: Neither! The figure for an increase in the value of closing inventory when compared with the previous year's figure is not shown in the financing activities section of a Statement of Cash Flows. The figure would be deducted within the operating activities section | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:10:31 | In any question in an FR examination........ | question-f7-examination | In any question in an FR examination, which are the easiest marks to gather – the first 50% or the last 50%? Answer: In any question in an FR examination, the easiest marks to gather are the first 50%. It is therefore vitally important in the examination to focus on the easier marks first and develop a solid exam technique to ensure that you pass the exam. Any marks above the pass mark are a bonus! | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-08 14:10:55 | What is the correct time-allocation for a 20 mark constructed response question in the FR examination? | correct-time-allocation-15-mark-question-f7-examination | What is the correct time-allocation for a 20 mark constructed response question in the FR examination? Answer: The correct time-allocation for a 20 mark question in the FR examination is 36 minutes (1.8 minutes per mark) – not a minute more, not a minute less. The formula for quickly calculating time allocation in the FR examination is …. number of marks for the question multiplied by 2 and take off 10%. So, for a 20 mark question …. 20 multiplied by 2 = 40 and 40 – (10% of 40) = 40 – 4 = 36 minutes | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 11:02:07 | How is “Corporate Governance” defined? | corporate-governance-defined | How is “Corporate Governance” defined? Answer: Corporate Governance is defined as “the system by which companies are directed and controlled” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 12:50:16 | In 1992, the first report on corporate governance was issued | 1992-first-report-corporate-governance-issued | What is a value network? Answer: A value network recognises that when consumers obtain products many organisations are involved such as raw material suppliers, component suppliers, the production company itself, logistics companies and retailers. Each of these has its own value chain and each adds value to the final consumer's experience. If a component does not add value, why is it there? | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 12:50:52 | The Cadbury Report recognised that groups beyond a company's shareholders were interested | cadbury-report-recognised-groups-beyond-companys-shareholders-interested | What are the two determinants of an organisation's risk appetite? Answer: - Risk capacity - Risk attitude | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 12:56:55 | Explain what is meant by “honesty” or “probity” | explain-meant-honesty-probity | List five potential advantages of outsourcing Answer: Any five of: - Management can focus on core activities - Cost savings - Cost certainty - Cost restructuring - Access to expertise - Better quality - Risk transference - Capacity management | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 12:57:37 | Explain what is meant by “responsibility” | 145374 | What is a risk report Answer: - UK companies (and also companies in many other jurisdictions) now have include risk reports as part of their annual company reports. They inform shareholders and others about the organisation's main risks and what the company is doing about them. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 12:58:13 | Explain what is meant by “accountability” | 145375 | What are the four desirable qualities of an internal audit department and internal auditors Answer: - Qualified - Experienced - Independent - Professional | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 12:59:46 | Explain what is meant by “reputation” | 145376 | What is cloud computing? Answer: Software and data are held on the server and processing takes place on the server. The client (local) machine acts as an interface. Client machines do not need to be particularly powerful (thin clients) and only one copy of the software is needed - making updating much easier. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 13:01:23 | Explain what is meant by “integrity” | explain-meant-integrity | One of fundamental ethical principles is "integrity". Explain what is meant by “integrity” Answer: - the strict adherence to an appropriate moral or ethical code - being honest and straightforward - standing up for what you believe is right | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 13:02:49 | List 5 external stakeholders of a public company | list-5-external-stakeholders-public-company | List five external stakeholders of a public company Answer: - regulators - Government - the Stock Exchange - small investors - institutional investors - society in general | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 13:03:16 | Define the term “stakeholder” | 145381 | Define the term “stakeholder” Answer: A stakeholder is any person or group that can affect or be affected by the policies or activities of an organisation | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 13:06:10 | What is meant by the expression “agency costs” | meant-expression-agency-costs | What is meant by the expression “off-shoring” Answer: Moving production abroad or outsourcing to a foreign-based company. Often done to obtain cost advantages. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 13:08:52 | Give 4 examples of “agency costs” | give-4-examples-agency-costs | The Baldrige model for world-class organisations can be depicted on a diagram with eight boxes. Ehat are the titles of these boxes Answer: - Organisational profile - Measurement, analysis and knowledge management - Strategic plannning - Leadership - Customer focus - Workforce focus - Operations - Results | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 13:09:38 | Following the Sir David Walker and the FRC review of corporate governance in 2010 reached two main conclusions | following-sir-david-walker-frc-review-corporate-governance-2010-reached-two-main-conclusions | What are the three elements of Adair's action-centred leadership? Answer: - Concern for individuals - Concern for the group - Concern for the task | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 13:10:18 | The main principles of the UK Corporate Governance Code are grouped into 5 areas | main-principles-uk-corporate-governance-code-2010-sub-divided-5-areas | The main principles of the UK Corporate Governance Code 2010 are grouped under five headings. What are those headings? Answer: - leadership - effectiveness - accountability - remuneration - relations with shareholders | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:03:31 | One of the main principles of the UK Corporate Governance Code 2010 is “leadership” | 145406 | One of the main principles of the UK Corporate Governance Code is “leadership” Provide 4 ideas to explain more fully this main principle Answer: - every company should be headed up by an effective board of directors, collectively responsible - there should be a clear division of responsibilities at the head of the company. - the Chairman is responsible for the leadership of the board - in a unitary board the NEDs should constructively challenge and assist in the development of strategy | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:07:04 | One of the main principles of the UK Corporate Governance Code 2010 is “effectiveness” | 145408 | One of the main principles of the UK Corporate Governance Code is “effectiveness” Provide four ideas to explain more fully this main principle Answer: - the board and its sub-committees should have an appropriate balance of skills - a balance of executive/non-executive directors - there should be a formal, thorough and transparent procedure for the appointment of new directors - directors should be able to allocate sufficient time to company to discharge their responsibilities effectively - directors should be: given a induction course when joining / be able to update their knowledge on regular basis - the board should be supplied in a timely manner with necessary information - board's performance should be evaluated - subject to regular re-election | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:14:08 | One of the main principles of the UK Corporate Governance Code 2010 is “accountability” | one-main-principles-uk-corporate-governance-code-2010-accountability | One of the main principles of the UK Corporate Governance Code is “accountability” Provide three ideas to explain more fully this main principle Answer: the board should: - present a balanced and understandable assessment of the company's performance, position, - establish formal/transparent procedures for consideration of their approach to internal control and risk management - establish procedures for ensuring that an appropriate relationship is maintained with external auditor - the board is responsible for determining the nature and extent of significant risks which it is willing to take in achieving its strategic objectives | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:18:53 | One of the main principles of the UK Corporate Governance Code 2010 is “remuneration” | one-main-principles-uk-corporate-governance-code-2010-remuneration | One of the main principles of the UK Corporate Governance Code is “remuneration” Provide four ideas to explain more fully this main principle Answer: - remuneration levels should be sufficient to attract, retain directors of appropriate skills, - a company should seek to avoid paying in excess of the levels needed to attract, retain and motivate - portion of director's remuneration should be linked to performance - formal/transparent procedure for developing remuneration policy - no director should be determining their own remuneration level | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:27:59 | List 4 reasons to support the idea of developing and applying a code of corporate governance | list-4-reasons-support-idea-developing-applying-code-corporate-governance | What is meant by the terms 'entrepreneur' and intrapreneur'? Answer: Entrepreneur: someone willing to undertake risk and expend time and money to set up a new business. Intrapreneur: an employee who promotes innovation and new business ideas within and existing organisation. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:32:05 | There are always justifications for the establishment of a code of corporate governance. | always-justifications-establishment-code-corporate-governance | What are the four 'Vs' of big data? Answer: - Volume - Velocity - Variety - Veracity (a late addition) | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:46:36 | What are the key roles and responsibilities of the board of directors? | key-roles-responsibilities-board-directors | Gross risk depends on three factors, each of which of which can be modified to reduce the overall risk. What are the three factors? Answer: - The asset subject to the risk. - The threat to the asset. - The vulnerability of the organisation. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:48:31 | What do you understand by the expression “cross-directorships”? | understand-expression-cross-directorships | What do you understand by the expression “scenario planning"? Answer: Out of all the permutations of events that could happen, a relatively few consistent and viable sets of believable futures (scenarios) are investigated. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:49:57 | What are the specific responsibilities of a Chair of a public company | specific-responsibilities-chair-public-company | What are the specific responsibilities of a Chair of a public company Answer: - providing leadership to the board, including - setting the agenda for board meetings - chairing all meetings (board/sub-committees/members) - ensuring the continuing quality of information given to the board - enabling effective NED contributions In addition, the chair will with major and institutional shareholders and will communicate shareholder views and concerns to the full board | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:50:32 | What is an induction process? | induction-process | In the context of corporate governance, what is an induction process? Answer: An induction process is a process whereby a new director (executive or non-executive) is given information about the company to better enable the director to make meaningful and effective contributions | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:53:49 | What are the characteristics of an induction process | characteristics-induction-process | What is meant by the terms: pure risk, gross risk and net risk? Answer: - Pure risk: there is only downside risk (as opposed to speculative risk which go either way) - Gross risk: the risk before steps have been taken to reduce or mitigate it. - Net risk: the risk left (residual risk) after the gross risk is mitigated. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:55:18 | What is meant be the expression “retirement by rotation”? | meant-expression-retirement-rotation | Projects should be assessed for feasibility. What are the four categories of feasibility that should be considered? Answer: - economic - operational - social - technical | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 16:55:53 | On what grounds may the office of director be vacated? | grounds-may-office-director-vacated | What is meant by the 'public interest? Answer: IFAC defines this as: The net benefits derived for, and procedural rigour employed on behalf of, all society in relation to any action, decision or policy' Essentially it is exercising social responsibility and a recognition that many stakeholders' interests have to be considered. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:25:45 | Under what grounds may a director be disqualified from serving as a director? | grounds-may-director-disqualified-serving-director | What are the three components of the ACCA's ethical framework? Answer: - Ethical principles to be followed - Recognition of the threatsto which these are subject - Establishment of safeguards to eliminate the threats or reduce them to an acceptable level. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:27:33 | What is a proxy? | proxy | What is a 'shared service' Answer: It is the centralisation of certain service functions of an organisation. For example, all time records and client billing for all of an accountant's offices are handled by one service centre. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:28:33 | At a company Annual General Meeting, the shareholders are asked to consider the financial statements | company-annual-general-meeting-shareholders-asked-consider-financial-statements | What is POPIT? Answer: - People - Organisation - Processes - Organisation - Information technology These are the areas that must be considered in any organisational change. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:29:34 | There are two approaches available for the preparation of a form of governance | two-approaches-available-preparation-form-governance | There are two approaches available for the implementation of corporate governance. What are those two approaches? Answer: The two approaches are “rules based” and “principles based” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:30:15 | What is the frequently quoted example of a rules-based system of corporate governance? | frequently-quoted-example-rules-based-system-corporate-governance | What is the frequently quoted example of a rules-based system of corporate governance? Answer: The frequently quoted example of a rules-based system of corporate governance is the Sarbanes-Oxley system as used in the USA | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:33:18 | The OECD and the ICGN have both issued statements in an effort to develop further the principles as identified by the UK | oecd-icgn-issued-statements-effort-develop-principles-identified-uk | Risk management seeks a balance between two factors, both ending ' ance '. What are they? Answer: - performance -conformance | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:33:44 | What are the four identified elements of Corporate Social Responsibility (CSR) | four-identified-elements-corporate-social-responsibility-csr | What are Tucker's five questions in his approach to ethical behaviour? Answer: - Is it profitable? - Is it legal? - Is it fair? - Is it right? - Is it sustainable or environmentally sound? | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:36:51 | With reference to the legal responsibility element of CSR, what two points could you make to illustrate the concept | reference-legal-responsibility-element-csr-two-points-make-illustrate-concept | Compare strategic drift to disruptive technologies? Answer: Strategic drift is the slow divergence of an organisation's capabilities and activities compared to the environment in which it operates. A disruptive technology is a very sudden shift in the environment brought about by technological or other breakthroughs. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:38:09 | With reference to the philanthropic responsibility element of CSR, what three points could | 145489 | On what document are the following recorded: risks, their probability of occurrence, their impact and the planned responses to the risks? Answer: - The risk register | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:48:34 | Whose model of stakeholder relations maps the stakeholder level of interest against their power? | whose-model-stakeholder-relations-maps-stakeholder-level-interest-power | Whose model of stakeholder relations maps the stakeholder level of interest against their power? Answer: The model which maps the stakeholder level of interest against their power is Mendelow's Model | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:49:31 | What rights are enjoyed by the shareholders of a company? | rights-enjoyed-shareholders-company | What are the five elements of internal control? Answer: - control environment - risk assessment - control activities - information and communication - semonitoring | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:50:07 | Define “risk management” as determined by the Cadbury Report | 145498 | What are the six steps of the business change life-cycle? Answer: - Planning ie define the goals - Analyse existing activities - Design new or improved processes - Development - Implementation/transition - Review | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:52:14 | The role of neds and, in particular, the audit committee is summarised by my mnemonic “Clarissa” | role-neds-particular-audit-committee-summarised-mnemonic-clarissa | What does the following define? - A concise communication of an organisation's strategy, governance and performance - Demonstrates the links between an organisation's financial performance and its wider social, environmental and economic context. - Shows how organisations create value over the short, medium and long term. Answer: Integrated reporting | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:54:48 | What is a “whistle-blower”? | whistle-blower | What is a “whistle-blower”? Answer: A whistle-blower is a person who notifies relevant authorities about perceived breaches of external or internal rules or regulations | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:55:25 | In the context of risk management, what are the four identified ways available to a company to manage | context-risk-management-four-identified-ways-available-company-manage | In the context of risk management, what are the four identified ways available to a company to manage any risk which faces the company? Answer: The four identified ways of managing risk are: - transfer - avoid - reduce - accept (TARA) | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:56:02 | The definition of “an internal control system” as provided by the Auditing Practices Board | definition-internal-control-system-provided-auditing-practices-board | The definition of an internal control system includes five objectives. What are these? Answer: - carry out the business of the enterprise in an efficient and orderly manner - ensure adherence to management policies - safeguard the assets - prevent and detect fraud and error - completeness and accuracy of the records - timely preparation of financial information | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:57:14 | The Auditing Practices Board lists 8 internal controls | auditing-practices-board-lists-8-internal-controls | List the categories of internal control activities Answer: - organisation - arithmetic and accounting - personnel - management and supervision - physical - authorisation and approval - segregation - management - personnel | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:58:28 | A mnemonic applicable for remembering the characteristics of “good” information is “accurate” | mnemonic-applicable-remembering-characteristics-good-information-accurate | A mnemonic applicable for remembering the characteristics of “good” information is “accurate” To what do the letters in “accurate” refer? Answer: The letters in “accurate”, used for remembering the characteristics of “good” information, refer to the following: - a ccurate - c omplete - c ost-beneficial - u ser-targeted - r elevant - a uthoritative - t imely - e asy to use | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 21:59:29 | An internal auditor will adopt the same seven procedures in (a) risk management and (b) internal control improvement | internal-auditor-will-adopt-seven-procedures-risk-management-b-internal-control-improvement | A risk map plots high/low severity or impact of an event and high/low probability or likelihood of an event. Match transfer, accept, avoid/abandon and reduce to the four quadrants ? Answer: - high impact, low probability: transfer eg insure - high impact high probability: avoid/abandon - low impact, high probability: reduce - low impact, low probability: accept | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:00:40 | What are the five identified ethical threats to an external auditor's independence? | five-identified-ethical-threats-external-auditors-independence | What are the five identified ethical threats to an external auditor's independence? Answer: - advocacy - self-interest - intimidation - familiarity - self-review | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:01:25 | In addition to the five ethical threats to an external auditor's independence, a number of other matters | 145507 | Name five sources of self-interest threats Answer: Any five from: - fee received from client exceeds maximum guideline - beneficial interest in the success of the company (by way of shareholding) - loans to / from the company - gifts and benefits received from the company - overdue fees - contingent fees - close business relationships - close family and personal relatioships - low-balling - recruiting staff on behalf of the client | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:03:15 | In the context of risk management, we come across the acronym ALARP | context-risk-management-come-across-acronym-alarp | In the context of risk management, we come across the acronym ALARP What does the acronym stand for? Answer: In the context of risk management, the acronym ALARP stands for As Low As Reasonably Practicable | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:04:23 | Define “Enterprise Risk Management” | define-enterprise-risk-management | Define “Enterprise Risk Management” Answer: “the process effected by an entity's board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:04:56 | What are the key principles of Enterprise Risk Management? | key-principles-enterprise-risk-management | What are the four categories of risk in the COSO framework for enterprise risk management? Answer: - Strategic - Operational - Reporting - Compliance | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:05:30 | What are the nine business risks mentioned in the ACCA study guide? | nine-business-risks-mentioned-acca-study-guide | What are the eight elements/components of the COSO risk management approach? Answer: - business probity - internal environment - objective setting - event identification - risk assessment - risk response - control activities - information and communication - monitoring | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:06:07 | In the context of ethical theories, what are the characteristics of an absolutism belief system? | context-ethical-theories-characteristics-absolutism-belief-system | When faced with an ethical conflict, what six steps should the decision-maker consider? Answer: - Consider the facts - Consider the ethical principles involved - Consider the related fundamental principles - Consider relevant internal procedures - Consider alternative courses of action - Consider the consequences of each alternative course of action | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:06:35 | In the context of ethical theories, what are the characteristics of an relativism belief system? | context-ethical-theories-characteristics-relativism-belief-system | What are the two axes of a risk map? Answer: - severity/impact - frequency/probability | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:07:05 | What is meant by the expression “a deontological approach to ethics”? | meant-expression-deontological-approach-ethics | Suggest six areas that would typically be covered by a company's ethical code? Answer: - Equal opportunities/discrimination - Bullying - Use of the Internet - Reporting wrong-doing - Bribery - Money-laundering - Response to conflicts of interest | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:07:41 | What is meant by the expression “a teleological approach to ethics”? | meant-expression-teleological-approach-ethics | In a two-tier board system for corporate governance, what are the two boards called? Answer: - A supervisory board - A management board | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:08:26 | What are the three tests to be applied when determining the moral acceptability of an action? | three-tests-applied-determining-moral-acceptability-action | What are the three conditions needed for a fraud to be perpetrated? Answer: - incentive/motive - opportunity - attitude/dishonesty | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:09:03 | Under the teleological approach to an ethical dilemma, there are two perspectives from which the consequences may be viewed | teleological-approach-ethical-dilemma-two-perspectives-consequences-may-viewed | What are the three elements of an anti-fraud strategy? Answer: - prevention - detection - response | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:11:14 | Lawrence Kohlberg's theory involves three levels. | lawrence-kohlbergs-theory-involves-three-levels | What are the six capitals of integrated reporting? Answer: - financial - manufactured - intellectual - human - social and relationship - natural capital | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:36:40 | Within Kohlberg's level 2, there are two stages. What is involved in each of those two stages? | within-kohlbergs-level-2-two-stages-involved-two-stages | In knowledge management, what are the two categories of knowledge Answer: - Explicit - Tacit | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:37:07 | Within Kohlberg's level 3, there are two stages. What is involved in each of those two stages? | within-kohlbergs-level-3-two-stages-involved-two-stages | What are the '3Es', often used when discussing not-for-profit organisations? Answer: - Effectiveness - Efficiency - Economy | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:37:37 | According to Gray, Owen and Adams there are seven positions on social responsibility | according-gray-owen-adams-seven-positions-social-responsibility | In the UK, whistle-blowers (employees, trainees and agency workers) are protected by law if they report six categories of event. What are these categories? Answer: - a criminal offence - someone's health and safety is threatened - risk of or actual damage to the environment - a miscarriage of justice - the company is breaking the law - belief that someone is covering-up a wrong-doing | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:38:33 | Define “profession | define-profession | Define “profession” Answer: “Profession” is defined as “a calling requiring specialist knowledge and often long-term intensive academic preparation” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:39:19 | Define “professionalism” | 145528 | Define “professionalism” Answer: “Professionalism” is defined as “the conduct aims or qualities that characterise or mark a profession or professional person” | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:39:45 | The influence of accounting is claimed to be limited as regards ethical and other areas in five ways | influence-accounting-claimed-limited-regards-ethical-areas-five-ways | What does 'EMAS' stand for? Answer: Eco-Management and Audit Scheme | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:40:04 | Within Kohlberg's level 1, there are two stages. What is involved in each of those two stages? | within-kohlbergs-level-1-two-stages-involved-two-stages | Which ISO number refers to a series of international standards on environmental management? Answer: ISO14000 | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:41:00 | What are the five fundamental principles which underpin the ACCA code of ethics | five-fundamental-principles-underpin-acca-code-ethics | What are the five fundamental principles which underpin the ACCA code of ethics? Answer: - integrity - objectivity - competence - confidentiality - professional behaviour | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:41:56 | What are the seven stages of taking a decision in a situation of ethical dilemma according to the American Accounting Association? | seven-stages-taking-decision-situation-ethical-dilemma-according-american-accounting-association | What is the International Corporate Governance Network? Answer: Represents investors, financial intermediaries, companies academics and others interested in the development of global corporate governance practices. The organisation believes that good corporate governance is a prerequisite for effective competition and prospering economies. | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:44:03 | In the context of taking decisions in a position of ethical dilemma, Tucker's model | context-taking-decisions-position-ethical-dilemma-tuckers-model | In the context of taking decisions in a position of ethical dilemma, Tucker's model provides a fie question approach. What are those five steps? Answer: Tucker's five step model involves: - profitability - legality - fairness - ethics - environmental acceptability | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:44:38 | Environmental reporting is an increasingly fashionable topic and also environmental audits | environmental-reporting-increasingly-fashionable-topic-also-environmental-audits | What matters are covered in the six core performance indicators of EMAS? Answer: - waste management and waste minimisation - energy efficiency - material efficiency - water - waste - biodiversity - emissions | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:45:18 | What is meant by the expression “environmental footprint” | meant-expression-environmental-footprint | What is meant by the expression “environmental footprint” Answer: By “environmental footprint” is meant the attempt to evaluate the extent of a company's impact on the environment and, in particular, the company's consumption of resource, the extent of harm to the environment caused by company emissions and a measure (quantitatively or qualitatively) of resource usage and pollution emitted | ||||||||||||||||||||||||||||||||||||||||||
| 2013-11-11 22:45:48 | Social footprint evaluates sustainability in three areas of capital | social-footprint-evaluates-sustainability-three-areas-capital | What are the 3Ps of triple bottom line reporting? Answer: - profit - people - planet | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:14:18 | What is the full name of the company for Feb2017 management case study? | what-is-the-full-name-of-the-company-for-feb2017-management-case-study | What is the full name of the company for Feb2017 management case study? Answer: Menteen Studios | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:16:05 | What year was the company founded | year-company-founded | What year was the company founded 1936 | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:16:30 | Has the company grown organically, through acquisition or both? | company-grown-organically-acquisition | Has the company grown organically, through acquisition or both? Answer: Both | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:16:52 | Is the company a listed company ? | company-listed-company | Is the company a listed company ? Answer: YES | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:17:16 | Who holds the key role in terms of producing, and developing the film? | holds-key-role-terms-producing-developing-film | Who holds the key role in terms of producing, and developing the film? The producer | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:18:12 | What is the prize winning ceremony for the film industry in this case study? | prize-winning-ceremony-film-industry-case-study | What is the prize winning ceremony for the film industry in this case study? Answer: Academy Awards or Oscars | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:18:37 | What will be the impact if successful actors are unwilling to act in a film? | will-impact-successful-actors-unwilling-act-film | What will be the impact if successful actors are unwilling to act in a film? Films without famous actors are unlikely to attract sufficient audiences | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:19:03 | What is a film ‘option’ | what-is-a-film-option | What is a film ‘option’ Answer: This gives the studio the right but not obligation to make the film within a defined period. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:20:04 | Why is estimating the expected revenue for film budget so difficult? | estimating-expected-revenue-film-budget-difficult | Why is estimating the expected revenue for film budget so difficult? Answer: It depends on audience demand for the film which is highly unpredictable. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:20:39 | Which level of management makes the final decision to proceed pre-production? | level-management-makes-final-decision-proceed-pre-production | Which level of management makes the final decision to proceed pre-production? Executive Directors make this decision. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:25:11 | What does a cinematographer do? | what-does-a-cinematographer-do | What does a cinematographer do? Answer: This is the person in charge of filming + photography. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:25:42 | Who has the primary responsibility of keeping the film within budget and on schedule? | primary-responsibility-keeping-film-within-budget-schedule | Who has the primary responsibility of keeping the film within budget and on schedule? Producer | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:26:18 | What is the most common type of merchandising associated with children’s films? | common-type-merchandising-associated-childrens-films | What is the most common type of merchandising associated with children’s films? Films aimed at children will produce a range of toys to merchandise | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:28:51 | What is the industry term for the stage where film is finally shown in the cinemas? | industry-term-stage-film-finally-shown-cinemas | What is the industry term for the stage where film is finally shown in the cinemas? Exhibition stage | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 13:31:03 | What is the role of a professional guild? | role-professional-guild | What is the role of a professional guild? These protect and represent the interests of certain groups within a profession- e.g. – actors guild, producers guild. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-01-04 16:50:10 | What genre of TV does the company produce? | genre-tv-company-produce |
What genre of TV does the company produce?
Answer:
Reality
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| 2017-01-04 16:54:15 | Does the company specialise in low-cost or expensive programs? | does-the-company-specialise-in-low-cost-or-expensive-programs |
Does the company specialise in low-cost or expensive programs?
Answer:
Low-cost
See page 2 of pre-seen material |
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| 2017-01-04 17:00:35 | How many legacy TV companies are there and what is their public-funded/advertising split? | many-legacy-tv-companies-public-fundedadvertising-split |
How many legacy TV companies are there and what is their public-funded/advertising split?
Answer:
Four
1:3
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| 2017-01-04 17:11:05 | What viewing share do the two most popular channels command? | viewing-share-two-popular-channels-command |
What viewing share do the two most popular channels command?
>50%
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| 2017-01-04 19:29:10 | Is Evestar a TV broadcaster or a production company selling to broadcasters? | evestar-tv-broadcaster-production-company-selling-broadcasters |
Is Evestar a TV broadcaster or a production company selling to broadcasters?
Answer:
Production company
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| 2017-01-04 19:29:35 | When was Evestar formed | when-was-evestar-formed |
When was Evestar formed?
Answer:
2006
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| 2017-01-04 19:30:00 | Is Evestar private or listed | evestar-private-listed |
Is Evestar private or listed?
Answer:
Listed
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| 2017-01-04 19:30:27 | Who is the founder and what % of Equity does he own | who-is-the-founder-and-what-of-equity-does-he-own |
Who is the founder and what % of Equity does he own?
Answer:
Denny White, 7%
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| 2017-01-04 19:31:11 | What type of programs are: Teeland Variety, Choirwars, Starmaker,The Cavern | type-programs-teeland-variety-choirwars-starmakerthe-cavern |
What type of programs are: Teeland Variety, Choirwars, Starmaker, The Cavern?
Answer:
See page 5, 8, 9, 10 of pre-seen material |
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| 2017-01-04 19:31:38 | Are these programs cheaper or more expensive to make than drama or comedy | programs-cheaper-expensive-make-drama-comedy |
Are these programs (Teeland Variety, Choirwars, Starmaker,The Cavern) cheaper or more expensive to make than drama or comedy?
Answer:
Cheaper
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| 2017-01-04 19:32:05 | What are the four elements of the successful formula for Evestar’s programs? | four-elements-successful-formula-evestars-programs |
What are the four elements of the successful formula for Evestar’s programs?
Answer:
See page 7 of pre-seen material |
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| 2017-01-04 19:32:31 | What is How Music? | what-is-how-music | What is How Music?
Answer:
Leading music label; 75% owned by Denny White
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| 2017-01-04 19:32:50 | How does Evestar not comply with the corporate governance code? | evestar-not-comply-corporate-governance-code |
How does Evestar not comply with the corporate governance code?
Answer:
Denny is both Chairman and CEO
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| 2017-01-04 19:36:37 | Which company is Evestar’s most immediate rival? | company-evestars-immediate-rival |
Which company is Evestar’s most immediate rival?
Answer:
Bonchant
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| 2017-01-04 19:37:20 | What type of programs are: Hear my Song, Celebrity Restaurant, Put on a Party, House Flip? | type-programs-hear-song-celebrity-restaurant-put-party-house-flip |
What type of programs are: Hear my Song, Celebrity Restaurant, Put on a Party, House Flip?
Answer:
See page 14, 15 of pre-seen material |
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| 2017-01-04 19:38:01 | Do programs have to be expensive to make to attract a large audience? | programs-expensive-make-attract-large-audience | Do programs have to be expensive to make to attract a large audience?
Answer:
No
See page 14, 15 of pre-seen material |
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| 2017-01-04 19:38:43 | What are the four strengths identified in the SWOT analysis? | four-strengths-identified-swot-analysis |
What are the four strengths identified in the SWOT analysis?
Answer:
See page 16 of pre-seen material |
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| 2017-01-04 19:39:00 | What are the three weaknesses identified in the SWOT analysis? | three-weaknesses-identified-swot-analysis |
What are the three weaknesses identified in the SWOT analysis?
Answer:
See page 16 of pre-seen material |
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| 2017-01-05 09:48:46 | What are the three threats identified in the SWOT analysis? | three-threats-identified-swot-analysis |
What are the three threats identified in the SWOT analysis?
Answer:
See page 16 of pre-seen material |
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| 2017-01-05 09:57:04 | What are the two opportunities identified in the SWOT analysis? | what-are-the-two-opportunities-identified-in-the-swot-analysis |
What are the two opportunities identified in the SWOT analysis?
Answer:
Growing market for reality TV, overseas expansion
See page 16 of pre-seen material |
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| 2017-01-05 09:57:33 | What are the two highest risks evaluated in the risk register | two-highest-risks-evaluated-risk-register |
What are the two highest risks evaluated in the risk register and who is responsible for managing these risks?
Answer:
See page 17 of pre-seen material |
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| 2017-01-05 09:58:08 | What is Evestar’s profit pattern for the last five years? | evestars-profit-pattern-last-five-years |
What is Evestar’s profit pattern for the last five years?
Answer:
Three increases then a decrease last year
See page 18 of pre-seen material |
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| 2017-01-05 09:58:24 | What is the latest gearing ratio (D/E) | latest-gearing-ratio-de |
What is the latest gearing ratio (D/E)?
Answer:
250/175 = 1.4
See page 19 of pre-seen material |
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| 2017-01-05 09:58:41 | What is interest cover for the last year’s results? | interest-cover-last-years-results |
What is interest cover for the last year’s results?
Answer:
115/20 = 5.75
See page 18 of pre-seen material |
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| 2017-01-05 09:58:57 | Using revenue, what is the relative size of Evestar and its closest competitor? | using-revenue-relative-size-evestar-closest-competitor |
Using revenue, what is the relative size of Evestar and its closest competitor?
Answer:
261/175 = 1.5
See page 18, 20 of pre-seen material |
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| 2017-01-05 09:59:14 | What is the competitor’s gearing and interest cover | competitors-gearing-interest-cover |
What is the competitor’s gearing and interest cover?
Answer:
100/311 = 0.32
77/8 = 9.6
See page 20, 21 of pre-seen material |
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| 2017-01-05 09:59:35 | Roughly what has happened Evestar’s share price over the last year | roughly-happened-evestars-share-price-last-year |
Roughly what has happened Evestar’s share price over the last year?
Answer:
Approximately halved: 250 to about 120
See page 22 of pre-seen material |
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| 2017-01-05 09:59:49 | What is the gist of the 1st Daily News press clipping? | gist-1st-daily-news-press-clipping |
What is the gist of the 1st Daily News press clipping?
Answer:
Singer’s attempted suicide
See page 23 of pre-seen material |
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| 2017-01-05 10:00:44 | What is the gist of the 1st Financial Daily News press clipping? | gist-1st-financial-daily-news-press-clipping |
What is the gist of the 1st Financial Daily News press clipping?
Answer:
Share price and profit fall yet dividends maintained
See page 24 of pre-seen material |
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| 2017-01-05 10:01:00 | What is the gist of the 2nd Financial Daily News press clipping? | gist-2nd-financial-daily-news-press-clipping |
What is the gist of the 2nd Financial Daily News press clipping?
Answer:
Bonds downgraded to junk: insufficient equity and doubts over business model
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| 2017-01-05 10:01:15 | What is the gist of the 2nd Daily News press clipping | gist-2nd-daily-news-press-clipping |
What is the gist of the 2nd Daily News press clipping
Answer:
Revamp of The Cavern using an old submarine!
See page 25 of pre-seen material |
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| 2017-01-05 10:01:30 | What is the gist of the Daily News clip on Evestar’s rival | gist-daily-news-clip-evestars-rival |
What is the gist of the Daily News clip on Evestar’s rival
Answer:
Protest because celebrity ‘chefs’ are overpaid and have no talent. The company has plans to extend the format to other pursuits
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| 2017-01-05 10:02:01 | What is the approximate ration of costs making Teeland Variety compared to Celebrity Restaurant | approximate-ration-costs-making-teeland-variety-compared-celebrity-restaurant |
What is the approximate ratio of costs making Teeland Variety compared to Celebrity Restaurant?
Answer:
2.6
See page 27 of pre-seen material |
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| 2017-01-05 10:02:30 | What are the most significant areas of cost differences | significant-areas-cost-differences |
What are the most significant areas of cost differences between Teeland Variety and Celebrity Restaurants?
See page 27 of pre-seen material |
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| 2017-01-05 10:26:33 | In what country is Mavis Venderby based in, and what currency do they use? | country-mavis-venderby-based-currency-use |
In what country is Mavis Venderby based in, and what currency do they use?
Answer:
Tucland
T$
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| 2017-01-05 10:27:02 | What are the three products that Mavis Venderby sells? | three-products-mavis-venderby-sells |
What are the three products that Mavis Venderby sells?
Answer:
See Page 3 of pre-seen material |
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| 2017-01-05 10:27:29 | How many bees does a single colony contain at the peak of the honey season? | many-bees-single-colony-contain-peak-honey-season |
How many bees does a single colony contain at the peak of the honey season?
Answer:
Around 60,000 bees
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| 2017-01-05 10:38:11 | What types of beehive does Mavis Venderby sell? | types-beehive-mavis-venderby-sell |
What types of beehive does Mavis Venderby sell?
Answer:
Box hives and slatted hives
See Page 5 of pre-seen material |
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| 2017-01-05 10:38:27 | From what types of wood are the beehives made? | types-wood-beehives-made |
From what types of wood are the beehives made?
Answer:
Cedar and Pine
See Page 5 of pre-seen material |
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| 2017-01-05 10:38:50 | Which is the only product sold by Mavis Venderby that is bought in from a supplier | product-sold-mavis-venderby-bought-supplier | Which is the only product sold by Mavis Venderby that is bought in from a supplier rather than manufactured by themselves?
Answer:
Frames are bough in from a supplier
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| 2017-01-05 10:39:11 | What are the peak months for sales of hives, foundations and frames | peak-months-sales-hives-foundations-frames |
What are the peak months for sales of hives, foundations and frames, and what % of sales by value are made during this period?
Answer:
70% of sales are made during the period March through to July
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| 2017-01-05 10:39:28 | What are the three stages in the production of beehives? | three-stages-production-beehives |
What are the three stages in the production of beehives?
Answer:
Drying, cutting, and packing
See Page 8 of pre-seen material |
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| 2017-01-05 10:39:44 | Which wood has the higher level of wastage in the cutting process – cedar or pine? | wood-higher-level-wastage-cutting-process-cedar-pine |
Which wood has the higher level of wastage in the cutting process – cedar or pine?
Answer:
Pine – there are more imperfections in the wood
See Page 8 of pre-seen material |
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| 2017-01-05 10:40:00 | How are orders shipped to customers? | orders-shipped-customers |
How are orders shipped to customers?
Answer:
All orders are shipped via a courier service
See Page 8 of pre-seen material |
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| 2017-01-05 10:40:15 | How are stacks of foundation kept fresh, ready for sale? | stacks-foundation-kept-fresh-ready-sale |
How are stacks of foundation kept fresh, ready for sale?
Answer:
They are wrapped ten sheets at a time, in polythene
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| 2017-01-05 10:40:36 | What % of sales by value were made to hobby beekeepers | sales-value-made-hobby-beekeepers |
What % of sales by value were made to hobby beekeepers and what % to commercial beekeepers during the year to 29 February 2016?
Answer:
50% to each
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| 2017-01-05 10:40:53 | How many days credit are allowed to commercial beekeepers? | many-days-credit-allowed-commercial-beekeepers |
How many days credit are allowed to commercial beekeepers?
Answer:
30 days
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| 2017-01-05 10:41:29 | What % of sales by value were made though each of the various sales channels during the year to 29 February 2016? | sales-value-made-though-various-sales-channels-year-29-february-2016 |
What % of sales by value were made though each of the various sales channels during the year to 29 February 2016?
Answer:
20% through the store; 35% over the telephone; 45% through the website
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| 2017-01-05 10:41:47 | From how many suppliers does Mavis Venderby buy wood? | many-suppliers-mavis-venderby-buy-wood |
From how many suppliers does Mavis Venderby buy wood?
Answer:
Two suppliers
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| 2017-01-05 10:42:07 | What is your position in Mavis Venderby? | position-mavis-venderby |
What is your position in Mavis Venderby?
Answer:
You are the Finance Officer
See Page 12 of pre-seen material |
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| 2017-01-05 10:42:17 | How many production employees are there (split between direct and indirect)? | many-production-employees-split-direct-indirect |
How many production employees are there (split between direct and indirect)?
Answer:
165 of which 21 are indirect and 144 are direct
See Page 15 of pre-seen material |
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| 2017-01-05 10:42:37 | What was the Return on Capital Employed for the year ended 29 February 2016? | return-capital-employed-year-ended-29-february-2016 |
What was the Return on Capital Employed for the year ended 29 February 2016?
Answer:
2,959 / (11,343 + 1,250) = 23.5%
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| 2017-01-05 10:42:59 | What was the Quick (Acid-test) Ratio as at 29 February 2016? | quick-acid-test-ratio-29-february-2016 |
What was the Quick (Acid-test) Ratio as at 29 February 2016?
Answer:
(5,350 – 4,351) / 1629 = 0.61
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| 2017-01-05 10:43:09 | What was the net cash amount invested in property, plant and equipment during the year ended 29 February 2016? | net-cash-amount-invested-property-plant-equipment-year-ended-29-february-2016 |
What was the net cash amount invested in property, plant and equipment during the year ended 29 February 2016?
Answer:
T$ 3,000,000
See Page 17 of pre-seen material |
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| 2017-01-05 10:43:28 | What % of the budgeted sales revenue for the year ended 28 February 2018 | budgeted-sales-revenue-year-ended-28-february-2018 |
What % of the budgeted sales revenue for the year ended 28 February 2018 is from sales of Foundations?
Answer:
6.336M/18.972M = 33.4%
See Page 18 of pre-seen material |
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| 2017-01-05 10:43:42 | What is the budgeted gross profit % for the year ended 28 February 2018? | budgeted-gross-profit-year-ended-28-february-2018 |
What is the budgeted gross profit % for the year ended 28 February 2018?
Answer:
4.649M/18.972M = 24.5%
See Page 18 of pre-seen material |
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| 2017-01-05 10:44:05 | On what basis are packing costs absorbed when calculating the cost of hives? | basis-packing-costs-absorbed-calculating-cost-hives |
On what basis are packing costs absorbed when calculating the cost of hives?
Answer:
On the basis of direct labour hours
See Page 20 of pre-seen material |
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| 2017-01-05 10:44:37 | On what basis are cutting costs absorbed when calculating the cost of hives? | basis-cutting-costs-absorbed-calculating-cost-hives |
On what basis are cutting costs absorbed when calculating the cost of hives?
Answer:
On the basis of machine hours
See Page 20 of pre-seen material |
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| 2017-01-05 10:45:35 | On what basis are drying costs absorbed when calculating the cost of hives? | basis-drying-costs-absorbed-calculating-cost-hives |
On what basis are drying costs absorbed when calculating the cost of hives?
Answer:
On the basis of wood value
See Page 20 of pre-seen material |
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| 2017-01-05 10:45:51 | Does Mavis Venderby use absorption or marginal costing? | mavis-venderby-use-absorption-marginal-costing |
Does Mavis Venderby use absorption or marginal costing?
Answer:
Absorption costing
See Page 22 of pre-seen material |
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| 2017-01-05 10:46:06 | What are the five cost centres within Mavis Venderby? | five-cost-centres-within-mavis-venderby |
What are the five cost centres within Mavis Venderby?
Answer:
Drying; cutting; foundation; packing; goods inwards & maintenance
See Page 22 of pre-seen material |
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| 2017-01-05 10:46:21 | Which of the five cost centres is/are treated as a service centre when re-apportioning overheads? | five-cost-centres-isare-treated-service-centre-re-apportioning-overheads |
Which of the five cost centres is/are treated as a service centre when re-apportioning overheads?
Answer:
Goods inwards & maintenance
See Page 22 of pre-seen material |
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| 2017-01-05 10:46:41 | What are the expected quality reject rates for each of cedar hives and pine hives? | expected-quality-reject-rates-cedar-hives-pine-hives |
What are the expected quality reject rates for each of cedar hives and pine hives?
Answer:
4% for cedar hives and 7.5% for pine hives
See Page 22 of pre-seen material |
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| 2017-01-05 10:47:25 | Approximately how many hobby beekeepers are there in Tucland? | approximately-many-hobby-beekeepers-tucland |
Approximately how many hobby beekeepers are there in Tucland?
Answer:
200,000
See Page 23 of pre-seen material |
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| 2017-01-05 10:47:43 | It appears that many beekeepers are changing from buying hives made of wood to hives made from what material? | appears-many-beekeepers-changing-buying-hives-made-wood-hives-made-material |
It appears that many beekeepers are changing from buying hives made of wood to hives made from what material?
Answer:
Polystyrene
See Page 24 of pre-seen material |
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| 2017-01-05 10:48:06 | Does Mavis Venderby produce hives from any material other what wood? | mavis-venderby-produce-hives-material-wood |
Does Mavis Venderby produce hives from any material other what wood?
Answer:
No – only wood
See Page 24 of pre-seen material |
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| 2017-01-05 10:48:26 | What % of wooden beehives purchased in Tucland are produced by Mavis Venderby? | wooden-beehives-purchased-tucland-produced-mavis-venderby |
What % of wooden beehives purchased in Tucland are produced by Mavis Venderby?
Answer:
20% by volume
See Page 25 of pre-seen material |
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| 2017-01-05 10:48:37 | What are the three car models that Ashworth Lea produces? | beehives-tucland-made-wood |
What are the three car models that Ashworth Lea produces?
Regent, Regale and Royale
See Page 3 of pre-seen material |
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| 2017-03-25 10:23:06 | In what country is Ashworth Lea based, and what currency do they use? | country-ashworth-lea-based-currency-use |
In what country is Ashworth Lea based, and what currency do they use?
Answer:
Mayland
M$
See Page 2 of pre-seen material |
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| 2017-03-25 10:23:28 | What are the three car models that Ashworth Lea produces? | three-car-models-ashworth-lea-produces |
What are the three car models that Ashworth Lea produces?
Answer:
Regent, Regale and Royale
See Page 3 of pre-seen material |
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| 2017-03-25 10:23:47 | What is the average production time per vehicle? | average-production-time-per-vehicle |
What is the average production time per vehicle?
Answer:
250 hours
See Page 3 of pre-seen material |
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| 2017-03-25 10:24:07 | What are the five key production and manufacturing activities? | five-key-production-manufacturing-activities |
What are the five key production and manufacturing activities?
Answer:
Inbound logistics; Assembly and production; Main vehicle assembly; Vehicle testing; Outbound logistics
See Page 4 of pre-seen material |
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| 2017-03-25 10:24:25 | How is the ownership of Ashworth Lea split between DOM, | ownership-ashworth-lea-split-dom |
How is the ownership of Ashworth Lea split between DOM, INV Group and families of the original owners?
Answer:
DOM 15%, INV Group 45%, families of the original owners 40%.
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| 2017-03-25 13:38:56 | By 2030, what % of new cars are estimated will be | 2030-new-cars-estimated-will |
By 2030, what % of new cars are estimated will be fully autonomous (i.e. completely self driving)?
Answer:
15%
See Page 5 of pre-seen material |
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| 2017-03-25 13:39:28 | In what way are Ashworth Lea keen to collaborate with the government of Mayland in promoting their ‘green’ credentials? | way-ashworth-lea-keen-collaborate-government-mayland-promoting-green-credentials |
In what way are Ashworth Lea keen to collaborate with the government of Mayland in promoting their ‘green’ credentials?
Answer:
Producing hydrogen by electrolysis
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| 2017-03-25 13:39:51 | What was the % increase in global new car sales for 2016 over 2015? | increase-global-new-car-sales-2016-2015 |
What was the % increase in global new car sales for 2016 over 2015?
Answer:
5.4% (76.5M up from 72.6M)
See Page 7 of pre-seen material |
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| 2017-03-25 13:40:06 | What are the three most important industry challenges? | three-important-industry-challenges |
What are the three most important industry challenges?
Answer:
Shifts in consumer demand, changes in technology, and increasing regulatory requirements
See Page 9 of pre-seen material |
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| 2017-03-25 13:40:27 | What is the expected annual growth rate in overall global car sales expected to be by 2030? | expected-annual-growth-rate-overall-global-car-sales-expected-2030 |
What is the expected annual growth rate in overall global car sales expected to be by 2030?
Answer:
2%
See Page 11 of pre-seen material |
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| 2017-03-25 13:41:30 | What is your position in Ashworth Lea, and who do you report to? | position-ashworth-lea-report |
What is your position in Ashworth Lea, and who do you report to?
Answer:
Finance officer reporting to Aaron Jenkins
See Page 12 of pre-seen material |
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| 2017-03-25 13:42:57 | What was the gross profit margin for Ashworth Lea in 2016? | gross-profit-margin-ashworth-lea-2016 |
What was the gross profit margin for Ashworth Lea in 2016?
Answer:
32.6% (390/1196)
See Page 15 of pre-seen material |
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| 2017-03-25 13:43:13 | What has caused the operating profit to fall from 2015 to 2016? | caused-operating-profit-fall-2015-2016 |
What has caused the operating profit to fall from 2015 to 2016?
Answer:
The increase in the administration expenses from 206 to 227
See Page 15 of pre-seen material |
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| 2017-03-25 13:43:29 | What was the current ratio as at 31 December 2016? | current-ratio-31-december-2016 |
What was the current ratio as at 31 December 2016?
Answer:
1.22 (422/346)
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| 2017-03-25 13:43:43 | What was the Return on Capital employed for the year ended 31 December 2016? | return-capital-employed-year-ended-31-december-2016 |
What was the Return on Capital employed for the year ended 31 December 2016?
Answer:
0.79% ( 10 / (779+487))
See Page 16 of pre-seen material |
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| 2017-03-25 13:44:02 | What was the nature of the largest outflow of cash during 2016? | nature-largest-outflow-cash-2016 |
What was the nature of the largest outflow of cash during 2016?
Answer:
The increase in intangibles of 281
See Page 17 of pre-seen material |
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| 2017-03-25 13:44:14 | How much was raised from borrowings during 2016? | much-raised-borrowings-2016 |
How much was raised from borrowings during 2016?
Answer:
147
See Page 17 of pre-seen material |
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| 2017-03-25 13:44:30 | What is the corporate tax rate in Mayland? | corporate-tax-rate-mayland |
What is the corporate tax rate in Mayland?
Answer:
20%
See Page 18 of pre-seen material |
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| 2017-03-25 13:44:58 | What tax depreciation allowances are available on items of plant and machinery in Mayland? | tax-depreciation-allowances-available-items-plant-machinery-mayland |
What tax depreciation allowances are available on items of plant and machinery in Mayland?
Answer:
25% per year on a reducing balance basis
See Page 18 of pre-seen material |
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| 2017-03-25 13:45:31 | How many cars in total is Ashworth Lea budgeting on producing in 2017? | many-cars-total-ashworth-lea-budgeting-producing-2017 |
How many cars in total is Ashworth Lea budgeting on producing in 2017?
Answer:
6,000
See Page 19 of pre-seen material |
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| 2017-03-25 13:46:19 | What total sales revenue is Ashworth Lea budgeting for 2017? | total-sales-revenue-ashworth-lea-budgeting-2017 |
What total sales revenue is Ashworth Lea budgeting for 2017?
Answer:
M$1,224,500,000
See Page 19 of pre-seen material |
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| 2017-03-25 13:46:34 | Which of the three car models is budgeted on generating the highest gross profit per unit in 2017? | three-car-models-budgeted-generating-highest-gross-profit-per-unit-2017 |
Which of the three car models is budgeted on generating the highest gross profit per unit in 2017?
Answer:
Regale – MS70,900 per unit
See Page 19 of pre-seen material |
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| 2017-03-25 13:46:49 | What % of 2017 budgeted revenue is expected to come from the Royale model? | 2017-budgeted-revenue-expected-come-royale-model |
What % of 2017 budgeted revenue is expected to come from the Royale model?
Answer:
41% (500,000/1,224,500)
See Page 19 of pre-seen material |
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| 2017-03-25 13:47:06 | How many self-drive cars are budgeted to be produced in 2017? | many-self-drive-cars-budgeted-produced-2017 |
How many self-drive cars are budgeted to be produced in 2017?
Answer:
45
See Page 20 of pre-seen material |
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| 2017-03-25 13:48:04 | What profit margin (%) on self-drive cars is budgeted for 2017? | profit-margin-self-drive-cars-budgeted-2017 |
What profit margin (%) on self-drive cars is budgeted for 2017?
Answer:
10% (450/4,500)
See Page 20 of pre-seen material |
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| 2017-03-25 13:48:48 | How much government funding will be available for bodies adding hydrogen-powered vehicles to their fleets | much-government-funding-will-available-bodies-adding-hydrogen-powered-vehicles-fleets |
How much government funding will be available for bodies adding hydrogen-powered vehicles to their fleets
Answer:
M$ 4M
See Page 21 of pre-seen material |
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| 2017-03-25 13:49:04 | How many hydrogen refuelling stations currently exist in Mayland? | many-hydrogen-refuelling-stations-currently-exist-mayland |
How many hydrogen refuelling stations currently exist in Mayland?
Answer:
5
See Page 21 of pre-seen material |
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| 2017-03-25 13:49:20 | How many seats does the Royale car model have? | many-seats-royale-car-model |
How many seats does the Royale car model have?
Answer:
4
See Page 3 of pre-seen material |
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| 2017-03-25 13:49:35 | How many staff are employed in the assembly facilities? | many-staff-employed-assembly-facilities |
How many staff are employed in the assembly facilities?
Answer:
650
See Page 3 of pre-seen material |
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| 2017-03-25 13:49:53 | Who supplies the aluminium body pressings that make up the car bodies? | supplies-aluminium-body-pressings-make-car-bodies |
Who supplies the aluminium body pressings that make up the car bodies?
Answer:
APC
See Page 3 of pre-seen material |
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| 2017-03-25 13:50:16 | What is the purpose of the ‘inbound logistics’ activity? | purpose-inbound-logistics-activity |
What is the purpose of the ‘inbound logistics’ activity?
Answer:
Ensuring adequate inventory and safe storage of the inventory for use as required by production
See Page 4 of pre-seen material |
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| 2017-03-31 08:10:52 | What type of retail stores do BES Group operate? What do these stores sell? | type-retail-stores-bes-group-operate-stores-sell | What type of retail stores do BES Group operate? What do these stores sell? Answer: BES Group are a chain of value retail stores who sell general merchandise at a single price point (1E$) BES sell a wide range of items; food, household goods, stationery and clothing. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:11:17 | What country do BES operate and what is their home currency? | country-bes-operate-home-currency | What country do BES operate and what is their home currency? Answer: They operate in country E where the currency is the E dollar (E$) | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:11:41 | What is the average selling price of BES retail products? | average-selling-price-bes-retail-products | What is the average selling price of BES retail products? Answer: All products have a selling price of 1E$. This is a key part of BES’s competitive strategy and store branding. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:12:44 | What have competing supermarkets done in response to BES 1E$ single price point strategy? | competing-supermarkets-done-response-bes-1e-single-price-point-strategy | What have competing supermarkets done in response to BES 1E$ single price point strategy? Answer: The supermarkets have launched their own 1E$ fixed price range of products. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:13:11 | From the three categories of product ( third party branded, BES branded and unbranded) | three-categories-product-third-party-branded-bes-branded-unbranded | From the three categories of product ( third party branded, BES branded and unbranded) - which does an average BES store hold the most stock? Answer: Unbranded products are held in the highest proportions and represent 45% of the average stock holding ( average 900 unbranded units within 2000 units held) | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:13:26 | Can any product which is available to buy from BES | can-product-available-buy-bes | Can any product which is available to buy from BES ( third party brands, unbranded and BES branded) also be purchased from other sellers? Answer: Third party and unbranded yes – but customers can only buy BES branded items at BES stores. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:17:07 | How does the BES price point work when individual products | bes-price-point-work-individual-products | How does the BES price point work when individual products have a market selling price which is significantly lower than $1E per unit? Example – soft drink can. Answer: Small low price items can be bundled together and sold for 1E$. E.g. 4 cans of drink can be sold together for 1E$ | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:17:35 | How do BES procure such low costs for their branded and third party products? | bes-procure-low-costs-branded-third-party-products | How do BES procure such low costs for their branded and third party products? Answer: BES buy in bulk to reduce unit costs. They also purchase directly from manufacturers. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:18:10 | BES have a policy of procuring no more than 5% of their products from one single supplier. | bes-policy-procuring-no-5-products-one-single-supplier | BES have a policy of procuring no more than 5% of their products from one single supplier. Why do you think they follow this policy? Can you see a link to any theoretical models covered by CIMA E2? Answer: The pressure of competition between the multiple suppliers should ensure cost prices stay low. The choice and variety of products available from multiple suppliers allows BES to offer a wide product range. The case does not say explicitly but it is likely that BES are keen to ensure individual supplier strength says low. This could be linked to Porter’s 5 forces model. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:19:18 | How do BES use the design process to achieve lower costs for some of their own branded products? | bes-use-design-process-achieve-lower-costs-branded-products | How do BES use the design process to achieve lower costs for some of their own branded products? What type of costing may be utilised here? Answer: Some of BES own branded products are created with aim of ‘designing out’ costs – this is a feature of Lifecycle costing and may link to Target costing ( both P2 syllabus). | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:19:40 | How often does BES refresh their product lines? | often-bes-refresh-product-lines | How often does BES refresh their product lines? Answer: New products are added every week. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:21:51 | What is BES’s plan for future growth? | bess-plan-future-growth | What is BES’s plan for future growth? Answer: BES wish to expand by opening new stores home country as well as hoping to expand internationally. They have no intention to sell online. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:22:11 | What is an Specialist Value ( SV) retailer and what is their competitive strategy? | specialist-value-sv-retailer-competitive-strategy | What is an Specialist Value ( SV) retailer and what is their competitive strategy? Answer: SV retailers are one of the categories of competitors who operate in the value retail sector. SV retailers are specialists in a narrow range of products categories – e.g. beauty products. They aim to undercut other retailers of similar products but do not usually operate with a single price point. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:22:28 | The market position analysis tells us there are four main categories of value retailers | market-position-analysis-tells-us-four-main-categories-value-retailers | The market position analysis tells us there are four main categories of value retailers (abbreviated as SPP, LAD VGM and SV). Which category of value retailer does BES fall into and what is its position within that category? Answer: BES is a single price point (SPP) retailer. BES is currently largest of the SPP retailers. They have greatest number of stores and widest range of products. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:23:26 | What did the customer survey show to be the least important reason that customers shopped at value retailer stores | customer-survey-show-least-important-reason-customers-shopped-value-retailer-stores | What did the customer survey show to be the least important reason that customers shopped at value retailer stores Answer: According to the customer survey – retailer reputation is least important reason for shopping at a value chain. Only 4% of those asked placed high level of importance on this factor. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:23:51 | What type of organisational structure does BES operate? (functional, divisional or matrix). | type-organisational-structure-bes-operate-functional-divisional-matrix | What type of organisational structure does BES operate? (functional, divisional or matrix). Answer: BES Group is an example of divisional structure with the company organised according to geographical areas. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:24:31 | How many executive directors are there on BES board? Which director takes responsibility for areas of purchasing and supplier contracts? | many-executive-directors-bes-board-director-takes-responsibility-areas-purchasing-supplier-contracts | How many executive directors are there on BES board? Which director takes responsibility for areas of purchasing and supplier contracts? Answer: 7 executives including CEO. The Supply Chain Director is responsible for purchasing and supplier contracts. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:24:51 | Why were the police called to BES stores recently? | police-called-bes-stores-recently | Why were the police called to BES stores recently? Answer: A new store opening had a ‘special buys’ promotional launch which offered chance to buy special items such as TVs for 1$E. Demand was so great that police had to be called to restore order. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:25:17 | What is the net profit margin for BES as per the most recent financial statements? Has this increased or decreased from previous year. | net-profit-margin-bes-per-recent-financial-statements-increased-decreased-previous-year | What is the net profit margin for BES as per the most recent financial statements? Has this increased or decreased from previous year. Answer: Net profit margin [net profit/turnover x 100] for yr2016 is 9.47% This has increased from 8.9% in 2015. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:25:36 | What is BES current ratio for year 2016. What does this indicate for the company? | bes-current-ratio-year-2016-indicate-company | What is BES current ratio for year 2016. What does this indicate for the company? Answer: The current ratio (current assets/ current liabilities) is 0.6:1 . In most industries this would be very low and may indicate liquidity problems but a low current ratio is common in supermarket sector. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:25:55 | What relevance has country X to BES Group. | relevance-country-x-bes-group | What relevance has country X to BES Group. Answer: BES have opened 5 trial stores in country X which is a neighbouring country. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:27:39 | How many stores does BES operate in their domestic country E? | many-stores-bes-operate-domestic-country-e | How many stores does BES operate in their domestic country E? Answer: 235 stores in country E. NB) They also have 5 stores are in country X. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:27:59 | What is the general trend shown by profits and revenues for BES group? | general-trend-shown-profits-revenues-bes-group | What is the general trend shown by profits and revenues for BES group? Answer: Profits and revenues have steadily increased – shown in the recent financial statements and the trend over 5 years’ data. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:28:19 | For a typical BES store budget. Do wages represent more or less than 20% of the total budgeted expenditure? | typical-bes-store-budget-wages-represent-less-20-total-budgeted-expenditure | For a typical BES store budget. Do wages represent more or less than 20% of the total budgeted expenditure? Answer: Less than 20% - i.e. wages are 14% of store average budget. Total budget expenditure for typical store is 1530583 – wages make up 216,000 of this which is 14% of total expenditure. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:29:06 | If Country E experiences a period of sustained inflation – why could this impact negatively on profits for BES? | country-e-experiences-period-sustained-inflation-impact-negatively-profits-bes | If Country E experiences a period of sustained inflation – why could this impact negatively on profits for BES? Answer: Inflation will mean that cost prices for supplies are likely to increase- however BES are constrained by the SPP of 1$E and this could restrict them from increasing their selling price to pass costs onto the customer | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:29:25 | How important are BES IT systems to the operation of the business? | important-bes-systems-operation-business | How important are BES IT systems to the operation of the business? Answer: Very important – BES is ‘highly dependent’ on IT systems to manage sales, stock and cash. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:29:56 | Who are VES group? | who-are-ves-group | Who are VES group? Answer: VES are BES main competitor. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:30:13 | What proportion of BES stores are in town centres? | proportion-bes-stores-town-centres | What proportion of BES stores are in town centres? Answer: 90% of BES stores have town centre locations. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:30:30 | Which category of value retailer would VES be classified? | category-value-retailer-ves-classified | Which category of value retailer would VES be classified? Answer: VES is a SPP (single price point) value retailer. It sells most of its products for 99cents. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-03-31 08:31:29 | State one difference between VES and BES in terms of its business operations. | state-one-difference-ves-bes-terms-business-operations |
State one difference between VES and BES in terms of its business operations.
Answer:
|
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| 2017-03-31 08:32:33 | What is the trend showing in VES financial statements in terms of revenue and profit. | trend-showing-ves-financial-statements-terms-revenue-profit | What is the trend showing in VES financial statements in terms of revenue and profit. Answer: VES revenue has increased but gross profit and net profit have both decreased quite significantly. | ||||||||||||||||||||||||||||||||||||||||||
| 2017-04-06 17:02:34 | What are the four categories of the soft drinks market? | four-categories-soft-drinks-market |
What are the four categories of the soft drinks market?
Answer:
Still off-trade
Still on-trade
Carbonated off-trade
Carbonated on-trade
See Page 3, 4, 5 of pre-seen material |
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| 2017-04-06 17:03:12 | What is the approximate ratio in Nortland of off-trade to on-trade drinks by value? | approximate-ratio-nortland-off-trade-trade-drinks-value |
What is the approximate ratio in Nortland of off-trade to on-trade drinks by value?
Answer:
2:1
See Page 6 of pre-seen material |
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| 2017-04-06 17:03:51 | Which type of sale (on-sale or off-sale) has the higher profit margin? | type-sale-sale-off-sale-higher-profit-margin |
Which type of sale (on-sale or off-sale) has the higher profit margin?
Answer:
On-sale
See Page 6 of pre-seen material |
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| 2017-04-06 17:04:29 | What product is the premium brand of Fizz? | product-premium-brand-fizz |
What product is the premium brand of Fizz?
Answer:
Joocy Juice
See Page 7 of pre-seen material |
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| 2017-04-06 17:04:47 | What is the name of the drink with the highest caffeine content? | name-drink-highest-caffeine-content |
What is the name of the drink with the highest caffeine content?
Answer:
Funn
See Page 6 of pre-seen material |
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| 2017-04-06 17:06:16 | Which company is Fizz’s main competitor? | company-fizzs-main-competitor |
Which company is Fizz’s main competitor?
Answer:
Qwench
See Page 7 of pre-seen material |
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| 2017-04-06 17:07:22 | How many factories does Fizz have for carbonated drinks and cordials? | many-factories-fizz-carbonated-drinks-cordials |
How many factories does Fizz have for carbonated drinks and cordials?
Answer:
One
See Page 8 of pre-seen material |
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| 2017-04-06 17:07:49 | Who makes Joocy Juice? | makes-joocy-juice |
Who makes Joocy Juice?
Answer:
Third parties near where the fruit is grown
See Page 8 of pre-seen material |
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| 2017-04-06 17:08:11 | Approximately what proportion of the cost of Froot is material cost? | approximately-proportion-cost-froot-material-cost |
Approximately what proportion of the cost of Froot is material cost?
Answer:
67%
See Page 9 of pre-seen material |
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| 2017-04-06 17:08:46 | What are the two departments looked after by the marketing director? | two-departments-looked-marketing-director | What are the two departments looked after by the marketing director?
Answer:
Logistics
Sales
See Page 10 of pre-seen material |
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| 2017-04-06 17:09:12 | How many NEDs does the company have and does this appear to achieve the required balance? | many-neds-company-appear-achieve-required-balance |
How many NEDs does the company have and does this appear to achieve the required balance?
Answer:
Four; no
See Page 11 of pre-seen material |
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| 2017-04-06 17:09:37 | According to the risk register, what are the four highest risk factors? | according-risk-register-four-highest-risk-factors |
According to the risk register, what are the four highest risk factors?
Answer:
Failure of IT
Disruption of deliveries
Changing consumer tastes
Financial risks such as currency and commodity prices
See Page 12, 13 of pre-seen material |
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| 2017-04-06 17:09:56 | What risk factor seems to be understated given the press clippings provided? | risk-factor-seems-understated-given-press-clippings-provided |
What risk factor seems to be understated given the press clippings provided?
Answer:
Legislation or tax to discourage the sale of high calorie products
See Page 13 of pre-seen material |
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| 2017-04-06 17:10:16 | What are Fizz’s three main strategies? | fizzs-three-main-strategies |
What are Fizz’s three main strategies?
Answer:
Maintain growth in core markets.
Exploit global opportunities.
Develop consumer trust
See Page 14 of pre-seen material |
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| 2017-04-06 17:10:37 | Have Fizz’s profits increased or decreased from 2015 to 2016? | fizzs-profits-increased-decreased-2015-2016 |
Have Fizz’s profits increased or decreased from 2015 to 2016?
Answer:
Decreased
See Page 15 of pre-seen material |
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| 2017-04-06 17:11:03 | Have Fizz’s revenues increased or decreased from 2015 to 2016? | fizzs-revenues-increased-decreased-2015-2016 |
Have Fizz’s revenues increased or decreased from 2015 to 2016?
Answer:
Decreased
See Page 15 of pre-seen material |
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| 2017-04-06 17:11:32 | Have Fizz’s operating expenses increased or decreased from 2015 to 2016? | fizzs-operating-expenses-increased-decreased-2015-2016 |
Have Fizz’s operating expenses increased or decreased from 2015 to 2016?
Answer:
Increased
See Page 15 of pre-seen material |
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| 2017-04-06 17:12:30 | Have inventory days increased or decreased from 2015 to 2016? | inventory-days-increased-decreased-2015-2016 |
Have inventory days increased or decreased from 2015 to 2016?
Answer:
Increased by around 37%
See Page 15, 16 of pre-seen material |
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| 2017-04-06 17:12:50 | Does it look as though Fizz has either liquidity problems or gearing problems? | look-though-fizz-either-liquidity-problems-gearing-problems |
Does it look as though Fizz has either liquidity problems or gearing problems?
Answer:
No, Current ratio 1.9. Gearing ratios low and interest cover high
See Page 15, 16 of pre-seen material |
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| 2017-04-06 17:13:10 | Have Qwench’s’s profits increased or decreased from 2015 to 2016? | qwenchss-profits-increased-decreased-2015-2016 |
Have Qwench’s’s profits increased or decreased from 2015 to 2016?
Answer:
Decreased
See Page 17 of pre-seen material |
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| 2017-04-06 17:13:25 | Have Qwench’s revenues increased or decreased from 2015 to 2016? | qwenchs-revenues-increased-decreased-2015-2016 |
Have Qwench’s revenues increased or decreased from 2015 to 2016?
Answer:
Decreased
See Page 17 of pre-seen material |
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| 2017-04-06 17:13:44 | Have Qwench’s operating expenses increased or decreased from 2015 to 2016? | qwenchs-operating-expenses-increased-decreased-2015-2016 |
Have Qwench’s operating expenses increased or decreased from 2015 to 2016?
Answer:
Decreased
See Page 17 of pre-seen material |
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| 2017-04-06 17:14:18 | Is Qwench larger or smaller than Fizz in terms of revenue and by approximately what multiple | qwench-larger-smaller-fizz-terms-revenue-approximately-multiple |
Is Qwench larger or smaller than Fizz in terms of revenue and by approximately what multiple
Answer:
Qwench is x 5 larger
See Page 15, 17 of pre-seen material |
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| 2017-04-06 17:14:31 | Does Qwench use derivatives? | qwench-use-derivatives |
Does Qwench use derivatives?
Answer:
Yes
See Page 19 of pre-seen material |
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| 2017-04-06 17:14:50 | Does Fizz use derivatives? | fizz-use-derivatives |
Does Fizz use derivatives?
Answer:
It would appear not as no mention in the risk register relating to currency volatility
See Page 13 of pre-seen material |
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| 2017-04-06 17:15:09 | What is the approximate median P/E ratio for the soft drink industry? | approximate-median-pe-ratio-soft-drink-industry |
What is the approximate median P/E ratio for the soft drink industry?
Answer:
26
See Page 21 of pre-seen material |
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| 2017-04-06 17:15:47 | Approximately what percentage of shares in Fizz is owned by the Clan family? | approximately-percentage-shares-fizz-owned-clan-family |
Approximately what percentage of shares in Fizz is owned by the Clan family?
Answer:
18%
See Page 6 of pre-seen material |
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| 2017-04-06 17:15:58 | What is Fizz’s most important carbonated product by sales value? | fizzs-important-carbonated-product-sales-value |
What is Fizz’s most important carbonated product by sales value?
Answer:
Cola
See Page 4 of pre-seen material |
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| 2017-04-06 17:16:16 | What is Fizz’s most important still product by sales value? | fizzs-important-still-product-sales-value |
What is Fizz’s most important still product by sales value?
Answer:
Pure juice
See Page 5 of pre-seen material |
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| 2017-04-06 17:16:32 | The Daily News has two articles about the same issue. What is that issue? | daily-news-two-articles-issue-issue | The Daily News has two articles about the same issue. What is that issue?
Answer:
Sugary drinks and obesity
See Page 22, 23 of pre-seen material |
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| 2017-04-06 17:16:58 | The Financial Daily News referred to a price fall | financial-daily-news-referred-price-fall | The Financial Daily News referred to a price fall of both Fizz’s shares and Qwench’s shares.
What caused the price fall and which share fell more?
Answer:
Decline in profits. Quench’s share price fell more because their post tax profits fell by 31% (Fizz’s fell by 24%)
See Page 22 of pre-seen material |
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| 2017-06-19 15:15:28 | In what country is Premium Trains based, and what currency do they use? | country-premium-trains-based-currency-use |
In what country is Premium Trains based, and what currency do they use?
Answer:
Tawland
T$
See Page 2 of pre-seen material |
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| 2017-06-19 15:16:03 | Premium Trains is a subsidiary of which company? | premium-trains-subsidiary-company | Premium Trains is a subsidiary of which company?
Answer:
Omni Travel Group
See Page 2 of pre-seen material |
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| 2017-06-19 15:16:21 | How many mainline routes does Premium Trains operate? | many-mainline-routes-premium-trains-operate |
How many mainline routes does Premium Trains operate?
Answer:
2
See Page 3 of pre-seen material |
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| 2017-06-19 15:18:06 | How much revenue did Premium Trains earn from mainline routes in 2015/2016 financial year? | much-revenue-premium-trains-earn-mainline-routes-20152016-financial-year |
How much revenue did Premium Trains earn from mainline routes in 2015/2016 financial year?
Answer:
T$234 million
See Page 3 of pre-seen material |
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| 2017-06-19 15:18:38 | What franchise fee does Premium Trains pay to Tawland Rail for the use of its assets? | franchise-fee-premium-trains-pay-tawland-rail-use-assets |
What franchise fee does Premium Trains pay to Tawland Rail for the use of its assets?
Answer:
TS51,000,000 a year
See Page 5 of pre-seen material |
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| 2017-06-19 15:21:20 | How many train units does Premium Rail operate? | how-many-train-units-does-premium-rail-operate |
How many train units does Premium Rail operate?
Answer:
25 (15 owned and 10 leased)
See Page 5 of pre-seen material |
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| 2017-06-19 16:53:14 | Between which stations and what is the distance for each of Premium Trains two routes? | stations-distance-premium-trains-two-routes |
Between which stations and what is the distance for each of Premium Trains two routes?
Answer:
Route 1: Between Westin and Central City – 450 kms
Route 2: Between Southtown and Central City – 350 kms
See Page 6 of pre-seen material |
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| 2017-06-19 16:53:33 | How many services a day (in total) does Premium Trains run? | many-services-day-total-premium-trains-run |
How many services a day (in total) does Premium Trains run?
Answer:
32 services per day in total
See Page 7 of pre-seen material |
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| 2017-06-19 16:53:55 | In which ways can passengers buy tickets? | ways-can-passengers-buy-tickets |
In which ways can passengers buy tickets?
Answer:
Through the Premium Trains website; Through the Trainmaster website; At the station
See Page 8 of pre-seen material |
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| 2017-06-19 16:54:13 | How long does it take for Premium Trains to receive the money for tickets purchased through Trainmaster? | long-take-premium-trains-receive-money-tickets-purchased-trainmaster |
How long does it take for Premium Trains to receive the money for tickets purchased through Trainmaster?
Answer:
2 months
See Page 8 of pre-seen material |
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| 2017-06-19 16:54:35 | How many man-hours does each annual train maintenance check take? | many-man-hours-annual-train-maintenance-check-take | How many man-hours does each annual train maintenance check take?
Answer:
850 man-hours
See Page 11 of pre-seen material |
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| 2017-06-19 16:55:09 | Who is the Finance Director of Premium Trains? | finance-director-premium-trains | Who is the Finance Director of Premium Trains?
Answer:
Fred Bowles
See Page 12 of pre-seen material |
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| 2017-06-19 16:55:32 | What was the % increase in revenue from 2016 to 2017? | 393524 |
What was the % increase in revenue from 2016 to 2017?
Answer:
2.97%
(240,817 – 233,866) / 233,866
See Page 14 of pre-seen material |
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| 2017-06-19 16:57:21 | What was the % increase in operating costs from 2016 to 2017? | increase-operating-costs-2016-2017 | What was the % increase in operating costs from 2016 to 2017?
Answer:
6.18%
(224,080 – 211,034) / 211,034
See Page 14 of pre-seen material |
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| 2017-06-19 16:57:40 | What was the Return on Capital employed for the year ended 30 June 2017? | return-capital-employed-year-ended-30-june-2017 |
What was the Return on Capital employed for the year ended 30 June 2017?
Answer:
46%
(16,387 / 35,377)
See Page 15 of pre-seen material |
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| 2017-06-19 16:58:30 | How much profit is the most profitable of the two routes budgeted to generate in the year ended 30 June 2018? | much-profit-profitable-two-routes-budgeted-generate-year-ended-30-june-2018 |
How much profit is the most profitable of the two routes budgeted to generate in the year ended 30 June 2018?
Answer:
Route 2
See Page 16 of pre-seen material |
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| 2017-06-19 17:00:15 | What % of total budgeted revenue for the year ended 30 June 2018 | total-budgeted-revenue-year-ended-30-june-2018 | What % of total budgeted revenue for the year ended 30 June 2018 is expected to be from first class passengers?
Answer:
25.5%
(13,407+11,463+14,780+12,874) /(47,558+47,153+58,985+52,256)
See Page 17 of pre-seen material |
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| 2017-06-19 17:00:38 | What is the budgeted profit margin for the ‘on-board café’ for the year ended 30 June 2018? | budgeted-profit-margin-board-cafe-year-ended-30-june-2018 |
What is the budgeted profit margin for the ‘on-board café’ for the year ended 30 June 2018?
Answer:
40.1%
(9,116 / 22,724)
See Page 18 of pre-seen material |
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| 2017-06-19 17:01:07 | Which element fared the worst in the customer satisfaction survey? | 393530 |
Which element fared the worst in the customer satisfaction survey?
Answer:
The on-board café
See Page 20 of pre-seen material |
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| 2017-06-19 17:01:38 | How many people in Tawland used non-commuter trains during 2016? | many-people-tawland-used-non-commuter-trains-2016 |
How many people in Tawland used non-commuter trains during 2016?
Answer:
12 million
See Page 22 of pre-seen material |
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| 2017-06-19 17:01:54 | What is the corporate tax rate in Tawland? | corporate-tax-rate-tawland |
What is the corporate tax rate in Tawland?
Answer:
25%
See Page 23 of pre-seen material |
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| 2017-06-19 17:02:11 | Which train operating company earned the most revenue from mainline routes in 2015/2016 financial year? | train-operating-company-earned-revenue-mainline-routes-20152016-financial-year |
Which train operating company earned the most revenue from mainline routes in 2015/2016 financial year?
Answer:
East Trains (T$263 million)
See Page 3 of pre-seen material |
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| 2017-06-19 17:02:33 | Which train operating company had the best punctuality performance in 2016? | 393534 |
Which train operating company had the best punctuality performance in 2016?
Answer:
East Trains
See Page 4 of pre-seen material |
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| 2017-06-19 17:03:14 | In what year did Premium Trains commence operations? | year-premium-trains-commence-operations |
In what year did Premium Trains commence operations?
Answer:
1991
See Page 5 of pre-seen material |
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| 2017-06-19 17:03:39 | Each train operates with how many members of staff? | train-operates-many-members-staff |
Each train operates with how many members of staff?
Answer:
6
See Page 9 of pre-seen material |
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| 2017-06-19 17:04:28 | How many difference rates of pay are there for train and station staff? | many-difference-rates-pay-train-station-staff |
How many difference rates of pay are there for train and station staff?
Answer:
3 (trainee, junior, and senior)
See Page 9 of pre-seen material |
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| 2017-06-19 17:04:49 | What feature of the on-board coffee does Premium Trains pride itself? | feature-board-coffee-premium-trains-pride |
What feature of the on-board coffee does Premium Trains pride itself?
Answer:
The quality of the coffee bean that is uses
See Page 10 of pre-seen material |
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| 2017-06-19 17:05:12 | As well as maintaining and repairing their own trains, Premium Trains | well-maintaining-repairing-trains-premium-trains |
As well as maintaining and repairing their own trains, Premium Trains performs the service for how many other train operating companies?
Answer:
3
See Page 11 of pre-seen material |
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| 2017-06-19 17:05:38 | Most suppliers of parts and consumables are paid within how many days? | suppliers-parts-consumables-paid-within-many-days |
Most suppliers of parts and consumables are paid within how many days?
Answer:
30 days
See Page 11 of pre-seen material |
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| 2017-06-19 17:05:57 | How many people are in the Finance team? | many-people-finance-team |
How many people are in the Finance team?
22 people (8 on the flowchart plus 14 finance officers)
See Page 13 of pre-seen material |
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| 2017-06-21 11:02:11 | What is your role/position in this case? | what-is-your-roleposition-in-this-case |
What is your role/position in this case?
Answer:
Financial manager, management accounting
See Page 2 of pre-seen material |
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| 2017-06-21 11:02:37 | What three developments relating to car production took place in the latter part of the 20th century? | three-developments-relating-car-production-took-place-latter-part-20th-century |
What three developments relating to car production took place in the latter part of the 20th century?
Answer:
• Modular components
• Common component sharing
• Robotics
See Page 3, 4 of pre-seen material |
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| 2017-06-21 11:03:04 | In what four areas of production is manual labour still needed? | four-areas-production-manual-labour-still-needed |
In what four areas of production is manual labour still needed?
Answer:
• Maintenance
• Production and control (production changeover)
• Unexpected events
• Complex tasks
See Page 4 of pre-seen material |
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| 2017-06-21 11:03:29 | In addition to production changes what else drove changes in the industry? | addition-production-changes-else-drove-changes-industry | In addition to production changes what else drove changes in the industry?
Answer:
Globalisation
See Page 4,5 of pre-seen material |
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| 2017-06-21 11:04:04 | In what type of cars does Aurora specialise? | type-cars-aurora-specialise |
In what type of cars does Aurora specialise?
Answer:
Not the cheapest but good value for money
See Page 6 of pre-seen material |
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| 2017-06-21 11:04:26 | In addition to cars, what else does the company make? | addition-cars-else-company-make |
In addition to cars, what else does the company make?
Answer:
Vans
See Page 6 of pre-seen material |
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| 2017-06-21 11:04:49 | What two aspects of car performance does the company believe to be crucial? | two-aspects-car-performance-company-believe-crucial |
What two aspects of car performance does the company believe to be crucial?
Answer:
• Better fuel efficiency
• Reductions in waste and emissions from the manufacturing process
• Health and safety
See Page 6 of pre-seen material |
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| 2017-06-21 11:05:07 | What is the company’s mission? | what-is-the-companys-mission |
What is the company’s mission?
Answer:
Our mission is to supply high-quality vehicles at a reasonable price for worldwide customer satisfaction
See Page 7 of pre-seen material |
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| 2017-06-21 11:05:25 | How does the company propose to fill gaps in its product range and pursue new geographic opportunities? | company-propose-fill-gaps-product-range-pursue-new-geographic-opportunities |
How does the company propose to fill gaps in its product range and pursue new geographic opportunities?
Answer:
Strategic alliances
See Page 7 of pre-seen material |
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| 2017-06-21 11:05:51 | What happens in the press shop? | happens-press-shop |
What happens in the press shop?
Answer:
Metal is cut and shaped
See Page 9 of pre-seen material |
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| 2017-06-21 11:06:33 | What happens in the body shop? | happens-body-shop | What happens in the body shop?
Answer:
Parts from the press shop are welded together
See Page 9 of pre-seen material |
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| 2017-06-21 11:06:54 | What happens in general assembly? | happens-general-assembly |
What happens in general assembly?
Answer:
The body shell, mechanical and electrical components are brought together
See Page 10 of pre-seen material |
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| 2017-06-21 11:07:12 | What happens in trim assembly? | happens-trim-assembly |
What happens in trim assembly?
Answer:
Non-mechanical parts are added (eg seats, bumpers)
See Page 11 of pre-seen material |
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| 2017-06-21 11:07:29 | What cars are Aurora’s dealers allowed to sell? | cars-auroras-dealers-allowed-sell |
What cars are Aurora’s dealers allowed to sell?
Answer:
Aurora cars from Aurora showrooms. Any cars from other showrooms
See Page 12 of pre-seen material |
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| 2017-06-21 11:08:11 | Who sets cars’ selling prices? Dealers or Aurora | sets-cars-selling-prices-dealers-aurora |
Who sets cars’ selling prices? Dealers or Aurora
Answer:
Aurora
See Page 12 of pre-seen material |
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| 2017-06-21 11:08:31 | Has the company’s profit increased or decreased from 2015 to 2016? | companys-profit-increased-decreased-2015-2016 |
Has the company’s profit increased or decreased from 2015 to 2016?
Answer:
Increased
See Page 16 of pre-seen material |
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| 2017-06-21 11:09:07 | Is the company’s liquidity good or bad? | companys-liquidity-good-bad |
Is the company’s liquidity good or bad?
Answer:
Good eg current ratio for 2016 = 2.9
See Page 17 of pre-seen material |
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| 2017-06-21 11:09:52 | Is interest cover good or bad? | interest-cover-good-bad |
Is interest cover good or bad?
Answer:
Good eg 14 for 2016
See Page 16 of pre-seen material |
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| 2017-06-21 11:10:11 | In which geographical area is most profit made? | geographical-area-profit-made |
In which geographical area is most profit made?
Answer:
America (about 50% of the total)
See Page 18 of pre-seen material |
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| 2017-06-21 11:10:35 | What’s a cobot? | whats-a-cobot |
What’s a cobot?
Answer:
A collaborative robot that interacts and cooperates with humans and other robots
See Page 19 of pre-seen material |
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| 2017-06-21 11:10:58 | What are the three stages in the environmental life cycle of a car? | three-stages-environmental-life-cycle-car |
What are the three stages in the environmental life cycle of a car?
Answer:
• Manufacture
• Usage
• Disposal
See Page 20 of pre-seen material |
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| 2017-06-21 11:11:19 | For how long will a design choice made today affect the environment? | long-will-design-choice-made-today-affect-environment |
For how long will a design choice made today affect the environment?
Answer:
25 years
See Page 20 of pre-seen material |
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| 2017-06-21 11:12:06 | Currently, roughly what proportion of steel is not recovered and recycled? | 393682 |
Currently, roughly what proportion of steel is not recovered and recycled?
Answer:
26%
See Page 21 of pre-seen material |
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| 2017-06-21 11:14:08 | What are three alternatives to the use of conventional petrol and diesel as fuel for cars? | three-alternatives-use-conventional-petrol-diesel-fuel-cars |
What are three alternatives to the use of conventional petrol and diesel as fuel for cars?
Answer:
• Compressed natural gas
• Liquid petroleum gas
• Biodiesel
• Batteries
See Page 22 of pre-seen material |
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| 2017-06-21 11:14:26 | Is it easy or difficult to work out the cost of production of a car? | easy-difficult-work-cost-production-car |
Is it easy or difficult to work out the cost of production of a car?
Answer:
Difficult
See Page 23 of pre-seen material |
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| 2017-06-21 11:14:45 | In which two ways do cobots detect people? | two-ways-cobots-detect-people |
In which two ways do cobots detect people?
Answer:
• Operators are required to wear RFIDs
• Infrared detection
See Page 24 of pre-seen material |
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| 2017-06-21 11:15:03 | Is diesel currently regarded favourably as a fuel of the future? | diesel-currently-regarded-favourably-fuel-future |
Is diesel currently regarded favourably as a fuel of the future?
Answer:
No
See Page 25 of pre-seen material |
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| 2017-06-21 11:15:39 | What technologies are affecting car paint? | technologies-affecting-car-paint |
What technologies are affecting car paint?
Answer:
• Customised colours through colour scanning. This enables a premium price to be charged.
• Water-based paint.
See Page 26 of pre-seen material |
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| 2017-06-21 11:16:00 | Why might dealers prefer you to buy a used car rather than a new car? | might-dealers-prefer-buy-used-car-rather-new-car |
Why might dealers prefer you to buy a used car rather than a new car?
Answer:
Cash-flow
See Page 26 of pre-seen material |
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| 2017-06-21 11:16:30 | What issue has caused workers to threaten strike action? | issue-caused-workers-threaten-strike-action |
What issue has caused workers to threaten strike action?
Answer:
Disciplinary action for refusal to wear masks, breathing apparatus and special suits.
See Page 27 of pre-seen material |
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| 2017-06-21 12:24:44 | What is your position in this case study? | position-case-study |
What is your position in this case study?
Answer:
Senior manager, finance function
See Page 2 of pre-seen material |
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| 2017-06-21 12:25:10 | What are the two streams of revenue? | two-streams-revenue |
What are the two streams of revenue?
Answer:
• Licensing systems to vehicle manufacturers.
• Selling equipment to manufacturers
See Page 3 of pre-seen material |
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| 2017-06-21 12:25:27 | Does the company have its own factories? | does-the-company-have-its-own-factories |
Does the company have its own factories?
Answer:
No. It uses sub-contractors
See Page 3 of pre-seen material |
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| 2017-06-21 12:25:44 | What two advantages does sub-contracting give the company? | two-advantages-sub-contracting-give-company |
What two advantages does sub-contracting give the company?
Answer:
• Technical confidentiality
• Quality control
See Page 3 of pre-seen material |
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| 2017-06-21 12:26:03 | Approximately what shareholdings do the three founders have? | approximately-shareholdings-three-founders |
Approximately what shareholdings do the three founders have?
Answer:
Around 10% each (10, 8, 7)
See Page 3 of pre-seen material |
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| 2017-06-21 12:26:19 | What are the company’s four current products? | companys-four-current-products | What are the company’s four current products?
Answer:
Smartnav, TruckGuard, CruiseMaster, ParkSpace
See Page 4, 5 of pre-seen material |
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| 2017-06-21 12:26:37 | What are the two products in development, or in longer term plans? | two-products-development-longer-term-plans |
What are the two products in development, or in longer term plans?
Answer:
• Driverless vehicles,
• Autonomous vehicles
See Page 6 of pre-seen material |
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| 2017-06-21 12:26:59 | What is the company’s mission? | what-is-the-companys-mission-2 | What is the company’s mission?
Answer:
Making vehicles drive themselves
See Page 7 of pre-seen material |
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| 2017-06-21 12:27:16 | In what does the company want to be business leader? | company-want-business-leader |
In what does the company want to be business leader?
Answer:
Industry leader in each product range and in innovation and product development
See Page 7 of pre-seen material |
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| 2017-06-21 12:27:38 | Which two companies are AutoAuto’s most immediate competitors? | 393704 |
Which two companies are AutoAuto’s most immediate competitors?
Answer:
• Gretton Electronics
• Primnav
See Page 7 of pre-seen material |
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| 2017-06-21 12:28:29 | How do the two main competitors technical ability compare to AutoAuto’s? | two-main-competitors-technical-ability-compare-autoautos |
How do the two main competitors technical ability compare to AutoAuto’s?
Answer:
Both less advanced
See Page 8 of pre-seen material |
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| 2017-06-21 12:31:12 | Are AutoAuto’s products sold to individual motorists? | autoautos-products-sold-individual-motorists |
Are AutoAuto’s products sold to individual motorists?
Answer:
No
See Page 9 of pre-seen material |
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| 2017-06-21 12:31:32 | Which company is working on a driverless vehicle and what is the big drawback of their system? | company-working-driverless-vehicle-big-drawback-system |
Which company is working on a driverless vehicle and what is the big drawback of their system?
Answer:
Robocar. Cannot detect pedestrians
See Page 9 of pre-seen material |
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| 2017-06-21 12:31:55 | Approximately how many engineers does AutoAuto employ? | approximately-many-engineers-autoauto-employ |
Approximately how many engineers does AutoAuto employ?
Answer:
250
See Page 10 of pre-seen material |
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| 2017-06-21 12:32:13 | What is the name of the CAD package? | name-cad-package |
What is the name of the CAD package?
Answer:
Spinweev
See Page 10 of pre-seen material |
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| 2017-06-21 12:32:28 | How many executive and non-executive directors does the company have (apart from the chairman)? | many-executive-non-executive-directors-company-apart-chairman |
How many executive and non-executive directors does the company have (apart from the chairman)?
Answer:
6 executive; 2 NEDS
See Page 11 of pre-seen material |
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| 2017-06-21 12:33:08 | Have sales and profits risen or fallen from 2016 to 2017? | sales-profits-risen-fallen-2016-2017 |
Have sales and profits risen or fallen from 2016 to 2017?
Answer:
Both fallen
See Page 13 of pre-seen material |
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| 2017-06-21 12:33:24 | Has gross profit risen or fallen between 2016 and 2017 | gross-profit-risen-fallen-2016-2017 |
Has gross profit risen or fallen between 2016 and 2017
Answer:
Fallen (60% to 57%)
See Page 13 of pre-seen material |
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| 2017-06-21 12:33:41 | Is interest cover low or high? | interest-cover-low-high |
Is interest cover low or high?
Answer:
High. >11 in 2017
See Page 14 of pre-seen material |
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| 2017-06-21 12:34:25 | Have long term loans increased or decreased from 2016 to 2017? | long-term-loans-increased-decreased-2016-2017 |
Have long term loans increased or decreased from 2016 to 2017?
Answer:
Fallen from 1,000m to 800m
See Page 14 of pre-seen material |
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| 2017-06-21 12:34:42 | Have Primnav’s results improved or deteriorated between 2016 and 2017? | primnavs-results-improved-deteriorated-2016-2017 |
Have Primnav’s results improved or deteriorated between 2016 and 2017?
Answer:
Improved
See Page 15 of pre-seen material |
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| 2017-06-21 12:35:09 | What are the five risk areas set out in AutoAuto’s risk report? | five-risk-areas-set-autoautos-risk-report |
What are the five risk areas set out in AutoAuto’s risk report?
Answer:
• Competition
• Investment in new innovations
• New technologies
• Legal liability
• Software issues
See Page 17 of pre-seen material |
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| 2017-06-21 12:35:29 | What are the five stakeholder groups referred to in the company’s CSR report? | five-stakeholder-groups-referred-companys-csr-report |
What are the five stakeholder groups referred to in the company’s CSR report?
Answer:
• Shareholders
• Employees
• Employees in the supply chain
• The environment
See Page 18 of pre-seen material |
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| 2017-06-21 12:35:48 | How are the employees in the supply chain looked after by the company? | employees-supply-chain-looked-company |
How are the employees in the supply chain looked after by the company?
Answer:
AutoAuto conducts regular audits of supplier factories
See Page 18 of pre-seen material |
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| 2017-06-21 12:44:29 | Over the last three years, roughly what has happened | last-three-years-roughly-happened |
Over the last three years, roughly what has happened to the company’s share price?
Answer:
It has stayed fairly stable 100 - 110
See Page 19 of pre-seen material |
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| 2017-06-21 12:44:45 | What is the most expensive element of the SmartNav? | expensive-element-smartnav |
What is the most expensive element of the SmartNav?
Answer:
The Touchscreen
See Page 20 of pre-seen material |
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| 2017-06-21 12:45:02 | About what % of revenue does the company spend on R&D? | revenue-company-spend-rd |
About what % of revenue does the company spend on R&D?
Answer:
About 8% (44/542.9)
See Page 21 of pre-seen material |
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| 2017-06-21 12:45:18 | With whom has Robocar recently signed major contract and for what type of system? | robocar-recently-signed-major-contract-type-system |
With whom has Robocar recently signed major contract and for what type of system?
Answer:
United Minerals. Autonomous trucks in an iron-ore mine
See Page 22 of pre-seen material |
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| 2017-06-21 12:45:41 | Has the company been given permission to run tests on motorways for driverless vehicles or autonomous vehicles? | company-given-permission-run-tests-motorways-driverless-vehicles-autonomous-vehicles |
Has the company been given permission to run tests on motorways for driverless vehicles or autonomous vehicles?
Answer:
Driverless vehicles
See Page 23 of pre-seen material |
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| 2017-06-21 12:46:03 | What PESTEL factor might complicate the introduction of driverless vehicles? | pestel-factor-might-complicate-introduction-driverless-vehicles |
What PESTEL factor might complicate the introduction of driverless vehicles?
Answer:
Legal complications related to liability in case of accidents
See Page 24 of pre-seen material |
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| 2017-09-21 16:35:52 | What country does Struan’s Ice cream operate in and what is the national currency? | country-struans-ice-cream-operate-national-currency |
What country does Struan’s Ice cream operate in and what is the national currency?
Answer:
Newland
Newland dollar (N$)
??See Page 2 of pre-seen material |
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| 2017-09-21 16:37:00 | What did the company sell before they specialised in ice cream retail? | company-sell-specialised-ice-cream-retail |
What did the company sell before they specialised in ice cream retail?
Answer:
They were dairy farmers and sold milk.
??See Page 2 of pre-seen material |
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| 2017-09-21 16:37:21 | Are Struan’s a premium or budget brand? | struans-premium-budget-brand |
Are Struan’s a premium or budget brand?
Answer:
Premium
??See Page 3 of pre-seen material |
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| 2017-09-21 16:37:47 | How many million litres ice cream does the company make per year? | many-million-litres-ice-cream-company-make-per-year |
How many million litres ice cream does the company make per year?
Answer:
11 million litres
??See Page 3 of pre-seen material |
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| 2017-09-21 16:42:14 | What is the most popular flavour of dairy ice cream | popular-flavour-dairy-ice-cream |
What is the most popular flavour of dairy ice cream
Answer:
vanilla
??See Page 5 of pre-seen material |
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| 2017-09-21 16:42:32 | What relation is the MD to the other senior management team? | relation-md-senior-management-team |
What relation is the MD to the other senior management team?
Answer:
He is their brother (they are all siblings)
??See Page 5 of pre-seen material |
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| 2017-09-21 16:42:50 | What percentage of dairy fat do most premium ice cream have? | percentage-dairy-fat-premium-ice-cream |
What percentage of dairy fat do most premium ice cream have?
Answer:
10% to 16%
??See Page 6 of pre-seen material |
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| 2017-09-21 16:43:09 | What is overrun? What percentage of overrun does Struan’s ice-cream have? | overrun-percentage-overrun-struans-ice-cream |
What is overrun? What percentage of overrun does Struan’s ice-cream have?
Answer:
The % increase in output volume of ice cream in comparison to input. It is caused by pushing air into the mixture. Struan’s ice-cream has 20% overrun
??See Page 7 of pre-seen material |
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| 2017-09-21 16:43:26 | Who is Enid Chang? | who-is-enid-chang |
Who is Enid Chang?
Answer:
Enid Chang is the Senior Finance Officer (your line manager).
??See Page 8 of pre-seen material |
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| 2017-09-21 16:43:42 | Give an example how Struan supports the environment in their operations and production choices. | give-example-struan-supports-environment-operations-production-choices |
Give an example how Struan supports the environment in their operations and production choices.
Answer:
They use solar power and wind energy and have an aim to be self-sufficient in renewable energy.
??See Page 8 of pre-seen material |
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| 2017-09-21 16:43:58 | How have major supermarkets added downward pressure on Struan’s profit margins. | major-supermarkets-added-downward-pressure-struans-profit-margins |
How have major supermarkets added downward pressure on Struan’s profit margins.
Answer:
Supermarkets are constantly renegotiate prices with Struan which puts pressure on margins.
??See Page 11 of pre-seen material |
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| 2017-09-21 16:44:15 | What is Struan’s Ice Cream Club | struans-ice-cream-club |
What is Struan’s Ice Cream Club
Answer:
This is a loyalty scheme for Struan’s customers who want to enter competitions & obtain recipes & updates
??See Page 12 of pre-seen material |
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| 2017-09-21 16:44:32 | Can Ice cream be purchased on Struan’s website | can-ice-cream-purchased-struans-website |
Can Ice cream be purchased on Struan’s website
Answer:
No – there are no direct sales of ice-cream via the internet.
??See Page 14 of pre-seen material |
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| 2017-09-21 16:44:56 | Who is the head of finance? | who-is-the-head-of-finance |
Who is the head of finance?
Answer:
James Struan
??See Page 14 of pre-seen material |
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| 2017-09-21 16:45:36 | Does the company have a separate HR department? | company-separate-hr-department |
Does the company have a separate HR department?
Who deals with most HR queries?
Answer:
No – there is no separate HR function. This is under James Struan remit with assistant Rosie dealing with most queries.
??See Page 15 of pre-seen material |
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| 2017-09-21 16:46:02 | What % overall market share does the main multi-national competitor dominate? | overall-market-share-main-multi-national-competitor-dominate |
What % overall market share does the main multi-national competitor dominate?
Answer:
32% of overall ice cream market
??See Page 16 of pre-seen material |
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| 2017-09-21 16:46:23 | How has the concern over childhood obesity affected the company? | concern-childhood-obesity-affected-company |
How has the concern over childhood obesity affected the company?
Answer:
It has reduced ice cream sales –particularly of family packs
??See Page 17 of pre-seen material |
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| 2017-09-21 16:46:47 | Which ice-cream sales category is experiencing a growth trend of 2%? | ice-cream-sales-category-experiencing-growth-trend-2 |
Which ice-cream sales category is experiencing a growth trend of 2%?
Answer:
Unpackaged dairy ice-cream has a growth rate of 2%.
??See Page 18 of pre-seen material |
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| 2017-09-21 16:47:03 | What have most producers done to reduce overall calories per pack? | producers-done-reduce-overall-calories-per-pack |
What have most producers done to reduce overall calories per pack?
Answer:
Packs have been made smaller to reduce calories per pack (rather than changing ingredients)
??See Page 20 of pre-seen material |
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| 2017-09-21 16:47:21 | Name one opportunity from Struan’s SWOT analysis | name-one-opportunity-struans-swot-analysis |
Name one opportunity from Struan’s SWOT analysis
Answer:
Low fat/ low sugar lines
Overseas market
Individual portion sales
Impulse buying opportunities
??See Page 22 of pre-seen material |
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| 2017-09-21 16:47:43 | What is the purpose of pasteurisation? | what-is-the-purpose-of-pasteurisation |
What is the purpose of pasteurisation?
Answer:
This is process of heating the mix to kill harmful bacteria.
??See Page 23 of pre-seen material |
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| 2017-09-21 16:48:19 | What does the Variegator do? | what-does-the-variegator-do |
What does the Variegator do?
Answer:
Adds swirls to the ice-cream as part of production process.
??See Page 3 of pre-seen material |
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| 2017-09-21 16:48:43 | Has Struan’s cash position become better or worse between 2015 and 2016? | struans-cash-position-become-better-worse-2015-2016 |
Has Struan’s cash position become better or worse between 2015 and 2016?
Answer:
Cash balance has got better – cash held has doubled between 2015 and 2016 statements.
??See Page 4 of pre-seen material |
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| 2017-09-21 16:49:05 | Which category of loans has increased most for Struan (short or long term) | category-loans-increased-struan-short-long-term |
Which category of loans has increased most for Struan (short or long term)
Answer:
Short term borrowing has gone from zero in 2015 to 2.82 million in 2016
|
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| 2017-09-21 16:49:20 | What does the note to profit & loss account state relating to inventory balance? | note-profit-loss-account-state-relating-inventory-balance |
What does the note to profit & loss account state relating to inventory balance?
Answer:
It tells us that inventory value - includes cattle and crops.
|
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| 2017-09-21 16:49:38 | What was the gross profit margin for 2016 accounts? | gross-profit-margin-2016-accounts | What was the gross profit margin for 2016 accounts? Answer: 40% GP margin (8424m / 20871m) | ||||||||||||||||||||||||||||||||||||||||||
| 2017-09-21 16:50:00 | Which of the ice-cream product sizes have a gross profit margin budgeted below 50%? | ice-cream-product-sizes-gross-profit-margin-budgeted-50 |
Which of the ice-cream product sizes have a gross profit margin budgeted below 50%?
Answer:
Only the 2 litre size packs have a budgeted gross profit margin that is less than 50%.
??See Page 5 of pre-seen material |
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| 2017-09-21 16:50:22 | What is the value of total budgeted sales for 2017 ( to nearest million) | value-total-budgeted-sales-2017-nearest-million |
What is the value of total budgeted sales for 2017 ( to nearest million)?
Answer:
Budgeted sales are 22million ($21,983,325)
??See Page 9 of pre-seen material |
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| 2017-09-21 16:50:46 | What is the corporate tax rate? | corporate-tax-rate |
What is the corporate tax rate?
Answer:
20%
??See Page 9 of pre-seen material |
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| 2017-09-21 16:51:12 | What is the name of the industry trade magazine which features an quote from Hannah Struan? | name-industry-trade-magazine-features-quote-hannah-struan |
What is the name of the industry trade magazine which features an quote from Hannah Struan?
Answer:
National Grocery Weekly,
See Page 10 of pre-seen material |
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| 2017-09-28 17:53:22 | What is your role/position in this case? | what-is-your-roleposition-in-this-case-2 |
What is your role/position in this case?
Answer:
Financial Manager
See Page 2 of pre-seen material |
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| 2017-09-28 17:53:45 | About how many people does the company employ? | about-how-many-people-does-the-company-employ |
About how many people does the company employ?
Answer:
>150
??See Page 2 of pre-seen material |
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| 2017-09-28 17:54:55 | What is the company’s mission? | what-is-the-companys-mission-3 |
What is the company’s mission?
Answer:
We are committed to offering the very best office furniture design and excellence in customer service…+ four core competencies
??See Page 3 of pre-seen material |
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| 2017-09-28 17:55:11 | What are the company’s three activities? | companys-three-activities |
What are the company’s three activities?
Answer:
• Design
• Manufacturing
• Installation
See Page 5 of pre-seen material |
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| 2017-09-28 17:55:28 | What products are in the company’s portfolio? | products-companys-portfolio |
What products are in the company’s portfolio?
Answer:
• Desking systems
• Seating
• Tables
• Storage
• Pods/booths
• Screens
See Page 6,7 of pre-seen material |
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| 2017-09-28 17:55:46 | What are the design and manufacturing steps? | design-manufacturing-steps |
What are the design and manufacturing steps?
Answer:
See case study, Page 8
See Page 8 of pre-seen material |
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| 2017-09-28 17:56:04 | What are the delivery and installation steps | delivery-installation-steps |
What are the delivery and installation steps
Answer:
See case study, Page 8
See Page 8 of pre-seen material |
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| 2017-09-28 17:59:45 | What are ISO14001 and ISO 9001? | iso14001-iso-9001 |
What are ISO14001 and ISO 9001?
Answer:
ISO14001: Environmental Management System
ISO9001: Quality Management System
??See Page 9 of pre-seen material |
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| 2017-09-28 18:01:11 | What are the key areas on which ZX focuses in its environmental management activities? | key-areas-zx-focuses-environmental-management-activities |
What are the key areas on which ZX focuses in its environmental management activities?
Answer:
• Energy efficiency
• Minimisation of waste and pollution
• Reduction in transportation fuel
• Raw material bought from environmentally friendly sources
• Minimising material consumption
See Page 9 of pre-seen material |
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| 2017-09-28 18:01:53 | What are the company’s health and safety objectives? | companys-health-safety-objectives |
What are the company’s health and safety objectives?
Answer:
To minimise the number of instances of workplace accidents and illnesses
??See Page 9 of pre-seen material |
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| 2017-09-28 18:03:24 | Who is responsible for health and safety | responsible-health-safety |
Who is responsible for health and safety
Answer:
The company and each employee must take reasonable care of their own and other people’s welfare
See Page 9 of pre-seen material |
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| 2017-09-28 18:03:43 | How does the company improve its customer-related operations? | company-improve-customer-related-operations |
How does the company improve its customer-related operations?
Answer:
Regular forums with main customers
See Page 10 of pre-seen material |
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| 2017-09-28 18:04:29 | What is the chain of custody for timber suppliers and what is its purpose? | chain-custody-timber-suppliers-purpose |
What is the chain of custody for timber suppliers and what is its purpose?
Answer:
The unbroken path from forest to consumer. Certification allows proof that wood comes from well-managed sources
See Page 10 of pre-seen material |
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| 2017-09-28 18:05:27 | What share does ZX have of the office furniture market? | what-share-does-zx-have-of-the-office-furniture-market |
What share does ZX have of the office furniture market?
Answer:
20%
See Page 11 of pre-seen material |
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| 2017-09-28 18:06:00 | What are ZX’s two main rivals? | zxs-two-main-rivals |
What are ZX’s two main rivals?
Answer:
RiPlan (22%) and ARM (17%)
See Page 11 of pre-seen material |
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| 2017-09-28 18:06:20 | What are the three furniture sub-sectors | three-furniture-sub-sectors |
What are the three furniture sub-sectors
Answer:
Domestic (41%)
Office (29%)
Contract (30%)
See Page 14 of pre-seen material |
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| 2017-09-28 18:07:56 | What is contract furniture? | what-is-contract-furniture |
What is contract furniture?
Answer:
For public areas: schools, hospitals, restaurants etc.
See Page 14 of pre-seen material |
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| 2017-09-28 18:08:15 | Having suffered a decline in the market over the past few years | suffered-decline-market-past-years |
Having suffered a decline in the market over the past few years, what is the expected growth in the office furniture market from 2017 onwards?
Answer:
3 – 4%
See Page 15 of pre-seen material |
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| 2017-09-28 18:08:32 | What are the main reasons why profits are low in the office furniture market? | main-reasons-profits-low-office-furniture-market |
What are the main reasons why profits are low in the office furniture market?
Answer:
• High competition
• Over-capacity
• Cheap imposts
See Page 15 of pre-seen material |
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| 2017-09-28 18:09:09 | What percentage of the office furniture marker is supplied by imports? | percentage-office-furniture-marker-supplied-imports |
What percentage of the office furniture marker is supplied by imports?
Answer:
38%
See Page 16 of pre-seen material |
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| 2017-09-28 18:09:28 | Both ZX and its main rival RiPlan can make standard, high volume | zx-main-rival-riplan-can-make-standard-high-volume |
Both ZX and its main rival RiPlan can make standard, high volume, low quality furniture. Which has the ability to also produce bespoke solutions?
Answer:
ZX
See Page 16 of pre-seen material |
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| 2017-09-28 18:10:01 | What is the relevant trade association | relevant-trade-association |
What is the relevant trade association
Answer:
Kordia Furniture Association
See Page 17 of pre-seen material |
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| 2017-09-28 18:10:15 | By approximately what % has ZXs operating profits changed from 2015 to 2016? | approximately-zxs-operating-profits-changed-2015-2016 |
By approximately what % has ZXs operating profits changed from 2015 to 2016?
Answer:
About an 11% decrease
See Page 18 of pre-seen material |
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| 2017-09-28 18:10:29 | Does the company have long term borrowings? | company-long-term-borrowings |
Does the company have long term borrowings?
Answer:
No
See Page 19 of pre-seen material |
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| 2017-09-28 18:10:44 | Does the 2016 SOFP imply liquidity problems? | 2016-sofp-imply-liquidity-problems |
Does the 2016 SOFP imply liquidity problems?
Answer:
No. 2016 current ratio = 2.4
See Page 19 of pre-seen material |
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| 2017-09-28 18:11:39 | Has the working capital cycle length increased or decreased from 2016 to 2017? | working-capital-cycle-length-increased-decreased-2016-2017 |
Has the working capital cycle length increased or decreased from 2016 to 2017?
Answer:
Substantial increase: 34.2 to 43.7 days
See Page 21 of pre-seen material |
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| 2017-09-28 18:12:12 | In 2017, is the company doing better or worse than budget? | 2017-company-better-worse-budget |
In 2017, is the company doing better or worse than budget?
Answer:
Both sales and gross margin are below budget
See Page 21 of pre-seen material |
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| 2017-09-28 18:12:32 | How has RiPlan’s profits (ZX’s main rival) changed from 2015 to 2016? | riplans-profits-zxs-main-rival-changed-2015-2016 |
How has RiPlan’s profits (ZX’s main rival) changed from 2015 to 2016?
Answer:
Dramatic decline. Operating profit fell from K$ 12M to 1.5M
See Page 23 of pre-seen material |
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| 2017-09-28 18:12:49 | What was the nature of the ARM corruption crisis? | nature-arm-corruption-crisis |
What was the nature of the ARM corruption crisis?
Answer:
Bribery by suppliers to win contracts. Poor internal control was blamed but directors are still under a shadow
See Page 24 of pre-seen material |
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| 2017-09-28 18:13:06 | Why have three of the country’s manufacturers closed recently? | three-countrys-manufacturers-closed-recently |
Why have three of the country’s manufacturers closed recently?
Answer:
To move overseas to obtain lower manufacturing costs.
See Page 25 of pre-seen material |
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| 2017-09-28 18:13:25 | What innovation has RiPlan recently announced | innovation-riplan-recently-announced |
What innovation has RiPlan recently announced
Answer:
A large showroom in the capital
See Page 26 of pre-seen material |
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| 2017-10-02 22:49:41 | What is your role/position in this case? | what-is-your-roleposition-in-this-case-3 |
What is your role/position in this case?
Answer:
Senior manager in the finance function.
See Page 2 of pre-seen material |
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| 2017-10-02 22:50:22 | What is the business of Steelcast? | what-is-the-business-of-steelcast |
What is the business of Steelcast?
Answer:
Luxury mechanical watches
See Page 3 of pre-seen material |
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| 2017-10-02 22:50:36 | What is the price range (H$)? | price-range-h |
What is the price range (H$)?
Answer:
2,500 – 26,500
See Page 3 of pre-seen material |
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| 2017-10-02 22:50:52 | Is the company listed? | is-the-company-listed |
Is the company listed?
Answer:
Yes
See Page 3 of pre-seen material |
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| 2017-10-02 22:51:05 | Does the company sub-contract the manufacturing of any of the 350 components of a watch? | company-sub-contract-manufacturing-350-components-watch |
Does the company sub-contract the manufacturing of any of the 350 components of a watch?
Answer:
No
See Page 4 of pre-seen material |
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| 2017-10-02 22:51:21 | Are sales made directly to consumers? | sales-made-directly-consumers |
Are sales made directly to consumers?
Answer:
No. All via selected retailers
See Page 5 of pre-seen material |
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| 2017-10-02 22:51:54 | Where are repairs and servicing carried out? | repairs-servicing-carried |
Where are repairs and servicing carried out?
Answer:
Watches are returned to the Steelcast factory for servicing
See Page 8 of pre-seen material |
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| 2017-10-02 22:52:09 | What is the company’s mission statement? | companys-mission-statement |
What is the company’s mission statement?
Answer:
We make watches for leaders who wear them with pride
See Page 6 of pre-seen material |
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| 2017-10-02 22:52:25 | Does the chairman think that the company competes with other luxury watchmakers? | chairman-think-company-competes-luxury-watchmakers |
Does the chairman think that the company competes with other luxury watchmakers?
Answer:
No. Competition is believed to be against other luxury goods
See Page 7 of pre-seen material |
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| 2017-10-02 22:52:39 | What are the two innovations in watch technology that have occurred since Steel cast was founded? | two-innovations-watch-technology-occurred-since-steel-cast-founded |
What are the two innovations in watch technology that have occurred since Steel cast was founded?
Answer:
Quartz watches and smart watches
See Page 7 of pre-seen material |
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| 2017-10-02 22:52:53 | What pursuits does Steelcast try to associate with the brand? | pursuits-steelcast-try-associate-brand |
What pursuits does Steelcast try to associate with the brand?
Answer:
Action, adventure, sport, military.
See Page 9 of pre-seen material |
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| 2017-10-02 22:53:16 | How many different models does the company sell? | many-different-models-company-sell |
How many different models does the company sell?
Answer:
Seven
See Page 9 of pre-seen material |
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| 2017-10-02 22:54:55 | Is there a balance of executive and non-executive directors? | balance-executive-non-executive-directors |
Is there a balance of executive and non-executive directors?
Answer:
Yes. Four of each
See Page 10 of pre-seen material |
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| 2017-10-02 22:55:14 | Do the remuneration committee, nomination committee and audit committee seem to be properly constituted? | remuneration-committee-nomination-committee-audit-committee-seem-properly-constituted |
Do the remuneration committee, nomination committee and audit committee seem to be properly constituted?
Answer:
Yes
See Page 11 of pre-seen material |
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| 2017-10-02 22:55:32 | Has the company’s trading position improved or worsened between 2016 and 2017? | companys-trading-position-improved-worsened-2016-2017 |
Has the company’s trading position improved or worsened between 2016 and 2017?
Answer:
Revenue, profits and GP% have all improved
See Page 12 of pre-seen material |
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| 2017-10-02 22:55:47 | Does the company have liquidity problems? | company-liquidity-problems |
Does the company have liquidity problems?
Answer:
No. Current ratio 2017 = 3.8
See Page 13 of pre-seen material |
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| 2017-10-02 22:56:04 | Which company has the better GP% in 2017: Steelcast or its competitor, Laine? | company-better-gp-2017-steelcast-competitor-laine |
Which company has the better GP% in 2017: Steelcast or its competitor, Laine?
Answer:
Steelcast GP% = 56.5%
Laine GP% = 53.9%
See Page 12/14 of pre-seen material |
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| 2017-10-02 22:56:27 | What are the five risks identified by Steelcast in its risk report? | five-risks-identified-steelcast-risk-report |
What are the five risks identified by Steelcast in its risk report?
Answer:
• Copying of its designs
• Forgeries
• Retention of skilled employees
• Changing technology
• Currency risks
See Page 16 of pre-seen material |
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| 2017-10-02 22:56:51 | What are the five headings in Steelcast’s Corporate Social Responsibility Report? | five-headings-steelcasts-corporate-social-responsibility-report |
What are the five headings in Steelcast’s Corporate Social Responsibility Report?
Answer:
• Health and safety
• Sourcing policy
• Energy consumption
• Employment
• External engagement
See Page 17 of pre-seen material |
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| 2017-10-02 22:57:09 | Compared to about four years ago, is Steelcast’s current share price higher or lower? | compared-four-years-ago-steelcasts-current-share-price-higher-lower |
Compared to about four years ago, is Steelcast’s current share price higher or lower?
Answer:
Lower by about a third
See Page 18 of pre-seen material |
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| 2017-10-02 22:57:27 | Has it become more or less common to give expensive watches as business gifts? | become-less-common-give-expensive-watches-business-gifts |
Has it become more or less common to give expensive watches as business gifts?
Answer:
Less common: difficult economic times and concerns about corruption.
See Page 19 of pre-seen material |
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| 2017-10-02 22:57:46 | What’s the trend in smart watches mentioned in the Hiland Business Times? | whats-trend-smart-watches-mentioned-hiland-business-times |
What’s the trend in smart watches mentioned in the Hiland Business Times?
Answer:
They are becoming better looking.
See Page 20 of pre-seen material |
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| 2017-10-02 22:58:11 | What sport does Steelcast sponsor? | sport-steelcast-sponsor |
What sport does Steelcast sponsor?
Answer:
Polo
See Page 7, 9, 21 of pre-seen material |
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| 2017-10-02 22:58:27 | What are the names of two high-end competitors of Steelcast? | names-two-high-end-competitors-steelcast |
What are the names of two high-end competitors of Steelcast?
Answer:
Laine; Balarra
See Page 7 of pre-seen material |
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| 2017-10-02 22:58:45 | What limits the size of the luxury watch market? | limits-size-luxury-watch-market |
What limits the size of the luxury watch market?
Answer:
The number of consumers who can afford very expensive watches.
See Page 8 of pre-seen material |
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| 2017-10-02 22:59:11 | What is brand extension? | what-is-brand-extension |
What is brand extension?
Answer:
It is a used by companies to launch a new product by using an existing brand name on a new product in a different category. The company hopes to leverage its existing customer base and brand loyalty to increase its profits with a new product offering.
See Page 8 (plus some additional information). of pre-seen material |
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| 2017-10-02 22:59:40 | Do Steelcast’s watches have a ‘rugged’ feel or are they more refined? | steelcasts-watches-rugged-feel-refined |
Do Steelcast’s watches have a ‘rugged’ feel or are they more refined?
Answer:
Rugged
See Page 9 of pre-seen material |
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| 2017-10-02 23:00:04 | Which of Steelcast or Laine is more highly geared? | steelcast-laine-highly-geared |
Which of Steelcast or Laine is more highly geared?
Answer:
Steelcast D/E = 34%
Laine D/E = 17%
See Page 12, 14 of pre-seen material |
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| 2017-10-02 23:00:57 | Has Steelcast got safe interest cover? | steelcast-got-safe-interest-cover |
Has Steelcast got safe interest cover?
Answer:
Yes: 836/138 = 6
See Page 12 of pre-seen material |
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| 2017-10-02 23:01:24 | Are most of Steelcast’s sales in its own currency (H$) or in foreign currencies? | steelcasts-sales-currency-h-foreign-currencies |
Are most of Steelcast’s sales in its own currency (H$) or in foreign currencies?
Answer:
Most are in foreign currencies
See Page 16 of pre-seen material |
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| 2018-09-12 22:16:46 | What are the five elements of an assurance engagement? | five-elements-assurance-engagement |
What are the five elements of an assurance engagement?
Answer:
(1) A three-party relationship:
– practitioner
– responsible party
– intended users
(2) Appropriate subject matter
(3) Suitable criteria
(4) Sufficient appropriate evidence
(5) A written assurance report
See chapter 1 |
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| 2018-09-12 22:19:17 | What is professional scepticism? | what-is-professional-scepticism |
What is professional scepticism?
Answer:
Professional scepticism is an attitude that means that the practitioner questions and critically assesses the validity and reliability of evidence.
See chapter 1 |
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| 2018-09-12 22:21:21 | An assurance report concludes ‘Based on our work described in this report | assurance-report-concludes-based-work-described-report |
An assurance report concludes ‘Based on our work described in this report, nothing has come to our attention that causes us to believe that internal control is not effective, in all material respects, based on … [criteria].’
What term describes this engagement and what term describes the conclusion expressed?
Answer:
It is a ‘limited assurance’ engagement and the conclusion is expressed in ‘negative’ form.
See chapter 1 |
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| 2018-09-12 22:23:20 | What five areas are covered by the main principles of corporate governance according to best practice? | five-areas-covered-main-principles-corporate-governance-according-best-practice |
What five areas are covered by the main principles of corporate governance according to best practice?
Answer:
See chapter 2 |
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| 2018-09-12 22:25:09 | What is meant by a ‘comply or explain’ approach to corporate governance? | meant-comply-explain-approach-corporate-governance |
What is meant by a ‘comply or explain’ approach to corporate governance?
Answer:
A regulatory authority (e.g. Stock Exchange) requires listed companies to:
– state that they have complied with corporate governance principles (e.g. under the UK Corporate Governance Code); or
– disclose and explain any non-compliance.
See chapter 2 |
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| 2018-09-13 07:50:28 | What does the principle of ‘accountability’ mean? | principle-accountability-mean |
What does the principle of ‘accountability’ mean?
Answer:
The board should:
– present a fair, balanced and understandable assessment of the company’s position and prospects
– maintain sound risk management and internal control systems
– establish formal and transparent arrangements for applying corporate reporting, risk management and internal control principles and for maintaining an appropriate relationship with the company’s auditors.
See chapter 2 |
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| 2018-09-13 07:55:08 | What is the fundamental principle of ‘professional behaviour’? | fundamental-principle-professional-behaviour |
What is the fundamental principle of ‘professional behaviour’?
Answer:
Professional behaviour’ means that the professional accountant:
– must how professional courtesy and consideration at all times
– should not bring the profession into disrepute
– should be honest and truthful (e.g. not make exaggerated claims or disparaging references to the work of others).
See chapter 3 |
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| 2018-09-13 07:55:31 | What information would usually be included in a tender for an audit? | information-usually-included-tender-audit |
What information would usually be included in a tender for an audit?
Answer:
Background information about the audit firm.
Relevant expertise and specialisms of the firm and individuals proposed for the audit team.
Scope of work proposed.
An outline of the audit approach including audit methodology, possible use of internal audit/CAATs etc.
Basis of fees.
See chapter 3 |
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| 2018-09-13 07:55:46 | Why should an audit firm approached by a new prospective audit client communicate with the existing auditor? | audit-firm-approached-new-prospective-audit-client-communicate-existing-auditor |
Why should an audit firm approached by a new prospective audit client communicate with the existing auditor?
Answer:
To request information that is relevant to deciding whether there is any professional reason why they should not accept appointment.
See chapter 3 |
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| 2018-09-13 07:56:07 | What are the fundamental principles of ACCA’s ‘Code of Ethics and Conduct’? | fundamental-principles-accas-code-ethics-conduct |
What are the fundamental principles of ACCA’s ‘Code of Ethics and Conduct’?
Answer:
See chapter 4 |
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| 2018-09-13 07:56:22 | What are the categories of threats to compliance with the fundamental principles of professional ethics? | categories-threats-compliance-fundamental-principles-professional-ethics |
What are the categories of threats to compliance with the fundamental principles of professional ethics?
Answer:
See chapter 4 |
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| 2018-09-13 07:58:28 | What is ‘independence’? | what-is-independence |
What is ‘independence’?
Answer:
Independence comprises:
– Independence of mind (i.e. ability to express a conclusion that has not been compromised in any way)
– Independence in appearance (i.e. a reasonable and informed third party should conclude that the integrity, objectivity or professional scepticism of the audit firm/audit team member has not been compromised).
See chapter 4 |
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| 2018-09-13 07:58:47 | What is meant by the conceptual framework approach to independence? | meant-conceptual-framework-approach-independence |
What is meant by the conceptual framework approach to independence?
Answer:
The conceptual framework approach to independence means:
– Identify threats to independence
– Evaluate the significance of those threats
– Apply safeguards to reduce threats to acceptable levels or otherwise eliminate by not accepting or terminating the audit engagement.
See chapter 4 |
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| 2018-09-13 07:59:06 | What is ‘money laundering’? | what-is-money-laundering |
What is ‘money laundering’?
Answer:
Money laundering is a process whereby the proceeds of criminal activity are converted into assets appearing to have a legitimate origin.
See chapter 5 |
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| 2018-09-13 07:59:23 | What types of offence fall within the scope of money laundering? | types-offence-fall-within-scope-money-laundering |
What types of offence fall within the scope of money laundering?
Answer:
Concealing/disguising, converting or transferring money that is (or is suspected to be) the proceeds of crime.
Failure to report suspicion of money laundering.
Acquiring (obtaining), using and possessing (retaining) criminal property.
‘Tipping off’.
See chapter 5 |
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| 2018-09-13 07:59:37 | What is ‘tipping off’? | what-is-tipping-off |
What is ‘tipping off’?
Answer:
Tipping off’ is doing anything that might prejudice an investigation into actual or suspected money laundering activities.
See chapter 5 |
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| 2018-09-13 08:01:34 | What is ‘NOCLAR’? | what-is-noclar |
What is ‘NOCLAR’?
Answer:
Non-compliance with laws and regulations (i.e. acts of omission or commission, intentional or unintentional, which are contrary to prevailing laws or regulations).
See chapter 6 |
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| 2018-09-13 08:01:47 | What are the main effects that NOCLAR may have on financial statements? | main-effects-noclar-may-financial-statements |
What are the main effects that NOCLAR may have on financial statements?
Answer:
Potential consequences of NOCLAR include:
– fines/penalties
– litigation/damages
– enforced discontinuation of business activities/expropriation of assets.
The main effects on the financial statements are therefore:
– understated liabilities
– non-disclosure of contingent liabilities
– inappropriate use of the going concern basis of accounting.
See chapter 6 |
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| 2018-09-13 08:01:59 | To whom can the auditor report NOCLAR? | can-auditor-report-noclar |
To whom can the auditor report NOCLAR?
Answer:
To those charged with governance (unless insignificant).
To an appropriate regulatory authority, even if not required by law.
To the shareholders, but only if the matter is material to the financial statements.
See chapter 6 |
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| 2018-09-13 08:02:12 | What are the three criteria for determining whether an auditor is responsible for negligent misstatements in audited financial statements? | three-criteria-determining-whether-auditor-responsible-negligent-misstatements-audited-financial-statements |
What are the three criteria for determining whether an auditor is responsible for negligent misstatements in audited financial statements?
Answer:
1. A ‘duty of care’ was owed to the injured party.
2. There was a breach of that duty.
3. The injured party suffered financial loss as a result of the breach.
See chapter 7 |
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| 2018-09-13 08:02:26 | What conditions must be met for an auditor to owe a duty of care to a third party? | conditions-must-met-auditor-owe-duty-care-third-party |
What conditions must be met for an auditor to owe a duty of care to a third party?
Answer:
1. Foreseeability - the auditor knew or should have known that the third party would rely on the auditor’s work.
2. Proximity – the auditor’s relationship with the third party was sufficiently close.
3. It must be ‘fair, just and reasonable’ to impose a liability on the auditor.
See chapter 7 |
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| 2018-09-13 08:02:43 | What measures can auditors take to restrict their exposure to liability? | measures-can-auditors-take-restrict-exposure-liability |
What measures can auditors take to restrict their exposure to liability?
Answer:
See chapter 7 |
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| 2018-09-13 08:02:57 | What is a ‘misstatement’ in a financial statement. | misstatement-financial-statement |
What is a ‘misstatement’ in a financial statement.
Answer:
A misstatement is any difference between how a transaction, balance or event has been treated in financial statements and how it should have been treated (e.g. in accordance with IFRS). Misstatement may arise from error or fraud.
See chapter 8 |
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| 2018-09-13 08:03:15 | What are the auditor’s responsibilities for the evaluation of misstatements identified during the audit? | auditors-responsibilities-evaluation-misstatements-identified-audit |
What are the auditor’s responsibilities for the evaluation of misstatements identified during the audit?
Answer:
To accumulate misstatements and communicate them to an appropriate level of management and request correction.
If there are uncorrected misstatements, to reassess materiality (and the overall audit strategy and audit plan).
To communicate the effect of uncorrected misstatements to those charged with governance.
To obtain written representation that the effects of uncorrected misstatements are immaterial.
See chapter 8 |
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| 2018-09-13 08:03:30 | What is a ‘significant deficiency in internal control’? | significant-deficiency-internal-control |
What is a ‘significant deficiency in internal control’?
Answer:
A significant deficiency in internal control is one that, in the auditor’s professional judgment, is of sufficient importance to merit the attention of those charged with governance.
See chapter 8 |
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| 2018-09-13 08:04:40 | What factors may determine whether a deficiency (or combination of deficiencies) in internal control is a significant deficiency? | factors-may-determine-whether-deficiency-combination-deficiencies-internal-control-significant-deficiency |
What factors may determine whether a deficiency (or combination of deficiencies) in internal control is a significant deficiency?
Answer:
The likelihood that it could lead to material misstatements.
The susceptibility to loss or fraud of the related asset or liability.
The financial statement amounts exposed to the deficiency.
The volume of activity in the account balance or class of transactions exposed to the deficiency.
See chapter 8 |
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| 2018-09-13 08:05:00 | What is ‘quality control’? | what-is-quality-control |
What is ‘quality control’?
Answer:
Quality control is the policies and procedures adopted by a firm to provide reasonable assurance that all audits are conducted in accordance with ISQC 1.
See chapter 9 |
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| 2018-09-13 08:05:15 | What are the elements of a firm’s system of quality control according to ISQC 1? | elements-firms-system-quality-control-according-isqc-1 |
What are the elements of a firm’s system of quality control according to ISQC 1?
Answer:
Leadership responsibilities for quality in the firm
Relevant ethical requirements
Acceptance and continuance of client relationships and specific engagements
Human resources
Engagement performance
Monitoring
See chapter 9 |
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| 2018-09-13 08:05:28 | What does an ‘Engagement Quality Control Review’ of any client involve? | engagement-quality-control-review-client-involve |
What does an ‘Engagement Quality Control Review’ of any client involve?
Answer:
See chapter 9 |
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| 2018-09-13 08:05:44 | What is materiality? | what-is-materiality |
What is materiality?
Answer:
Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. Materiality depends on the size of the item or error judged in the particular circumstances of its omission or misstatement.
It provides a threshold or cut-off point rather than being a primary qualitative characteristic which information must have if it is to be useful.
See chapter 10 |
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| 2018-09-13 08:07:11 | What is performance materiality? | what-is-performance-materiality-2 |
What is performance materiality?
Answer:
Performance materiality is a lower amount set by the auditor to reduce to an appropriately low level the probability (i.e. risk) that the aggregate of uncorrected and undetected misstatements could exceed materiality for the financial statements as a whole.
See chapter 10 |
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| 2018-09-13 08:07:36 | What is performance materiality used for? | performance-materiality-used |
What is performance materiality used for?
Answer:
Performance materiality is used in designing and performing audit procedures and evaluating the aggregated of immaterial misstatements.
See chapter 10 |
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| 2018-09-13 08:08:40 | The directors have revalued property during the year and recognised $3.5 million in equity. | directors-revalued-property-year-recognised-3-5-million-equity |
The directors have revalued property during the year and recognised $3.5 million in equity.
How should the materiality of the revaluation be assessed?
Answer:
As a % of total assets. If greater than 2% it is material. If less than 1% it is not material. (If between 1% and 2% it is potentially material.)
It should
not
be assessed against revenue (this is irrelevant) or profit before tax (since a revaluation gain does not affect profit; it is recognised in other comprehensive income).
See chapter 10 |
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| 2018-09-13 08:09:03 | What are the components of business risk? | components-business-risk |
What are the components of business risk?
Answer:
Business risk is the risk that an entity is unable to achieve one or more of its strategic objectives. It includes strategic risk, operational risk, financial risk and compliance risk.
(Other classifications of business risk include reputation risk, environment risk, process risk and information risk.)
See chapter 11 |
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| 2018-09-13 08:09:18 | What are the components of audit risk and which of these components should the auditor manage? | components-audit-risk-components-auditor-manage |
What are the components of audit risk and which of these components should the auditor manage?
Answer:
See chapter 11 |
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| 2018-09-13 08:10:29 | What is non-sampling risk and how can it be minimised? | non-sampling-risk-can-minimised |
What is non-sampling risk and how can it be minimised?
Answer:
Non-sampling risk is a component of detection risk and is the risk that arises for any reason not related to sample size.
Non-sampling risk can be minimised through, for example, adequate planning, assigning appropriate staff, the application of professional judgement, clear supervision and review of the work carried out.
See chapter 11 |
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| 2018-09-13 08:10:43 | What is cut-off? | what-is-cut-off |
What is cut-off?
Answer:
Cut-off is the financial statement assertion that transactions and events have been recorded in the correct accounting period.
See chapter 13 |
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| 2018-09-13 08:10:58 | What financial statement assertions are relevant to a liability? | financial-statement-assertions-relevant-liability |
What financial statement assertions are relevant to a liability?
Answer:
Financial statement assertions are the direct (explicit) and indirect claims that management makes about the transactions, balances and events that are embodied in the financial statements. For a liability, these assertions are:
See chapter 13 |
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| 2018-09-13 08:23:39 | What are the evidence gathering procedures identified in ISA 500 Audit Evidence? | evidence-gathering-procedures-identified-isa-500-audit-evidence |
What are the evidence gathering procedures identified in ISA 500 Audit Evidence?
Answer:
Analytical procedures
Enquiry and Confirmation (a specific type of enquiry
Inspection (of records or documents or tangible assets)
Observation (of a process or procedure)
Recalculation (of mathematical accuracy) and Reperformance (independent execution of a procedure or control)
See chapter 13 |
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| 2018-09-13 08:23:56 | What is ‘sufficient appropriate’ audit evidence? | sufficient-appropriate-audit-evidence |
What is ‘sufficient appropriate’ audit evidence?
Answer:
Sufficient appropriate audit evidence is what is needed to support the auditor’s opinion and report. Sufficiency and appropriateness are interrelated – sufficiency is a measure of quantity and appropriateness is a measure of quality (relevance and reliability).
See chapter 13 |
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| 2018-09-13 08:24:25 | What audit risks arise from the distinction between a provision and contingent liabilities? | audit-risks-arise-distinction-provision-contingent-liabilities |
What audit risks arise from the distinction between a provision and contingent liabilities?
Answer:
A provision is a liability (i.e. an obligation) and must be recognised (i.e. in the statement of financial position). A contingent liability that is a possible (but not remote) obligation must be disclosed.
See chapter 14 |
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| 2018-09-13 08:24:37 | Why must financial statements be adjusted for ‘adjusting events’ after the reporting date? | must-financial-statements-adjusted-adjusting-events-reporting-date |
Why must financial statements be adjusted for ‘adjusting events’ after the reporting date?
Answer:
By definition, adjusting events provide evidence of conditions that existed at the reporting date.
See chapter 14 |
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| 2018-09-13 08:24:51 | What is the ‘recoverable amount’ of an asset (or cash-generating unit). | recoverable-amount-asset-cash-generating-unit |
What is the ‘recoverable amount’ of an asset (or cash-generating unit).
Answer:
Recoverable amount is the higher of:
Value in use
Fair value less costs of disposal
See chapter 14 |
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| 2018-09-13 08:25:03 | How should leases be treated in accordance with IFRS 16? | leases-treated-accordance-ifrs-16 |
How should leases be treated in accordance with IFRS 16?
Answer:
All leases except short-term leases (not more than 12 months) and leases of low-value assets (less than $5,000) must be capitalised as right-of-use assets in the statement of financial position (with a
corresponding lease liability).
See chapter 14 |
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| 2018-09-13 08:25:18 | What audit evidence is necessary for the audit of a defined benefit scheme? | audit-evidence-necessary-audit-defined-benefit-scheme |
What audit evidence is necessary for the audit of a defined benefit scheme?
Answer:
The audit of a defined benefit scheme will require an independent consulting actuary's report.
See chapter 14 |
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| 2018-09-13 08:25:50 | When is a performance obligation satisfied over time in accordance with IFRS 15? | performance-obligation-satisfied-time-accordance-ifrs-15 |
When is a performance obligation satisfied over time in accordance with IFRS 15?
Answer:
A performance obligation is satisfied over time if ONE of the following criteria is met:
See chapter 14 |
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| 2018-09-13 08:26:27 | What type of computer-assisted audit technique could be used in analytical procedures. | type-computer-assisted-audit-technique-used-analytical-procedures |
What type of computer-assisted audit technique could be used in analytical procedures.
Answer:
Audit programs (software) are mainly used for substantive procedures and can therefore be used for analytical procedures.
See chapter 15 |
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| 2018-09-13 08:26:40 | What is the purpose of test data? | purpose-test-data |
What is the purpose of test data?
Answer:
Test data is data submitted for processing by the client's computer system to test the operation of controls. If effective, the level of substantive procedures can then be reduced.
See chapter 15 |
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| 2018-09-13 08:26:53 | Who is a ‘management’s expert’? | who-is-a-managements-expert |
Who is a ‘management’s expert’?
Answer:
Management’s expert is an individual (or organisation) possessing expertise in a field other than accounting or auditing, whose work assists management in preparing the financial statements.
See chapter 16 |
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| 2018-09-13 08:27:04 | Who is an ‘auditor’s expert’? | who-is-an-auditors-expert |
Who is an ‘auditor’s expert’?
Answer:
Auditor's expert is an individual (or organisation) possessing expertise in a field other than accounting or auditing, whose work is used by the auditor in obtaining sufficient appropriate audit evidence.
See chapter 16 |
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| 2018-09-13 08:27:19 | What factors should the external auditor consider when assessing whether to rely on the work of internal audit? | factors-external-auditor-consider-assessing-whether-rely-work-internal-audit |
What factors should the external auditor consider when assessing whether to rely on the work of internal audit?
Answer:
Criteria for assessing whether the external auditor should seek to reply on the work of internal audit are:
See chapter 17 |
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| 2018-09-13 08:27:35 | What is ‘direct assistance’? | what-is-direct-assistance |
What is ‘direct assistance’?
Answer:
Direct assistance is the use of internal auditors to perform audit procedures under the direction, supervision and review of the external auditor.
See chapter 17 |
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| 2018-09-13 08:28:30 | What finance function activities may be outsourced? | finance-function-activities-may-outsourced |
What finance function activities may be outsourced?
Answer:
See chapter 18 |
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| 2018-09-13 08:29:15 | What is the difference between a Type 1 and Type 2 assurance report on the controls of a service organisation? | difference-type-1-type-2-assurance-report-controls-service-organisation |
What is the difference between a Type 1 and Type 2 assurance report on the controls of a service organisation?
Answer:
A Type 1 report concerns the design and implementation of the control systems. A Type 2 report concerns the operating effectiveness of the control system.
See chapter 18 |
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| 2018-09-13 08:29:30 | Why should the auditor obtain written representations? | auditor-obtain-written-representations |
Why should the auditor obtain written representations?
Answer:
The auditor should obtain written representations:
See chapter 19 |
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| 2018-09-13 08:43:58 | Can a management representation alone ever provide sufficient audit evidence relating to a matter that is material to the financial statements? | can-management-representation-alone-ever-provide-sufficient-audit-evidence-relating-matter-material-financial-statements |
Can a management representation alone ever provide sufficient audit evidence relating to a matter that is material to the financial statements?
Answer:
No – if management representation is the only source of evidence it is insufficient.
See chapter 19 |
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| 2018-09-13 08:44:12 | What written representation might be included in a representation letter relating to events after the reporting date? | written-representation-might-included-representation-letter-relating-events-reporting-date |
What written representation might be included in a representation letter relating to events after the reporting date?
Answer:
That management is not aware of any material events occurring after the reporting date that may require adjust or disclosure other than those that have been adjusted or disclosed.
See chapter 19 |
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| 2018-09-13 08:44:27 | What is a related party transaction? | related-party-transaction |
What is a related party transaction?
Answer:
A related party transaction is a transfer of resources or obligations between related parties, regardless of whether a price is charged.
See chapter 20 |
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| 2018-09-13 08:44:55 | What types of transactions that appear to be outside normal business terms may identify relate party transactions? | types-transactions-appear-outside-normal-business-terms-may-identify-relate-party-transactions |
What types of transactions that appear to be outside normal business terms may identify relate party transactions?
Answer:
Sales/purchase transactions with abnormal terms of trade (e.g. inflated prices or large discounts).
Leasing premises or providing management services on below market terms.
Unrecorded transactions (e.g. services provided at no charge).
Transactions lacking a business reason for their occurrence.
See chapter 20 |
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| 2018-09-13 08:45:10 | What are the principal auditing issue arising from related party relationships? | principal-auditing-issue-arising-related-party-relationships |
What are the principal auditing issue arising from related party relationships?
Answer:
The auditor must understand related party relationships to be able to:
recognise the increased risk of fraud; and
conclude on the fair presentation of related party transactions (in accordance with IAS 24) and compliance with legislation.
See chapter 20 |
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| 2018-09-13 08:46:04 | What disclosures in the financial statements do related party transactions require? | disclosures-financial-statements-related-party-transactions-require |
What disclosures in the financial statements do related party transactions require?
Answer:
Disclosure required include:
See chapter 20 |
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| 2018-09-13 08:46:37 | In the context of the audit of group financial statements, what is a component? | context-audit-group-financial-statements-component |
In the context of the audit of group financial statements, what is a component?
Answer:
A component is an entity or business activity whose financial information is included in group (consolidated) financial statements.
See chapter 21 |
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| 2018-09-13 08:46:53 | What is component materiality and how does it compare with group materiality? | component-materiality-compare-group-materiality |
What is component materiality and how does it compare with group materiality?
Answer:
Component materiality is the materiality of a component as determined by the group auditor. It will be different for each component, lower than group materiality and not necessarily an arithmetical proportion of group materiality (i.e. their sum can be greater than group materiality).
See chapter 21 |
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| 2018-09-13 08:47:06 | What is a ‘significant component’? | what-is-a-significant-component |
What is a ‘significant component’?
Answer:
A significant component is a component identified by the group auditor that is likely to include significant risks of material misstatement of the group financial statements (either because it is of individual financial significance to the group or due to its specific nature or circumstances). A component that contributes 15% of a chosen benchmark (e.g. group assets, profit or revenue) is likely to be regarded as significant.
See chapter 21 |
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| 2018-09-13 08:47:19 | How is goodwill calculated on initial acquisition of a subsidiary? | goodwill-calculated-initial-acquisition-subsidiary |
How is goodwill calculated on initial acquisition of a subsidiary?
Answer:
Goodwill on acquisition is calculated as:
Fair value of consideration
Plus: Value of non-controlling interest (if any)
Less: Fair value of net assets acquired
See chapter 21 |
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| 2018-09-13 08:47:46 | What audit considerations may arise when a group acquires a new subsidiary during the year? | audit-considerations-may-arise-group-acquires-new-subsidiary-year |
What audit considerations may arise when a group acquires a new subsidiary during the year?
Answer:
Confirmation of date that control was obtained
Calculation of goodwill
Elimination of inter-company transactions
Agreement of inter-company balances (so that they can be eliminated)
Adjustments to apply uniform accounting policies
Adjustments for non-coterminous reporting dates
See chapter 21 |
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| 2018-09-13 08:47:58 | What is a ‘comfort letter’? | what-is-a-comfort-letter |
What is a ‘comfort letter’?
Answer:
A comfort letter is a formal letter of support that confirms a parent’s intention to keep a subsidiary in operational existence.
See chapter 21 |
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| 2018-09-13 08:48:11 | What is a ‘transnational audit’? | what-is-a-transnational-audit |
What is a ‘transnational audit’?
Answer:
A transnational audit is an audit of financial statements which is, or may be, relied on outside the audited entity's home jurisdiction for purposes of significant lending, investment or regulatory decisions.
See chapter 21 |
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| 2018-09-13 08:48:25 | What is the difference between an adjusting event and a non-adjusting event? | difference-adjusting-event-non-adjusting-event |
What is the difference between an adjusting event and a non-adjusting event?
Answer:
Both adjusting and non-adjusting events are events after the reporting period (IAS 10). The difference is that adjusting events provide evidence of conditions that existed at the reporting date whereas as non-adjusting events indicate conditions that arose after the reporting date.
See chapter 22 |
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| 2018-09-13 08:48:38 | What is the difference between ‘events after the reporting period’ (IAS 10) and ‘subsequent events’ (ISA 560)? | difference-events-reporting-period-ias-10-subsequent-events-isa-560 |
What is the difference between ‘events after the reporting period’ (IAS 10) and ‘subsequent events’ (ISA 560)?
Answer:
Events after the reporting period are those that occur between the end of the reporting period and the date on which the financial statements are authorised for issue (IAS 10.
Subsequent events are:
events that occur between the date of the financial statements and the date of the auditor’s report; and
facts that become known after the date of the auditor’s report.
See chapter 22 |
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| 2018-09-13 08:52:31 | What is the auditor’s responsibility for subsequent events? | auditors-responsibility-subsequent-events |
What is the auditor’s responsibility for subsequent events?
Answer:
Before the date of the auditor’s report the auditor has a proactive duty to identify subsequent events.
After the date of the auditor’s report the auditor’s duty is only to respond to facts which become known. For example:
if the financial statements have not yet been issued, management can still amend them (and the auditor amend the auditor’s report) – this is rare as the auditor’s report will generally be signed immediately before their issue;
if the financial statements have been issued, they may be withdrawn and reissued (with a new auditor’s report) – this is exceptional.
See chapter 22 |
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| 2018-09-13 08:53:00 | What are the four types of audit opinion? | four-types-audit-opinion |
What are the four types of audit opinion?
Answer:
See chapter 23 |
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| 2018-09-13 08:53:34 | In which paragraph in the auditor’s report will the auditor reference to compliance with International Standards on Auditing? | paragraph-auditors-report-will-auditor-reference-compliance-international-standards-auditing |
In which paragraph in the auditor’s report will the auditor reference to compliance with International Standards on Auditing?
Answer:
Compliance with ISAs will be stated in the basis of opinion paragraph.
(The financial reporting framework (e.g. IFRS) will be identified in the opinion paragraph.)
See chapter 23 |
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| 2018-09-13 08:53:54 | An auditor concludes that management’s use of the going concern basis of accounting is appropriate but material uncertainty exists. | auditor-concludes-managements-use-going-concern-basis-accounting-appropriate-material-uncertainty-exists |
An auditor concludes that management’s use of the going concern basis of accounting is appropriate but material uncertainty exists. Where should this be reported in the auditor’s report?
Answer:
A material uncertainty related to going concern should be reported in a separate section, suitably headed (e.g. ‘Material Uncertainty Related to Going Concern’) of the auditor’s report.
See chapter 23 |
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| 2018-09-13 08:54:08 | What is an ‘emphasis of matter’ paragraph? | emphasis-matter-paragraph |
What is an ‘emphasis of matter’ paragraph?
Answer:
An ‘emphasis of matter’ paragraph draws the users’ attention to a matter which, although appropriately presented or disclosed in the financial statements, is fundamental to their understanding of the financial statements.
See chapter 23 |
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| 2018-09-13 08:54:22 | What is an ‘other matter’ paragraph? | what-is-an-other-matter-paragraph |
What is an ‘other matter’ paragraph?
Answer:
An ‘other matter’ paragraph draws the users’ attention to a matter which is relevant to their understanding of the audit, the auditor’s responsibilities or auditor’s report (rather than the financial statements).
See chapter 23 |
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| 2018-09-13 08:55:03 | What is a key audit matter (KAM)? | key-audit-matter-kam |
What is a key audit matter (KAM)?
Answer:
KAMs are those matters which, in the auditor’s professional judgement, were of most significance in the audit of the financial statements of the current period. They are selected from matters communicated to those charged to governance.
Inclusion of KAMs in the auditor’s report is a requirement only for listed companies.
See chapter 23 |
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| 2018-09-13 08:55:17 | During the year your client migrated its principal financial reporting processes | year-client-migrated-principal-financial-reporting-processes |
During the year your client migrated its principal financial reporting processes to a new IT system.
Where would this be reported in the auditor’s report, if at all?
Answer:
If the client is a listed entity it would be a key audit matter. Due to inherent risk of error this would be of great significance to the audit and a matter communicated to those charged with governance. If the client is not a listed entity, it would not be reported.
See chapter 24 |
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| 2018-09-13 08:55:49 | An auditor concludes that management’s use of the going concern basis of accounting | auditor-concludes-managements-use-going-concern-basis-accounting |
An auditor concludes that management’s use of the going concern basis of accounting is appropriate but material uncertainty exists as borrowing facilities are coming to an end and new arrangements have not yet been agreed. This is not disclosed in the notes to the financial statements.
How would this affect the audit opinion, if at all?
Answer:
The lack of disclosure gives risk to material misstatement. The audit opinion should therefore be qualified ‘except for’.
(If the matter had been adequately disclosed the auditor’s report would include a Material Uncertainty Related to Going Concern section and the audit opinion would not be modified in this regard.)
See chapter 25 |
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| 2018-09-13 08:56:37 | Shortly before the reporting date a fire in the accounts department | shortly-reporting-date-fire-accounts-department |
Shortly before the reporting date a fire in the accounts department destroyed many of the accounting records and management has been able to only partially reconstruct them.
How would this affect the auditor’s report?
Answer:
The pervasive lack of sufficient appropriate evidence will give rise to a disclaimer of opinion. The basis for the disclaimer of the opinion will explain the scope limitation.
(Even if this were a listed client, it would not be reported as a key audit matter as the auditor cannot have audited the financial statements.)
See chapter 25 |
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| 2018-09-13 08:56:57 | During the year your client acquired a subsidiary that is a significant component. | year-client-acquired-subsidiary-significant-component |
During the year your client acquired a subsidiary that is a significant component. The component auditor has given an unmodified opinion on the subsidiary’s financial statements, which report a loss for the year. The group financial statements show only the investment at cost and management has refused to consolidate the subsidiary’s results.
How would this affect your audit opinion?
Answer:
Non-consolidation of a clearly material subsidiary (described as ‘significant component’) would have a pervasive effect on the consolidated financial statements (since all the line items in the subsidiary’s financial statements should be consolidated 100%).
The audit opinion would be adverse – on the grounds of non-compliance with IFRS 3 Business Combinations.
See chapter 25 |
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| 2018-09-13 08:58:23 | What types of engagement may be described as an assurance engagement in accordance with the IESBA’s international framework? | types-engagement-may-described-assurance-engagement-accordance-iesbas-international-framework |
What types of engagement may be described as an assurance engagement in accordance with the IESBA’s international framework?
Answer:
Assurance engagements include:
See chapter 26 |
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| 2018-09-13 08:58:51 | What types of engagement may be described as review engagements? | types-engagement-may-described-review-engagements |
What types of engagement may be described as review engagements?
Answer:
Review engagements include:
See chapter 26 |
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| 2018-09-13 08:59:16 | What types of engagement are described as related services? | types-engagement-described-related-services |
What types of engagement are described as related services?
Answer:
Related services include:
- Engagements to perform agreed-upon procedures
- Compilation engagements
See chapter 26 |
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| 2018-09-13 08:59:31 | In the context of prospective financial information, what is the difference between a ‘forecast’ and a ‘projection’, if any? | context-prospective-financial-information-difference-forecast-projection |
In the context of prospective financial information, what is the difference between a ‘forecast’ and a ‘projection’, if any?
Answer:
A forecast is based on assumptions about future events and management’s actions that are expected to happen (e.g. for the unexpired period of the current accounting period).
A projection is based future events and management actions which are not necessarily expected to take place (i.e. hypothetical/‘what-if’ assumptions).
See chapter 27 |
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| 2018-09-13 08:59:45 | What level of assurance can be provided by an examination of prospective financial information? | level-assurance-can-provided-examination-prospective-financial-information |
What level of assurance can be provided by an examination of prospective financial information?
Answer:
The examination of prospective financial information is a limited assurance engagement and the report will include a statement of ‘negative’ assurance.
See chapter 27 |
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| 2018-09-13 09:00:00 | What is the difference between a ‘statement of cash flows’ and a ‘cash flow forecast (or budget)’? | difference-statement-cash-flows-cash-flow-forecast-budget |
What is the difference between a ‘statement of cash flows’ and a ‘cash flow forecast (or budget)’?
Answer:
A statement of cash flows is a financial statement which is prepared and presented in a set of historical financial statements in accordance with IAS 7.
A cash flow forecast (or budget) may be prepared as an internal management tool (e.g. to assist in assessing going concern or evaluating a proposed capital investment) or to provide information to third parties (e.g. lenders).
See chapter 27 |
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| 2018-09-13 09:00:14 | What are the objectives of an examination to report on prospective financial information (PFI)? | objectives-examination-report-prospective-financial-information-pfi |
What are the objectives of an examination to report on prospective financial information (PFI)?
Answer:
To ensure that assumptions are:
See chapter 27 |
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| 2018-09-13 09:01:31 | What is a ‘forensic audit’? | what-is-a-forensic-audit |
What is a ‘forensic audit’?
Answer:
A forensic audit is the process of gathering, analysing and reporting on data (an ‘audit’) for use in connection with courts of law (‘forensic’).
See chapter 28 |
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| 2018-09-13 09:01:49 | What are the main applications of forensic auditing? | main-applications-forensic-auditing |
What are the main applications of forensic auditing?
Answer:
The main applications of forensic auditing include:
See chapter 28 |
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| 2018-09-13 09:02:02 | What might the purposes of a fraud investigation by a forensic accountant? | might-purposes-fraud-investigation-forensic-accountant |
What might the purposes of a fraud investigation by a forensic accountant?
Answer:
A fraud investigation by a forensic accountant may be carried out:
See chapter 28 |
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| 2018-09-13 09:02:17 | What is an ‘integrated report’? | what-is-an-integrated-report |
What is an ‘integrated report’?
Answer:
An integrated report is a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term.
(This is assumed knowledge of Strategic Business Reporting.)
See chapter 29 |
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| 2018-09-13 09:02:33 | What risks of misstatement in financial statements may arise from the effects of environmental matters? | risks-misstatement-financial-statements-may-arise-effects-environmental-matters |
What risks of misstatement in financial statements may arise from the effects of environmental matters?
Answer:
See chapter 29 |
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| 2018-09-13 09:05:02 | What evidence would you seek to verify the ‘number of serious accidents in the workplace’ | evidence-seek-verify-number-serious-accidents-workplace |
What evidence would you seek to verify the ‘number of serious accidents in the workplace’ included in your audit client’s sustainability report?
Answer:
See chapter 29 |
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| 2018-09-13 09:05:30 | How does the scope of a due diligence (DD) assignment generally compare with an audit of financial statements? | scope-due-diligence-dd-assignment-generally-compare-audit-financial-statements |
How does the scope of a due diligence (DD) assignment generally compare with an audit of financial statements?
Answer:
The scope of a DD assignment is generally much wider that an audit of historical financial statements. An audit essentially concerns only the current year and comparatives. DD may include:
See chapter 30 |
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| 2018-09-13 09:06:01 | What factors should be considered before accepting a due diligence engagement to report on a proposed acquisition by and audit client? | factors-considered-accepting-due-diligence-engagement-report-proposed-acquisition-audit-client |
What factors should be considered before accepting a due diligence engagement to report on a proposed acquisition by and audit client?
Answer:
See chapter 30 |
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| 2018-09-13 09:06:26 | Why are the procedures undertaken in a due diligence assignment to gather information principally analytical procedures and inquiry? | procedures-undertaken-due-diligence-assignment-gather-information-principally-analytical-procedures-inquiry |
Why are the procedures undertaken in a due diligence assignment to gather information principally analytical procedures and inquiry?
Answer:
Although other audit procedures may be conducted in an agreed-upon-procedures engagement, due diligence is essentially a review engagement. The principal procedures are inquiry and analytical procedures because as such assignments are comparably short, trend analysis, etc is more appropriate than external confirmations, physical inventory observation, etc. Also, the review is likely to include forecasts (PFI) which cannot be ‘audited’.
See chapter 30 |
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| 2018-09-13 09:06:40 | What is a ‘performance audit’? | what-is-a-performance-audit |
What is a ‘performance audit’?
Answer:
A performance audit is an independent examination of the efficiency and effectiveness of government undertakings, with due regard to economy, and the aim of leading to improvements.
See chapter 31 |
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| 2018-09-13 09:07:06 | What examples of measures of economy, efficiency and effectiveness be relevant to a health service responsible for hospitals? | examples-measures-economy-efficiency-effectiveness-relevant-health-service-responsible-hospitals |
What examples of measures of economy, efficiency and effectiveness be relevant to a health service responsible for hospitals?
Answer:
See chapter 31 |
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| 2018-09-13 09:07:32 | What are the uses of performance information? | uses-performance-information |
What are the uses of performance information?
Answer:
See chapter 31 |
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| 2020-01-20 12:19:12 | What are the 6 qualitative characteristics of financial information? | what-are-the-6-qualitative-characteristics-of-financial-information |
What are the 6 qualitative characteristics of financial information?
Answer:
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| 2020-01-20 12:25:54 | Define an asset | define-an-asset | Define an asset Answer: Present economic resource / controlled / past event. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:48:54 | Identify 5 headings in other comprehensive income | identify-5-headings-in-other-comprehensive-income |
Identify 5 headings in other comprehensive income:
Answer:
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| 2020-01-20 15:49:17 | Define joint arrangement. | define-joint-arrangement | Define joint arrangement. Answer: Two or more parties have joint control / each party has the right of veto over key decisions. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:49:34 | How are joint ventures accounted for? | how-are-joint-ventures-accounted-for | How are joint ventures accounted for? Answer: Equity accounting. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:49:52 | Define Functional Currency. | define-functional-currency | Define Functional Currency. Answer: Currency of the primary economic environment in which the entity operates. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:50:21 | In a cash flow statement where would you show dividends from associates | in-a-cash-flow-statement-where-would-you-show-dividends-from-associates | In a cash flow statement where would you show dividends from associates and dividends to NCI? Answer: Dividends from associates would be in investing activities. Dividends to NCI would be in financing activities. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:51:17 | Should you depreciate PPE and investment properties if held at FV? | should-you-depreciate-ppe-and-investment-properties-if-held-at-fv | Should you depreciate PPE and investment properties if held at FV? Answer: PPE – yes Investment properties - no | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:51:42 | In what circumstances should borrowing costs be capitalised? | in-what-circumstances-should-borrowing-costs-be-capitalised | In what circumstances should borrowing costs be capitalised? Answer: If an asset is being constructed over a period of time. It is then known as a qualifying asset. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:51:57 | Can you capitalise non purchased intangibles? | can-you-capitalise-non-purchased-intangibles | Can you capitalise non purchased intangibles? Answer: You must capitalise development costs if the project is commercially viable etc. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:52:18 | Define value in use and explain its relevance. | define-value-in-use-and-explain-its-relevance | Define value in use and explain its relevance. Answer: Present value of the future cash flows from the asset. Used when testing for impairment. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:53:04 | At what value are non-current assets held for sale recognised in the SFP? | at-what-value-are-non-current-assets-held-for-sale-recognised-in-the-sfp |
At what value are non-current assets held for sale recognised in the SFP?
Answer:
Lower of:
Existing carrying value; Fair value less cost to sell. |
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| 2020-01-20 15:53:31 | Where in the P&L would you record a discontinued operation? | where-in-the-pl-would-you-record-a-discontinued-operation | Where in the P&L would you record a discontinued operation? Answer: After tax. Before NCI. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:53:47 | Where in the SFP would you record a non-current assets held for sale? | where-in-the-sfp-would-you-record-a-non-current-assets-held-for-sale | Where in the SFP would you record a non-current assets held for sale? Answer: Below current assets. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:54:01 | What is a defined benefit pension scheme? | what-is-a-defined-benefit-pension-scheme | What is a defined benefit pension scheme? Answer: "Employer makes a promise to the employee that they will receive certain benefits when they retire. Benefits will be linked to length of service and the employees’ salary on retirement." | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:54:16 | Which type of pension scheme will normally appear in an employer’s SFP? | which-type-of-pension-scheme-will-normally-appear-in-an-employers-sfp | Which type of pension scheme will normally appear in an employer’s SFP? Answer: Defined benefit pension scheme. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:54:55 | How do you measure the P&L charge for equity-settled share based pay schemes? | how-do-you-measure-the-pl-charge-for-equity-settled-share-based-pay-schemes |
How do you measure the P&L charge for equity-settled share based pay schemes?
Answer:
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| 2020-01-20 15:55:36 | How do you measure the P&L charge for cash-settled share based pay schemes? | how-do-you-measure-the-pl-charge-for-cash-settled-share-based-pay-schemes |
How do you measure the P&L charge for cash-settled share based pay schemes?
Answer:
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| 2020-01-20 15:56:13 | What is the accounting for negative goodwill? | what-is-the-accounting-for-negative-goodwill | What is the accounting for negative goodwill? Answer: Negative goodwill should be credited to the P&L immediately. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:56:37 | Should goodwill be amortised? | should-goodwill-be-amortised | Should goodwill be amortised? Answer: No. It should however be reviewed for impairment at each SFP date. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:57:13 | Define liability and financial liability | define-liability-and-financial-liability | Define liability and financial liability. Answer: Liability = Present obligation / transfer economic resources / past event. Financial liability = Obligation to deliver cash. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:57:42 | Define derivative. | define-derivative |
Define derivative.
Answer:
|
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| 2020-01-20 15:58:35 | Andrew owns some sausages and an option to sell the sausages. | andrew-owns-some-sausages-and-an-option-to-sell-the-sausages | Andrew owns some sausages and an option to sell the sausages. What sort of hedge accounting can he use? Answer: Fair value hedge accounting. The derivative protects Andrew from change in value of the recognised asset (the sausages). | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 15:59:01 | Mary expects to sell some sausages to the King of Neverland next year. | mary-expects-to-sell-some-sausages-to-the-king-of-neverland-next-year | Mary expects to sell some sausages to the King of Neverland next year. She enters a currency forward to sell the Neverland dollars when she receives them next year. What sort of hedge accounting can she use? Answer: Cash flow hedge accounting. The derivative protects Mary from changes in value in highly probable future cash flows | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:01:25 | Define Level 1 input for fair value purposes. | define-level-1-input-for-fair-value-purposes | Define Level 1 input for fair value purposes. Give an example of an asset for which Level 1 would be used. Answer: Quoted price in active market for identical asset or liability. Example = share listed on a stock exchange. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:01:45 | Define operating segment. | define-operating-segment | Define operating segment. Answer: Segment whose results are regularly reviewed by chief operating decision maker. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:02:16 | What are the five stages of the revenue recognition model? | what-are-the-five-stages-of-the-revenue-recognition-model |
What are the five stages of the revenue recognition model?
Answer:
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| 2020-01-20 16:02:30 | Define a lease | define-a-lease | Define a lease. Answer: Right to control / specified asset / period of time / in exchange for consideration. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:02:57 | How should the lessee normally reflect a lease in the financial statements? | how-should-the-lessee-normally-reflect-a-lease-in-the-financial-statements | How should the lessee normally reflect a lease in the financial statements? Answer: SFP Right of use asset and lease liability P&L Depreciation and finance cost | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:04:14 | In what circumstances should a company recognise a deferred tax asset relating to losses? | in-what-circumstances-should-a-company-recognise-a-deferred-tax-asset-relating-to-losses | In what circumstances should a company recognise a deferred tax asset relating to losses? Answer: Only if it is likely that the company will make future taxable profits against which the losses can be offset. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:04:34 | Define a provision | define-a-provision | Define a provision. Answer: Liability of uncertain timing or amount. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:04:55 | In what circumstances can you recognise a provision for reorganisation? | in-what-circumstances-can-you-recognise-a-provision-for-reorganisation | In what circumstances can you recognise a provision for reorganisation? Answer: Detailed formal plan. Announced to those affected (e.g. the staff). | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:05:20 | When should contingent liabilities and contingent assets be disclosed? | when-should-contingent-liabilities-and-contingent-assets-be-disclosed | When should contingent liabilities and contingent assets be disclosed? Answer: Contingent liabilities = possible Contingent assets = probable. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:05:50 | In what 2 situations should you make a prior period adjustment? | in-what-2-situations-should-you-make-a-prior-period-adjustment | In what 2 situations should you make a prior period adjustment? Answer: Change in accounting policy. Material error in prior year. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:06:10 | What are the 3 key related party disclosures? | what-are-the-3-key-related-party-disclosures |
What are the 3 key related party disclosures?
Answer:
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| 2020-01-20 16:07:20 | What is the formula for EPS? | what-is-the-formula-for-eps | What is the formula for EPS? Answer: Profit for the year attributable to the ordinary sharehokders (i.e. and after NCI) divided by: Weighted average number of equity shares multiplied by 100 | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:09:46 | For SMEs what is the accounting treatment of development costs? | for-smes-what-is-the-accounting-treatment-of-development-costs | For SMEs what is the accounting treatment of development costs? Answer: Expense in the P&L. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:10:04 | For integrated reporting identify the six capitals. | for-integrated-reporting-identify-the-six-capitals |
For integrated reporting identify the six capitals.
Answer:
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| 2020-01-20 16:10:56 | If an ACCA accountant does not know the accounting treatment of leases, what is the ethical issue? | if-an-acca-accountant-does-not-know-the-accounting-treatment-of-leases-what-is-the-ethical-issue | If an ACCA accountant does not know the accounting treatment of leases, what is the ethical issue? Answer: Lack of professional competence and due care (ACCA Principle) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:12:30 | In what circumstances should an asset be recognised in the financial statements? | in-what-circumstances-should-an-asset-be-recognised-in-the-financial-statements | In what circumstances should an asset be recognised in the financial statements? Answer: If it results in relevant and faithful representation. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:12:55 | Define equity. | define-equity | Define equity Answer: Residual interest in assets minus liabilities. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:13:17 | Parent has December year-end. Subsidiary has October year-end. Can parent consolidate subsidiary? | parent-has-december-year-end-subsidiary-has-october-year-end-can-parent-consolidate-subsidiary | Parent has December year-end. Subsidiary has October year-end. Can parent consolidate subsidiary? Answer: Yes. The maximum gap is three months. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:13:37 | Give examples of monetary assets and explain their relevance in SBR | give-examples-of-monetary-assets-and-explain-their-relevance-in-sbr | Give examples of monetary assets and explain their relevance in SBR Answer: Receivables and cash. Translation of foreign transactions by a company. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:13:55 | If a company is using the fair value model, how often should it revalue PPE and IP? | if-a-company-is-using-the-fair-value-model-how-often-should-it-revalue-ppe-and-ip | If a company is using the fair value model, how often should it revalue PPE and IP? Answer: PPE – on regular basis – e.g. every 3 to 5 years. IP – every year. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:14:12 | How should a company account for a government grant? | how-should-a-company-account-for-a-government-grant | How should a company account for a government grant? Answer: Recognise in the P&L over the period in which the related expenditure is recognised. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:14:33 | Define investment property. | define-investment-property | Define investment property. Answer: Land and buildings held to earn rentals and / or for capital appreciation. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:15:03 | In what 3 circumstances should a company conduct an impairment review? | in-what-3-circumstances-should-a-company-conduct-an-impairment-review | In what 3 circumstances should a company conduct an impairment review? Answer: 1) If there is goodwill in SFP. 2) If there are intangibles in the SFP which are not being amortised. 3) If there is an impairment indicator – e.g. the government bans a product that the company sells. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:15:27 | How are derivatives recognised in the financial statements? | how-are-derivatives-recognised-in-the-financial-statements | How are derivatives recognised in the financial statements? Answer: SFP – fair value. P&L – changes in fair value. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-01-20 16:19:23 | If an ACCA accountant deliberately fails to consolidate a subsidiary, what is the ethical issue? | if-an-acca-accountant-deliberately-fails-to-consolidate-a-subsidiary-what-is-the-ethical-issue | If an ACCA accountant deliberately fails to consolidate a subsidiary, what is the ethical issue? Answer: Lack of integrity -straightforward business conduct (ACCA Principle) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-02-11 15:10:23 | How may advocacy threats arise? | how-may-advocacy-threats-arise | How may advocacy threats arise? Answer: Advocacy threats arise when a professional accountant promotes a client's position or opinion to the extent that subsequent objectivity may be compromised. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-02-11 15:12:03 | What is “internal audit”? | what-is-internal-audit | What is “internal audit”? Answer: Internal audit is an independent, objective assurance and consulting activity designed to add value and improve an organisation's operations. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-02-11 15:13:58 | What is "control risk"? | what-is-control-risk | What is "control risk"? Answer: Control risk is the risk that an inherent risk will not be prevented, or detected and corrected, on a timely basis by internal control. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-02-11 15:17:23 | What two types of fraud may result in the misstatement of financial statements? | 561378 | What two types of fraud may result in the misstatement of financial statements? Answer: 1. Fraudulent financial reporting 2. Misappropriation of assets | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 07:32:13 | What is the difference between risk and uncertainty? | what-is-the-difference-between-risk-and-uncertainty-4 | What is the difference between risk and uncertainty? Answer: Risk is when both the probability that a particular outcome occurs and its impact are known. If the probabilities of different outcomes occurring are not known then we are working under conditions of uncertainty, not risk. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 07:32:14 | It the following statement true or false? Risk covers the occurrence of both good and bad outcomes. | risk-covers-the-occurrence-of-both-good-and-bad-outcomes | It the following statement true or false? Risk covers the occurrence of both good and bad outcomes. Answer: True | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 07:32:15 | What is meant by the term ‘pure risk’? | what-is-meant-by-the-term-pure-risk | What is meant by the term ‘pure risk’? Answer: This is where there is a chance of loss but no gain. There is downside risk only. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 09:32:33 | What is meant by the term ’speculative risk’? | what-is-meant-by-the-term-speculative-risk | What is meant by the term ’speculative risk’? Answer: This is where there can be both good and bad outcomes. It might occasionally be called ‘two-way risk’. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 09:32:52 | What is the relationship between ‘conformance’ and ‘performance’? | what-is-the-relationship-between-conformance-and-performance | What is the relationship between ‘conformance’ and ‘performance’? Answer: Conformance (compliance with rules) is necessary to avoid failure, but it does not produce success. Performance implies taking some risks. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 09:35:51 | What are the labels for the two blank quadrants in the diagram below? | what-are-the-labels-for-the-two-blank-quadrants-in-the-diagram-below |
What are the labels for the two blank quadrants in the diagram below?
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| 2020-05-21 12:58:54 | In cyber-security, what is meant by ‘forensic analysis’? | in-cyber-security-what-is-meant-by-forensic-analysis | In cyber-security, what is meant by ‘forensic analysis’? Answer: ‘Forensic’ implies that findings will be presented in a court of law or possibly some legal argument or negotiation. Computer forensics techniques discover, preserve and analyse information on computer systems. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 12:58:55 | "In cyber-security, what is meant by ‘malware analysis’?" | in-cyber-security-what-is-meant-by-malware-analysis | "In cyber-security, what is meant by ‘malware analysis’?" what is meant by ‘malware analysis’?" This aims process aims to understand what a piece of malware does and how it does it. The analysis might discover ways in which the malware can be countered. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 12:58:56 | "In cyber-security | in-cyber-security-what-is-meant-by-penetration-testing | "In cyber-security, what is meant by ‘penetration testing?" Penetration testing (‘a pen test’) is an authorised simulated cyberattack on a computer system. It is a controlled form of hacking where the hackers act on behalf of the client to probe the system for vulnerabilities. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 12:58:57 | What is a bot? | what-is-a-bot | What is a bot? Answer: Bots: derived from ‘robot, this is a piece of software that carries out automated processes. For example, emails or posts on social media can be generated to give the appearance of support for particular causes. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 12:58:59 | What is a DOS attack? | what-is-a-dos-attack | What is a DOS attack? Answer: Denial of service (DOS) attacks. Typically, the overwhelming of internet sites with demands for responses so that legitimate users are denied service. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 12:59:00 | What is cloud computing? | what-is-cloud-computing | What is cloud computing? Answer: Data, programs and processing are (mostly) not held locally, but are held remotely on servers (the cloud). Software updates are easy and heavy processing can be carried out on powerful cloud computers rather than each user having to have a powerful machine. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 12:59:01 | What is malware? | what-is-malware | What is malware? Answer: Malware is a term that covers all software intentionally designed to cause damage to a client computer, a server, the network or data. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 13:37:38 | What is the difference between strategic risks and operational risks? | what-is-the-difference-between-strategic-risks-and-operational-risks | What is the difference between strategic risks and operational risks? Answer: Strategic risks: arise from long term effects such as those relating to the nature and type of business, changes in competitive and legal environments, poor long-term decisions being made. Operational risks: short-term, day-to-day problems. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 13:54:51 | What is an organisation’s risk appetite? | what-is-an-organisations-risk-appetite | What is an organisation’s risk appetite? Answer: ‘Risk appetite’ is the term given to describe the amount of risk an organisation is willing to accept in pursuit of value. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 13:55:25 | What are the two components of risk appetite? | what-are-the-two-components-of-risk-appetite |
What are the two components of risk appetite?
Answer:
Risk appetite is determined by two factors:
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| 2020-05-21 13:58:43 | What two labels are missing in the diagram below? | what-two-labels-are-missing-in-the-diagram-below |
What two labels are missing in the diagram below?
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| 2020-05-21 14:38:13 | In auditing, what is meant by ‘inherent risk’? | in-auditing-what-is-meant-by-inherent-risk | In auditing, what is meant by ‘inherent risk’? Answer: Inherent risk: this is the risk that an error is made in the first place before the application of any controls of checks. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:38:52 | What is internal audit? | what-is-internal-audit-2 | What is internal audit? Answer: ‘An independent appraisal activity established within an organisation as a service to it. It is a control which functions by examining and evaluating the adequacy and effectiveness of other controls; a management tool which analyses the effectiveness of all parts of an entity’s operations and management.’ (CIMA’s Management Accounting Official Terminology) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:39:14 | What is external audit? | 571413 | What is external audit? Answer: ‘A periodic examination of the books of account and records of an entity carried out by an independent third party (the auditor), to ensure that they have been properly maintained, are accurate and comply with established concepts, principles, accounting standards, legal requirements and give a true and fair view of the financial state of the entity.’ (CIMA’s Management Accounting Official Terminology) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:39:51 | Who is responsible for establishing procedures to manage risk | who-is-responsible-for-establishing-procedures-to-manage-risk | Who is responsible for establishing procedures to manage risk, overseeing the internal control framework and determine the nature and extent of the principle risks that the company is willing to take in order to achieve its long-term strategic objectives. Answer: The Board | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:40:48 | What is an internal control system? | what-is-an-internal-control-system | What is an internal control system? Answer: ‘The management system of controls, financial and otherwise, established in order to provide reasonable assurance of: (a) effective and efficient operation (b) internal financial control (c) compliance with laws and regulations’ (CIMA Official Terminology, 2005). | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:41:27 | What are the five elements of an internal control system? | what-are-the-five-elements-of-an-internal-control-system |
What are the five elements of an internal control system?
Answer:
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| 2020-05-21 14:42:02 | The UK Corporate Governance Code mentions three board sub-committees | the-uk-corporate-governance-code-mentions-three-board-sub-committees |
The UK Corporate Governance Code mentions three board sub-committees that are entirely (or principally) staffed by non-executive directors.
What are these committees?
Answer:
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| 2020-05-21 14:42:22 | Which of the UK Corporate Governance Code and the USA’s Sarbanes Oxley has the force of law? | which-of-the-uk-corporate-governance-code-and-the-usas-sarbanes-oxley-has-the-force-of-law | Which of the UK Corporate Governance Code and the USA’s Sarbanes Oxley has the force of law? Answer: UKCGC = not in statute. Enforced for listed companies by the stock exchange: comply or explain SA Act = US law. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:42:43 | What are the fie headings of the UK Corporate Governance CODE? | what-are-the-fie-headings-of-the-uk-corporate-governance-code |
What are the fie headings of the UK Corporate Governance CODE?
Answer:
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| 2020-05-21 14:43:08 | What are the five OECD principles of corporate governance? | what-are-the-five-oecd-principles-of-corporate-governance |
What are the five OECD principles of corporate governance?
Answer:
Corporate governance frameworks should:
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| 2020-05-21 14:43:38 | What is ‘corporate governance’? | what-is-corporate-governance | What is ‘corporate governance’? Answer: Corporate governance is a system by which companies are directed and controlled. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:44:06 | What does a coefficient of correlation, r, of 0.5 indicate? | what-does-a-coefficient-of-correlation-r-of-0-5-indicate | What does a coefficient of correlation, r, of 0.5 indicate? Answer: r is Positive, so as one variable increases so does the other. r 2 = coefficient of determination = 0.25. This means that 25% of the variation in one variable can be explained by variation in the other. 75% of the change seems to be for other reasons. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:44:39 | What is the project sensitivity to selling price? | what-is-the-project-sensitivity-to-selling-price |
Present value of a project’s outflows = $100,000.
Present value of the project’s inflows (all from sales) = £120,000
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| 2020-05-21 14:45:25 | What is a risk report? | what-is-a-risk-report | What is a risk report? Answer: UK quoted companies are now required to include risk reports as part of their annual reports. This informs shareholders and others about the organisation’s main risks and what the company is doing about them. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:46:03 | What is scenario planning? | what-is-scenario-planning | What is scenario planning? Answer: Scenario planning looks at all the things that could happen (and there can be many permutations of future events) and from those builds viable scenarios: a number of believable, internally consistent futures. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:46:29 | What is meant by ‘stress testing’ a strategy? | what-is-meant-by-stress-testing-a-strategy | What is meant by ‘stress testing’ a strategy? Answer: A stress test is an assessment of how a system or strategy is likely to function if severe adverse events occur. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:47:17 | What is the difference between gross and net risks? | what-is-the-difference-between-gross-and-net-risks |
What is the difference between gross and net risks?
Answer:
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| 2020-05-21 14:47:46 | What is a risk register? | what-is-a-risk-register | What is a risk register? Answer: It notes identified risks, their probability of occurrence, impact, responses to them and the date by which they should be addressed. The person in charge of dealing with the risk needs to be identified and it needs to be signed off when the risk has been mitigated (if needs be). | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:48:23 | What is assurance mapping? | what-is-assurance-mapping |
What is assurance mapping?
Answer:
The aim of an assurance map is to identify where the safeguards against risks are to be found.
Assurance maps usually identify that an organisation has various lines of defences against risk.
Typically these are:
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| 2020-05-21 14:48:56 | What is risk consolidation? | what-is-risk-consolidation | What is risk consolidation? Answer: This the process of aggregating divisional/subsidiary risks at the corporate level. Some risks can be handled together and be subject to a common approach, or they might even substantially cancel. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:50:57 | What is the expected value of the following project? | what-is-the-expected-value-of-the-following-project |
What is the expected value of the following project?
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| 2020-05-21 14:51:33 | What is ‘value at risk’? | what-is-value-at-risk | What is ‘value at risk’? Answer: Generally it uses normal distribution tables to work out, for example, the minimum value of a portfolio of shares at the end of a period to a 95% probability (or conversely the maximum amount of fall in value to a 95% probability). | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 14:52:06 | If the standard deviation of a portfolio’s value from day to day is $5,000, | if-the-standard-deviation-of-a-portfolios-value-from-day-to-day-is-5000 | If the standard deviation of a portfolio’s value from day to day is $5,000, what is the appropriate standard deviation to use over a 25 day period? ? period = ? day ?n So, the appropriate standard deviation would be $5,000 x ?25 = $25,000. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 15:38:21 | What TARA response should go into each quadrant of the risk map, below? | what-tara-response-should-go-into-each-quadrant-of-the-risk-map-below |
What TARA response should go into each quadrant of the risk map, below?
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| 2020-05-21 15:44:41 | What are the two missing labels in the COSO framework, below? | what-are-the-two-missing-labels-in-the-coso-framework-below |
What are the two missing labels in the COSO framework, below?
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| 2020-05-21 15:49:33 | What should go into each column and row of the table below? | what-should-go-into-each-column-and-row-of-the-table-below |
What should go into each column and row of the table below?
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| 2020-05-21 15:52:38 | What is the AEIOU mnemonic for ways of collecting audit evidence? | what-is-the-aeiou-mnemonic-for-ways-of-collecting-audit-evidence |
What is the AEIOU mnemonic for ways of collecting audit evidence?
Answer:
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| 2020-05-21 15:52:54 | What are the two techniques available in computer auditing? | what-are-the-two-techniques-available-in-computer-auditing |
What are the two techniques available in computer auditing?
Answer:
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| 2020-05-21 15:55:22 | What are the four desirable requirements for an internal audit department? | what-are-the-four-desirable-requirements-for-an-internal-audit-department |
What are the four desirable requirements for an internal audit department?
Answer:
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| 2020-05-21 15:55:39 | What are the two classes of fraud? | what-are-the-two-classes-of-fraud |
What are the two classes of fraud?
Answer:
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| 2020-05-21 15:56:03 | What are the three pre-conditions for fraud? | what-are-the-three-pre-conditions-for-fraud |
What are the three pre-conditions for fraud?
Answer:
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| 2020-05-21 15:56:31 | What are the elements of an anti-fraud policy which lead to fraud deterrence? | what-are-the-elements-of-an-anti-fraud-policy-which-lead-to-fraud-deterrence |
What are the elements of an anti-fraud policy which lead to fraud deterrence?
Answer:
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| 2020-05-21 15:56:55 | What are CIMA’s five fundamental ethical principles? | what-are-cimas-five-fundamental-ethical-principles |
What are CIMA’s five fundamental ethical principles?
Answer:
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| 2020-05-21 15:57:20 | What are LANs and WANs? | what-are-lans-and-wans | What are LANs and WANs? Answer: LAN = local area network WAN = wide area network | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 15:57:43 | Most client-server networks comprise of three tiers or layers. What are these? | most-client-server-networks-comprise-of-three-tiers-or-layers-what-are-these |
Most client-server networks comprise of three tiers or layers. What are these?
Answer:
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| 2020-05-21 15:58:11 | What are VPNs? | what-are-vpns | What are VPNs? Answer: VPN = virtual private network. These allow data to be transmitted securely over the internet between any two locations. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 15:58:30 | What are the three essential steps or elements of security in a virtual private network? | what-are-the-three-essential-steps-or-elements-of-security-in-a-virtual-private-network | What are the three essential steps or elements of security in a virtual private network? Answer: (1) Access control and authentication – this ensures that unauthorized users do not access the system. Typically this will be accomplished through a log-in procedure. (2) Confidentiality – this ensures that data cannot be intercepted and read by a third party whilst being transmitted. This is achieved using encryption. (3) Data integrity – this ensures that the data has not been altered or distorted whilst in transit. To ensure this, the message could have special check digits added to ensure that the data complies with a mathematical rule. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 15:58:47 | What are the four Vs of big data? | what-are-the-four-vs-of-big-data | What are the four Vs of big data? Answer: Velocity Volume Variety [Veracity] | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-21 15:59:15 | What are the eight principles of the European Data Protection Act implements Directive 95/46/EC? | what-are-the-eight-principles-of-the-european-data-protection-act-implements-directive-95-46-ec |
What are the eight principles of the European Data Protection Act implements Directive 95/46/EC?
Answer:
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| 2020-05-22 12:44:08 | The rational model of strategic planning divides the process into three stages | the-rational-model-of-strategic-planning-divides-the-process-into-three-stages | The rational model of strategic planning divides the process into three stages (each comprising several activities). What are the three stages? Answer: Position, choice, action | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-22 12:44:58 | What is an ‘emergent strategy’? | what-is-an-emergent-strategy | What is an ‘emergent strategy’? Answer: These were not part of the original plan and become apparent as time passes and new opportunities or threats have to be dealt with. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-22 12:46:01 | Is the following true or false? Once a strategic plan has been carefully devised it should be strictly followed. | is-the-following-true-or-false | Is the following true or false? Once a strategic plan has been carefully devised it should be strictly followed. Answer: False. No long-term plan is going to be correct and events will intervene. The plan must remain flexible. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-22 12:46:23 | What is logical incrementalism? | what-is-logical-incrementalism | What is logical incrementalism? Answer: The idea that strategy should consist of small extensions of past policies. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-22 12:46:51 | What are four potential advantages of strategic planning? | what-are-four-potential-advantages-of-strategic-planning |
What are four potential advantages of strategic planning?
Answer:
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| 2020-05-22 12:47:17 | What are three potential disadvantages of strategic planning? | what-are-three-potential-disadvantages-of-strategic-planning |
What are three potential disadvantages of strategic planning?
Answer:
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| 2020-05-22 12:48:01 | What is an organisation’s mission? | what-is-an-organisations-mission | What is an organisation’s mission? Answer: An organisation’s mission is what it perceives its purpose to be. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-22 12:48:21 | What are the three suggested components of a mission statement? | what-are-the-three-suggested-components-of-a-mission-statement |
What are the three suggested components of a mission statement?
Answer:
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| 2020-05-22 12:48:41 | What are the three classifications of stakeholders? | what-are-the-three-classifications-of-stakeholders |
What are the three classifications of stakeholders?
Answer:
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| 2020-05-22 12:49:00 | What are the two axes of Mendelow’s matrix? | what-are-the-two-axes-of-mendelows-matrix | What are the two axes of Mendelow’s matrix? Answer: Interest and power | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-22 12:50:24 | What are the two missing labels missing in the diagram below? | what-are-the-two-missing-labels-missing-in-the-diagram-below |
What are the missing labels on this diagram (Mendelow’s Matrix)?
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| 2020-05-22 12:51:47 | What are the four categories of drivers for change? | what-are-the-four-categories-of-drivers-for-change |
What are the four categories of drivers for change?
Answer:
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| 2020-05-28 16:42:14 | What is PESTEL? | what-is-pestel | What is PESTEL? Answer: A list of potential environmental influences: political, economic, social, technological, environmental/ecological, legal. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:42:39 | What is industry convergence? | what-is-industry-convergence | What is industry convergence? Answer: Industry convergence is when industries, which had historically been separate, come together so that more diverse others products or services are offered by the same supplier. Examples can be airlines which now offer car hire, hotels, and insurance. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:42:57 | What is LoNGPEST? | what-is-longpest | What is LoNGPEST? Answer: The application of a PEST(EL) analysis at the local, national and global levels. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:43:15 | What does Porter’s diamond attempt to explain? | what-does-porters-diamond-attempt-to-explain | What does Porter’s diamond attempt to explain? Answer: Porter’s diamond puts forward and explanation as to why certain countries excel at certain activities eg Germany has an excellent reputation for car production. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:43:36 | What are the four elements of Porter’s diamond? | what-are-the-four-elements-of-porters-diamond |
What are the four elements of Porter’s diamond?
Answer:
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| 2020-05-28 16:44:12 | What does the Porter’s 5 Forces model attempt to analyse? | what-does-the-porters-5-forces-model-attempt-to-analyse | What does the Porter’s 5 Forces model attempt to analyse? Answer: The 5 forces model looks at industry attractiveness ie how easy a business will find it to make reasonable profits | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:44:31 | What are the five elements of the Porter five forces model? | what-are-the-five-elements-of-the-porter-five-forces-model |
What are the five elements of the Porter five forces model?
Answer:
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| 2020-05-28 16:44:52 | What do the following statements define? | what-do-the-following-statements-define | What do the following statements define? “…. involves understanding and analysing businesses which compete directly or indirectly with your business in at least one market, product category or service.” “Identification and quantification of the relative strengths and weaknesses (compared with competitors or potential competitors), which could be of significance in the development of a successful competitive strategy.” Answer: Competitor analysis | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:45:34 | Kotler identified four types of competitor. What are these? | kotler-identified-four-types-of-competitor-what-are-these |
Kotler identified four types of competitor. What are these?
Answer:
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| 2020-05-28 16:47:20 | What are the two missing labels on diagram below (Porter’s approach to competitor analysis)? | what-are-the-two-missing-labels-on-diagram-below-porters-approach-to-competitor-analysis |
What are the two missing labels on diagram below (Porter’s approach to competitor analysis)?
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| 2020-05-28 16:48:12 | What is the 4Cs mnemonic to the processes of competitor analysis? | what-is-the-4cs-mnemonic-to-the-processes-of-competitor-analysis | What is the 4Cs mnemonic to the processes of competitor analysis? Answer: • Collecting information • Converting the information to intelligence • Communicating the intelligence to those who need it • Countering adverse competitor moves | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:48:43 | What are resources and competences? | what-are-resources-and-competences | What are resources and competences? Answer: Resources = things the company y has, like factories, patents, skilled people. Competences = how the resources are used. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:49:04 | Capabilities are made up of which two items? | capabilities-are-made-up-of-which-two-items | Capabilities are made up of which two items? Answer: Resources and competences | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:49:25 | What are threshold and additional capabilities? | what-are-threshold-and-additional-capabilities | What are threshold and additional capabilities? Answer: Threshold capabilities are the minimum capabilities needed for the organisation to exist at all so that the company just survives. Additional capabilities are then the extra capabilities which give the organisation competitive advantage ie it has strategic capability. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:49:53 | What is the difference between resource-based and position-based strategies? | what-is-the-difference-between-resource-based-and-position-based-strategies | What is the difference between resource-based and position-based strategies? Answer: Position-based = an organisation should adapt its position to suit each environment it finds itself in. Resource-based = a realisation that an organisation’s resources and competences are often extremely valuable and they were the source of the organisation’s success. Therefore, organisations should not stray too far from their resources and competences but should try to use them in other ways if the environment changes. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:51:25 | Which two labels are missing in the product life cycle diagram, below? | which-two-labels-are-missing-in-the-product-life-cycle-diagram-below |
Which two labels are missing in the product life cycle diagram, below?
Answer:
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| 2020-05-28 16:51:49 | What are the primary activities of Porter’s value chain? | what-are-the-primary-activities-of-porters-value-chain |
What are the primary activities of Porter’s value chain?
Answer:
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| 2020-05-28 16:52:10 | What are the support (or secondary) activities of Porter’s value chain? | what-are-the-support-or-secondary-activities-of-porters-value-chain |
What are the support (or secondary) activities of Porter’s value chain?
Answer:
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| 2020-05-28 16:52:48 | What is the difference between push and pull models of supply chains? | what-is-the-difference-between-push-and-pull-models-of-supply-chains | What is the difference between push and pull models of supply chains? Answer: Push: make goods for inventory usually according to historical demand. Pull: make goods to order. Sales orders pull production through the manufacturing process. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:53:06 | In SWOT analysis, which elements are internal and which external? | in-swot-analysis-which-elements-are-internal-and-which-external |
In SWOT analysis, which elements are internal and which external?
Answer:
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| 2020-05-28 16:53:30 | What is meant by SMART target or objective setting? | what-is-meant-by-smart-target-or-objective-setting |
What is meant by SMART target or objective setting?
Answer:
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| 2020-05-28 16:53:48 | What is a CSF? | what-is-a-csf |
What is a CSF?
Answer:
CSF = critical success factor:
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| 2020-05-28 16:54:07 | What is a KPI? | what-is-a-kpi | What is a KPI? Answer: KPI = key performance indicator. KPIs measure the extent to which CSFs are being achieved | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:54:37 | What are the four ways in which KPIs can be classified? | what-are-the-four-ways-in-which-kpis-can-be-classified |
What are the four ways in which KPIs can be classified?
Answer:
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| 2020-05-28 16:55:03 | What are three types of benchmark? | what-are-three-types-of-benchmark |
What are three types of benchmark?
Answer:
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| 2020-05-28 16:55:29 | What are the three aims of customer relationship management? | what-are-the-three-aims-of-customer-relationship-management |
What are the three aims of customer relationship management?
Answer:
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| 2020-05-28 16:55:48 | What is customer profitability analysis? | what-is-customer-profitability-analysis | What is customer profitability analysis? Answer: The identification of the profits made from each customer or class of customer. Profitable customers should be looked after carefully. Unprofitable ones should be discarded, persuaded to change their buying habits or have the prices charged to them raised. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:57:07 | In the customer portfolio analysis cycle, what is Step 3 | in-the-customer-portfolio-analysis-cycle-what-is-step-3 |
In the customer portfolio analysis cycle, what is Step 3
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| 2020-05-28 16:57:35 | What is ‘hyperpersonalisation’? | what-is-hyperpersonalisation | What is ‘hyperpersonalisation’? Answer: By recording web-site visits, each customer’s experience of the web-site and the company’s sales offers can be very precisely to their interests and buying habits. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:57:52 | What are the three generic strategies? | what-are-the-three-generic-strategies |
What are the three generic strategies?
Answer:
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| 2020-05-28 16:58:59 | What are the descriptions three columns in terms of generic strategies or failure to achieve one? | what-are-the-descriptions-three-columns-in-terms-of-generic-strategies-or-failure-to-achieve-one |
What are the descriptions three columns in terms of generic strategies or failure to achieve one?
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| 2020-05-28 16:59:28 | In Ansoff’s Matrix, what is a company doing if it goes for new products and new markets simultaneously? | in-ansoffs-matrix-what-is-a-company-doing-if-it-goes-for-new-products-and-new-markets-simultaneously | In Ansoff’s Matrix, what is a company doing if it goes for new products and new markets simultaneously? Answer: It is diversifying, either related or unrelated. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 16:59:55 | What are the four options for increasing profits if a company stays with current products and current markets? | what-are-the-four-options-for-increasing-profits-if-a-company-stays-with-current-products-and-current-markets |
What are the four options for increasing profits if a company stays with current products and current markets?
Answer:
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| 2020-05-28 17:00:30 | What are the three headings under which a strategy can be evaluated? | what-are-the-three-headings-under-which-a-strategy-can-be-evaluated |
What are the three headings under which a strategy can be evaluated?
Answer:
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| 2020-05-28 17:01:49 | What are backward and forward integration? | what-are-backward-and-forward-integration | What are backward and forward integration? Answer: Backward integration = taking over (or establishing) a supplier Forward integration = taking over (or establishing) a distribution or sales operation. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-28 17:02:18 | What are the two axes on a Boston Consulting Group matrix? | what-are-the-two-axes-on-a-boston-consulting-group-matrix |
What are the two axes on a Boston Consulting Group matrix?
Answer:
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| 2020-05-28 17:03:47 | What headings should go into the blank boxes? | what-headings-should-go-into-the-blank-boxes |
What headings should go into the blank boxes?
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| 2020-05-28 17:04:13 | Apart from organic growth, what are four ways in which an organisation can expand? | apart-from-organic-growth-what-are-four-ways-in-which-an-organisation-can-expand |
Apart from organic growth, what are four ways in which an organisation can expand?
Answer:
Any four of:
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| 2020-05-30 11:40:32 | What are the four elements of Kaplan and Norton’s balanced scorecard? | what-are-the-four-elements-of-kaplan-and-nortons-balanced-scorecard |
What are the four elements of Kaplan and Norton’s balanced scorecard?
Answer:
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| 2020-05-30 11:40:58 | What is the ‘Delphi technique’? | what-is-the-delphi-technique | What is the ‘Delphi technique’? Answer: The Delphi Technique is an iterative technique to predict future events in which experts give their opinions, which are then summarised and fed back to the same experts who are encouraged to look critically at the outcomes and, where necessary, modify their opinions. The experts answer questionnaires in two or more rounds. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:41:37 | What is ‘game theory’? | what-is-game-theory | What is ‘game theory’? Answer: Game theory uses number of players each of who can make their own specific choices in relation to a well-defined scenario. Choices made by one player affect the rewards received by the other players; the other players know this and will act accordingly. Therefore, when making a decision or choosing a strategy firms must take into account the potential choices and payoffs of others and vice versa. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:42:05 | What do each of the characters represent? | what-do-each-of-the-characters-represent |
Linear regression of volume of production v coats will produce a line of the general form:
y = ax +b
What do each of the characters represent?
Answer:
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| 2020-05-30 11:42:25 | What value must be calculated to test the strength of the relationship between two variables? | what-value-must-be-calculated-to-test-the-strength-of-the-relationship-between-two-variables | What value must be calculated to test the strength of the relationship between two variables? Answer: r, the coefficient of correlation or r 2 , the coefficient of determination. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:42:57 | What are the four components of a time series and which two are normally estimated in time series analysis? | what-are-the-four-components-of-a-time-series-and-which-two-are-normally-estimated-in-time-series-analysis |
What are the four components of a time series and which two are normally estimated in time series analysis?
Answer:
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| 2020-05-30 11:43:25 | What is scenario planning? | what-is-scenario-planning-2 | What is scenario planning? Answer: Scenario planning is “building plausible views about how the business environment of an organisation might develop in the future….based on sets of key drivers about which there is a high degree of uncertainty”. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:43:43 | What are the three types of real option and give an example of each? | what-are-the-three-types-of-real-option-and-give-an-example-of-each | What are the three types of real option and give an example of each? Answer: Option to delay. Eg take a purchase option on a piece of land so that it can be bought in the future if the market looks good. Option to follow on. Eg option to extend a lease or distribution agreement. Option to abandon. Eg a break-clause in a lease | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:43:59 | What four elements need to be considered under the POPIT model of business change? | what-four-elements-need-to-be-considered-under-the-popit-model-of-business-change |
What four elements need to be considered under the POPIT model of business change?
Answer:
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| 2020-05-30 11:44:15 | In any change process or project what are the four types of feasibility that should be considered? | in-any-change-process-or-project-what-are-the-four-types-of-feasibility-that-should-be-considered |
In any change process or project what are the four types of feasibility that should be considered?
Answer:
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| 2020-05-30 11:44:32 | What are the elements of the cultural web? | what-are-the-elements-of-the-cultural-web |
What are the elements of the cultural web?
Answer:
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| 2020-05-30 11:45:02 | How did Handy classify cultures? | how-did-handy-classify-cultures |
How did Handy classify cultures?
Answer:
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| 2020-05-30 11:45:33 | What are the 7Ss of the McKinsey 7S model? | what-are-the-7ss-of-the-mckinsey-7s-model |
What are the 7Ss of the McKinsey 7S model?
Answer:
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| 2020-05-30 11:46:48 | What labels are missing from the two blank quadrants below? | what-labels-are-missing-from-the-two-blank-quadrants-below |
What labels are missing from the two blank quadrants below?
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| 2020-05-30 11:47:18 | What are the titles of the two groups of variables in the Balogun and Hope Hailey model for change? | what-are-the-titles-of-the-two-groups-of-variables-in-the-balogun-and-hope-hailey-model-for-change | What are the titles of the two groups of variables in the Balogun and Hope Hailey model for change? Answer: The context of change (time, power, diversity, scope, capability, capacity, readiness, preservation) Design choices (change path, change start point, change style, change interventions, change roles) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:47:36 | What is Lewin’s force field analysis? | what-is-lewins-force-field-analysis | What is Lewin’s force field analysis? Answer: Forces for change are resisted by opposing forces. Rather than go ‘head-to-head’ aim to reduce the resisting forces. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:47:52 | What are five change styles? | what-are-five-change-styles |
What are five change styles?
Answer:
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| 2020-05-30 11:48:09 | What are CAD and CAM | what-are-cad-and-cam | What are CAD and CAM Answer: Computer aided design and computer aided manufacturing | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:48:38 | Describe a LAN and a WAN | describe-a-lan-and-a-wan | Describe a LAN and a WAN Answer: Local area networks (LANs): operate over a restricted area such as an office, hospital or university campus. There is usually a special machine called a file server where shared information is held and there might be a print server which allows a printer to be shared between many users. Wide area networks (WANs): operate over national and international distances, linking users in different cities and countries. They rely on public networks to transmit information from one local area network to another. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:49:20 | Cloud technology primarily uses data and programs stored locally. | is-the-following-statement-true-or-false | Is the following statement true or false? Cloud technology primarily uses data and programs stored locally. Answer: False: cloud-based systems store data and programs remotely | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:50:23 | What is intranet? | what-is-intranet | What is intranet? Answer: Intranet = internal internet which access and presents data through a browser such as Chrome or Internet Explorer | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:51:01 | What is an extranet? | what-is-an-extranet-2 | What is an extranet? Answer: Extranet = an intranet which can also access external data and other intranets. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:51:19 | What are the four Vs of big data? | what-are-the-four-vs-of-big-data-2 |
What are the four Vs of big data?
Answer:
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| 2020-05-30 11:51:37 | What is blockchain technology? | what-is-blockchain-technology | What is blockchain technology? Answer: Blockchain technology allows data to be added to a set of records, but once added it cannot be changed without detection. In blockchain technology information is held simultaneously in many computers and the copies of the information are continually compared and validated. This is known as a distributed ledger and means that the blockchain is secure from attack. If one computer is damaged, there are many copies still left on the network. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:51:59 | What are a DSS and an EIS? | what-are-a-dss-and-an-eis | What are a DSS and an EIS? Answer: DSS = decision support system. Eg a financial model on a spreadsheet. EIS = Used by top management to help with decision-making. Characteristics include access to external information and a flexible interface. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:52:21 | What is additive manufacturing? | what-is-additive-manufacturing | What is additive manufacturing? Answer: Additive manufacturing (or 3-D printing) involves adding material layer by layer to gradually built up the required shape of a component. Good for prototypes, complex shapes and short production runs. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:52:49 | What is artificial intelligence? | what-is-artificial-intelligence | What is artificial intelligence? Answer: Artificial intelligence (AI) is a general term that uses to a number of technologies to make machines ‘smart’. It can use techniques such as machine learning, image recognition, speech recognition and deep learning, which uses networks capable of learning unsupervised from data that is unstructured. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:53:08 | What is the ‘internet of things’? | what-is-the-internet-of-things | What is the ‘internet of things’? Answer: This s the concept that many different devices such as room thermometers and motion sensors are connected to the internet and, potentially can then ‘talk’ to each other. Eg tracking the movement of individual components and products through production. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:53:27 | What are the four ethical stances? | what-are-the-four-ethical-stances |
What are the four ethical stances?
Answer:
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| 2020-05-30 11:53:51 | What is corporate social responsibility? | what-is-corporate-social-responsibility-2 | What is corporate social responsibility? Answer: ‘The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large’. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-05-30 11:54:08 | What is corporate governance? | what-is-corporate-governance-2 | What is corporate governance? Answer: Corporate governance is a system by which companies are directed and controlled. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:00:23 | What does the following describe: | what-does-the-following-describe | What does the following describe: “An economic community supported by a foundation of interacting organisations and individuals - the organisms of the business world.” Answer: A business ecosystem | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:02:41 | What are these? | what-are-these | Moore suggested three concentric elements of a business ecosystem. What are these? Answer: Core business, extended enterprise | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:03:55 | What is the PESTEL framework? | what-is-the-pestel-framework |
What is the PESTEL framework?
Answer:
A framework for listing macro-environmental influences:
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| 2020-06-03 14:44:30 | What are the elements of the Porter 5 Forces model? | what-are-the-elements-of-the-porter-5-forces-model |
What are the elements of the Porter 5 Forces model?
Answer:
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| 2020-06-03 14:44:53 | Sustainability, self-governance and evolution/adaption are important qualities of what? | sustainability-self-governance-and-evolution-adaption-are-important-qualities-of-what | Sustainability, self-governance and evolution/adaption are important qualities of what? Answer: An ecosystem | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:45:18 | What is a value proposition? | what-is-a-value-proposition |
What is a value proposition?
Answer:
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| 2020-06-03 14:45:58 | What is a stakeholder? | what-is-a-stakeholder-4 | What is a stakeholder? Answer: Any party affected by (or affecting) an organisation. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:46:29 | Stakeholders can be prioritised on the basis of four qualities. What are these? | stakeholders-can-be-prioritised-on-the-basis-of-four-qualities-what-are-these |
Stakeholders can be prioritised on the basis of four qualities. What are these?
Answer:
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| 2020-06-03 14:46:48 | What are they? | what-are-they |
There are three main issues to be considered when capturing value. These can be referred to as three models.
What are they?
Answer:
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| 2020-06-03 14:47:07 | What is strategic drift? | what-is-strategic-drift | What is strategic drift? Answer: Strategic drift occurs when the strategy of a business is no longer relevant to the external environment it faces. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:47:24 | What does VUCA mean in relation to an environment? | what-does-vuca-mean-in-relation-to-an-environment |
What does VUCA mean in relation to an environment?
Answer:
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| 2020-06-03 14:47:47 | What are the five ways in which an organisation can approach self-disruption? | what-are-the-five-ways-in-which-an-organisation-can-approach-self-disruption |
What are the five ways in which an organisation can approach self-disruption?
Answer:
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| 2020-06-03 14:48:24 | There are five digital operating models. What are these? | there-are-five-digital-operating-models-what-are-these |
There are five digital operating models. What are these?
Answer:
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| 2020-06-03 14:48:59 | How can management be defined? | how-can-management-be-defined |
How can management be defined?
Answer:
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| 2020-06-03 14:49:17 | What are Fayol’s five management functions? | what-are-fayols-five-management-functions |
What are Fayol’s five management functions?
Answer:
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| 2020-06-03 14:49:34 | Who was the first proponent of scientific management? | who-was-the-first-proponent-of-scientific-management | Who was the first proponent of scientific management? Answer: Frederick Taylor | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:49:50 | Who was the first proponent of the human relations school of management? | who-was-the-first-proponent-of-the-human-relations-school-of-management | Who was the first proponent of the human relations school of management? Answer: Elton Mayo | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:50:11 | What are Drucker’s five categories of management activity? | what-are-druckers-five-categories-of-management-activity |
What are Drucker’s five categories of management activity?
Answer:
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| 2020-06-03 14:50:33 | What are Mintzberg’s three management roles? | what-are-mintzbergs-three-management-roles |
What are Mintzberg’s three management roles?
Answer:
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| 2020-06-03 14:50:53 | The Ashridge model proposes four leadership styles. Going from autocratic to democratic, what are these styles? | the-ashridge-model-proposes-four-leadership-styles-going-from-autocratic-to-democratic-what-are-these-styles |
The Ashridge model proposes four leadership styles. Going from autocratic to democratic, what are these styles?
Answer:
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| 2020-06-03 14:51:13 | What are the two axes on Blake and Mouton’s managerial grid? | what-are-the-two-axes-on-blake-and-moutons-managerial-grid |
What are the two axes on Blake and Mouton’s managerial grid?
Answer:
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| 2020-06-03 14:54:52 | What are the two missing descriptors of management style in the diagram below? | 572697 |
What are the two missing descriptors of management style in the diagram below?
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| 2020-06-03 14:57:23 | What are the three elements of Adair’s action-centred leadership theory? | what-are-the-three-elements-of-adairs-action-centred-leadership-theory |
What are the three elements of Adair’s action-centred leadership theory?
Answer:
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| 2020-06-03 14:57:45 | What are the four variables of Handy’s best fit theory? | what-are-the-four-variables-of-handys-best-fit-theory |
What are the four variables of Handy’s best fit theory?
Answer:
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| 2020-06-03 14:58:50 | What two variables did Fiedler suggest that leadership effectiveness depended on? | what-two-variables-did-fiedler-suggest-that-leadership-effectiveness-depended-on |
What two variables did Fiedler suggest that leadership effectiveness depended on?
Answer:
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| 2020-06-03 14:59:10 | What is meant by the term ‘power’ in management? | what-is-meant-by-the-term-power-in-management |
What is meant by the term ‘power’ in management?
Answer:
Power is the ability to influence people or events. It can arise from:
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| 2020-06-03 14:59:27 | What is meant by ‘authority’ in management? | what-is-meant-by-authority-in-management | What is meant by ‘authority’ in management? Answer: Authority is the right to exercise power. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 14:59:44 | What is responsibility? | what-is-responsibility | What is responsibility? Answer: Responsibility = accountability = ‘the buck stops here’ | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:00:03 | What is delegation? | what-is-delegation | What is delegation? Answer: Delegation is the transfer of authority. It is not the transfer of responsibility. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:00:59 | What are three approaches to training? | what-are-three-approaches-to-training |
What are three approaches to training?
Answer:
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| 2020-06-03 15:01:22 | What is a 3600 appraisal? | what-is-a-3600-appraisal | What is a 360 0 appraisal? Answer: An employee is appraised by his/her superior and by colleagues. The employee also appraises the superior. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:01:40 | What are Lockett’s 6 potential barriers to effective performance appraisal? | what-are-locketts-6-potential-barriers-to-effective-performance-appraisal |
What are Lockett’s 6 potential barriers to effective performance appraisal?
Answer:
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| 2020-06-03 15:02:15 | What are the three types of discrimination? | what-are-the-three-types-of-discrimination |
What are the three types of discrimination?
Answer:
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| 2020-06-03 15:02:31 | What type of behaviour justifies immediate dismissal? | what-type-of-behaviour-justifies-immediate-dismissal | What type of behaviour justifies immediate dismissal? Answer: Gross misconduct | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:02:50 | What is a grievance procedure? | what-is-a-grievance-procedure | What is a grievance procedure? Answer: A means of dispute resolution that can be used by a company to address complaints by employees, suppliers, customers, and/or competitors. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:04:21 | Health and safety legislation imposes duties on employers but not employees. | health-and-safety-legislation-imposes-duties-on-employers-but-not-employees | Is the following statement true or false? Health and safety legislation imposes duties on employers but not employees. Answer: False: employees have responsibilities too. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:04:38 | What are the three methods in which employment can be ended? | what-are-the-three-methods-in-which-employment-can-be-ended |
What are the three methods in which employment can be ended?
Answer:
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| 2020-06-03 15:04:54 | What are the three remedies for unfair dismissal? | what-are-the-three-remedies-for-unfair-dismissal-2 |
What are the three remedies for unfair dismissal?
Answer:
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| 2020-06-03 15:05:11 | Who devised the Theory X and Theory Y approaches to management? | who-devised-the-theory-x-and-theory-y-approaches-to-management | Who devised the Theory X and Theory Y approaches to management? Answer: McGregor | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:05:42 | What are the characteristics of Theory X and Theory Y managers? | what-are-the-characteristics-of-theory-x-and-theory-y-managers | What are the characteristics of Theory X and Theory Y managers? Answer: Theory X: strict; does not trust employees; watches employees very carefully. Theory Y: believes employees want to do well and that they are enthusiastic. A much higher level of trust between manager and staff. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:06:21 | What are intrinsic and extrinsic rewards? | what-are-intrinsic-and-extrinsic-rewards |
What are intrinsic and extrinsic rewards?
Answer:
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| 2020-06-03 15:06:39 | What is job enrichment? | what-is-job-enrichment | What is job enrichment? Answer: Job enrichment is a vertical change. It gives people more responsibility and more challenge in their job. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:06:59 | What is meant by SMART target or objective setting? | what-is-meant-by-smart-target-or-objective-setting-2 |
What is meant by SMART target or objective setting?
Answer:
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| 2020-06-03 15:07:20 | What is meant by ‘management by objectives’? | what-is-meant-by-management-by-objectives | What is meant by ‘management by objectives’? Answer: Employees’ departments’ objectives are agreed and set. Then management takes a relatively hands-off approach thus allowing employees to decide how best to meet the objectives. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:07:38 | What are the elements of the cultural web? | what-are-the-elements-of-the-cultural-web-2 |
What are the elements of the cultural web?
Answer:
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| 2020-06-03 15:07:55 | How did Handy classify cultures? | how-did-handy-classify-cultures-2 |
How did Handy classify cultures?
Answer:
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| 2020-06-03 15:08:13 | What are Schein’s three levels of culture? | what-are-scheins-three-levels-of-culture-2 |
What are Schein’s three levels of culture?
Answer:
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| 2020-06-03 15:08:49 | According to Handy, what are the characteristics of a group? | according-to-handy-what-are-the-characteristics-of-a-group |
According to Handy, what are the characteristics of a group?
Answer:
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| 2020-06-03 15:09:16 | In Belbin’s classification of team roles | in-belbins-classification-of-team-roles | In Belbin’s classification of team roles, what is the title of a person who is painstaking, conscientious, careful, looks for errors and is keen on completing tasks within the deadline? Answer: A completer/finisher | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:09:54 | In Belbin’s classification of team roles, what is the title of a person who is rather unusual and unorthodox | in-belbins-classification-of-team-roles-what-is-the-title-of-a-person-who-is-rather-unusual-and-unorthodox | In Belbin’s classification of team roles, what is the title of a person who is rather unusual and unorthodox and who is creative, imaginative, and who is deliberately put into the team to ginger it up? Answer: A plant | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:10:40 | What are Tuckman’s stages of team development? | what-are-tuckmans-stages-of-team-development |
What are Tuckman’s stages of team development?
Answer:
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| 2020-06-03 15:11:34 | Which terms are missing from the communication pathway diagram, below? | which-terms-are-missing-from-the-communication-pathway-diagram-below |
Which terms are missing from the communication pathway diagram, below?
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| 2020-06-03 15:30:01 | What are six potential barriers to communication? | what-are-six-potential-barriers-to-communication |
What are six potential barriers to communication?
Answer:
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| 2020-06-03 15:30:25 | A bargaining process between two or more parties, each with their own objectives trying to find common ground | a-bargaining-process-between-two-or-more-parties-each-with-their-own-objectives-trying-to-find-common-ground | What does the following define? “A bargaining process between two or more parties, each with their own objectives trying to find common ground that will be the basis of an agreement.” Answer: Negotiation | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:30:42 | What are the two axes on the Thomas-Kilmann Conflict Mode Instrument? | what-are-the-two-axes-on-the-thomas-kilmann-conflict-mode-instrument |
What are the two axes on the Thomas-Kilmann Conflict Mode Instrument?
Answer:
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| 2020-06-03 15:31:24 | What are the missing descriptors in the following TKI diagram? | what-are-the-missing-descriptors-in-the-following-tki-diagram |
What are the missing descriptors in the following TKI diagram?
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| 2020-06-03 15:32:00 | What are four typical characteristics of projects and which can contribute to their risk? | what-are-four-typical-characteristics-of-projects-and-which-can-contribute-to-their-risk |
What are four typical characteristics of projects and which can contribute to their risk?
Answer:
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| 2020-06-03 15:32:31 | What are the four responses to risk (TARA)? | what-are-the-four-responses-to-risk-tara |
What are the four responses to risk (TARA)?
Answer:
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| 2020-06-03 15:32:48 | What are the four types of feasibility that should be considered for any project? | what-are-the-four-types-of-feasibility-that-should-be-considered-for-any-project |
What are the four types of feasibility that should be considered for any project?
Answer:
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| 2020-06-03 15:33:07 | Ward and Daniels identified four classes of benefits that can arise from projects. What are these? | ward-and-daniels-identified-four-classes-of-benefits-that-can-arise-from-projects-what-are-these |
Ward and Daniels identified four classes of benefits that can arise from projects. What are these?
Answer:
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| 2020-06-03 15:33:24 | What is meant by the ‘scope’ of a project? | what-is-meant-by-the-scope-of-a-project | What is meant by the ‘scope’ of a project? Answer: This is what the project will do and accomplish. What are its deliverables? Scope should be decided in detail before projects are started. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:33:41 | What is a project work breakdown structure? | what-is-a-project-work-breakdown-structure |
What is a project work breakdown structure?
Answer:
It breaks down a large project into separate tasks and for each task defines:
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| 2020-06-03 15:34:26 | What is the critical path length? | what-is-the-critical-path-length | A project network diagram shows that there are three ways through a project. Details are: Pathway 1 Duration = 22 weeks Pathway 2 Duration = 25 weeks Pathway 3 Duration = 21 weeks What is the critical path length? Answer: 25 weeks. The critical path is the longest way through a pathway. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:34:59 | What is the activity expected time used in the PERT approach? | what-is-the-activity-expected-time-used-in-the-pert-approach | Project durations are subject to uncertainty. In terms of the optimistic time o, the most likely time m and the pessimistic time p. What is the activity expected time used in the PERT approach? Answer: The expected time is: (o + 4m + p)/6 | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 15:35:19 | What are the two types of review that should be carried out after a project is completed? | what-are-the-two-types-of-review-that-should-be-carried-out-after-a-project-is-completed |
What are the two types of review that should be carried out after a project is completed?
Answer:
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| 2020-06-03 15:35:36 | What is PRINCE2? | what-is-prince2 | What is PRINCE2? Answer: Projects IN Controlled Environments 2. This is a project management methodology. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-03 18:21:24 | What is a ‘mindset’? | what-is-a-mindset | What is a ‘mindset’? Answer: A mindset is an established set of attitudes and assumptions that is held by someone. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:13:57 | What is a ‘digital mindset’ in respect of accountants? | what-is-a-digital-mindset-in-respect-of-accountants | What is a ‘digital mindset’ in respect of accountants? Answer: A digital mindset is simply one where accountants are continually aware of and alert to how digital technology will affect both them and the organisations they work for. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:15:24 | McKinsey, a firm of management consultants, in their July 2016 quarterly bulletin have suggested that: | mckinsey-a-firm-of-management-consultants-in-their-july-2016-quarterly-bulletin-have-suggested-that |
McKinsey, a firm of management consultants, in their July 2016 quarterly bulletin have suggested that:
Applying expertise, data collection, data processing, managing others and stakeholder interactions are accountants’ functions that are capable of automation.
Arrange these in descending order of potential for automation.
Answer:
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| 2020-06-11 15:16:02 | CGMA’s briefing paper, “Changing competencies and mindsets”, | cgmas-briefing-paper-changing-competencies-and-mindsets |
CGMA’s briefing paper, “Changing competencies and mindsets”, suggests that accountants will require four sets of skills.
What are these?
Answer:
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| 2020-06-11 15:16:25 | The original triangle shaped accounting function hierarchy has progressed through two other shapes. What are these? | the-original-triangle-shaped-accounting-function-hierarchy-has-progressed-through-two-other-shapes-what-are-these |
The original triangle shaped accounting function hierarchy has progressed through two other shapes. What are these?
Answer:
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| 2020-06-11 15:16:46 | What are the four levels of the hexagonal structure of the finance function? | what-are-the-four-levels-of-the-hexagonal-structure-of-the-finance-function |
What are the four levels of the hexagonal structure of the finance function?
Answer:
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| 2020-06-11 15:17:04 | Why are levels three and four of the hexagonal structure of the finance function smaller than in the traditional triangular structure? | why-are-levels-three-and-four-of-the-hexagonal-structure-of-the-finance-function-smaller-than-in-the-traditional-triangular-structure | Why are levels three and four of the hexagonal structure of the finance function smaller than in the traditional triangular structure? Answer: The tasks in these levels are either now substantially automated or soon will be so they require fewer people. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:17:39 | Which component of the finance function carries out tasks such the following? | which-component-of-the-finance-function-carries-out-tasks-such-the-following |
Which component of the finance function carries out tasks such the following?
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| 2020-06-11 15:18:06 | What finance function does the following define? | what-finance-function-does-the-following-define | What finance function does the following define? “..an independent, objective assurance and consulting activity designed to add value and improve an organisation's operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.” Answer: Internal audit | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:18:30 | What are the three elements of managing errors and their occurrence in an accounting system? | what-are-the-three-elements-of-managing-errors | What are the three elements of managing errors and their occurrence in an accounting system? Answer: Prevention, detection and correction. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:19:24 | Items of expense reduce profits whilst capital expenditure does not. | items-of-expense-reduce-profits-whilst-capital-expenditure-does-not | Items of expense reduce profits whilst capital expenditure does not. An accountant could come under pressure to deal with expenditure incorrectly to boost profits (ie to treat expenses as capital expenditure). This is an example of what? Answer: A conflict of interest. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:19:46 | What are the four industrial revolutions? | what-are-the-four-industrial-revolutions |
What are the four industrial revolutions?
Answer:
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| 2020-06-11 15:20:42 | What are the two types of knowledge? | what-are-the-two-types-of-knowledge |
What are the two types of knowledge?
Answer:
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| 2020-06-11 15:21:00 | What is the difference between data and information? | what-is-the-difference-between-data-and-information-2 | What is the difference between data and information? Answer: Data is raw fact. Information = data with meaning eg through summary, statistical analysis, presentation or the highlighting of significant items. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:21:14 | What are the ACCURATE elements of good information? | what-are-the-accurate-elements-of-good-information |
What are the ACCURATE elements of good information?
Answer:
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| 2020-06-11 15:21:38 | Which level of an organisation (operational, tactical or top management) | which-level-of-an-organisation-operational-tactical-or-top-management | Which level of an organisation (operational, tactical or top management) has the greatest need for external and forward-looking information? Answer: Top management | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:22:26 | Describe a LAN | describe-a-lan-2 | Describe a LAN Answer: Local area networks (LANs): operate over a restricted area such as an office, hospital or university campus. There is usually a special machine called a file server where shared information is held and there might be a print server which allows a printer to be shared between many users. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:22:52 | Describe a WAN | describe-a-wan-2 | Describe a WAN Answer: Wide area networks (WANs): operate over national and international distances, linking users in different cities and countries. They rely on public networks to transmit information from one local area network to another. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:23:20 | Which of the following primarily use mobile phone technology? | which-of-the-following-primarily-use-mobile-phone-technology |
Which of the following primarily use mobile phone technology?
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| 2020-06-11 15:23:45 | Cloud technology primarily uses data and programs stored locally. | cloud-technology-primarily-uses-data-and-programs-stored-locally | Is the following statement true or false? Cloud technology primarily uses data and programs stored locally. False: cloud-based systems store data and programs remotely | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:24:13 | What is an intranet? | what-is-an-intranet-2 | What is an intranet? Answer: Intranet = internal internet which access and presents data through a browser such as Chrome or Internet Explorer | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:25:00 | What is an extranet? | what-is-an-extranet-3 | What is an extranet? Answer: Extranet = an intranet which can also access external data and other intranets. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:25:42 | What are the four Vs of big data? | what-are-the-four-vs-of-big-data-3 |
What are the four Vs of big data?
Answer:
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| 2020-06-11 15:26:29 | What are the processes of extraction, transformation and loading? | what-are-the-processes-of-extraction-transformation-and-loading | What are the processes of extraction, transformation and loading? Answer: Extraction: extracting data from a variety of sources where it might well have been held in many different formats. Transformation: converting the diverse data into standard formats. Loading: storing the converted data into a new database for future use. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:26:50 | What is meant by ‘monetising data’? | what-is-meant-by-monetising-data | What is meant by ‘monetising data’? Answer: Using data to increase an organisation’s profitability, efficiency and sustainability. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:27:05 | What are the primary activities of Porter’s value chain? | what-are-the-primary-activities-of-porters-value-chain-2 |
What are the primary activities of Porter’s value chain?
Answer:
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| 2020-06-11 15:27:22 | What are the support (or secondary) activities of Porter’s value chain? | what-are-the-support-or-secondary-activities-of-porters-value-chain-2 |
What are the support (or secondary) activities of Porter’s value chain?
Answer:
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| 2020-06-11 15:27:46 | What is the difference between push and pull models of supply chains? | what-is-the-difference-between-push-and-pull-models-of-supply-chains-2 | What is the difference between push and pull models of supply chains? Answer: Push: make goods for inventory usually according to historical demand. Pull: make goods to order. Sales orders pull production through the manufacturing process. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-11 15:28:15 | What are the two axes of the supply portfolio matrix? | what-are-the-two-axes-of-the-supply-portfolio-matrix |
What are the two axes of the supply portfolio matrix?
Answer:
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| 2020-06-11 16:12:19 | What is the correct label for the blank quadrant in the diagram below? | what-is-the-correct-label-for-the-blank-quadrant-in-the-diagram-below |
What is the correct label for the blank quadrant in the diagram below?
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| 2020-06-11 16:12:48 | What is ‘lean synchronisation’? | what-is-lean-synchronisation | What is ‘lean synchronisation’? Answer: Lean synchronisation means that products and services are always delivered to exactly match what customers want, in exact quantities and at the required time and place for delivery. Lean synchronisation should achieve these objectives at the lowest possible cost and it should result in items flowing rapidly and smoothly through manufacturing processes and supply networks. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:51:29 | What are the five types of supply chain relationship management? | what-are-the-five-types-of-supply-chain-relationship-management |
What are the five types of supply chain relationship management?
Answer:
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| 2020-06-12 11:51:50 | What are MRPI and MRPII? | what-are-mrpi-and-mrpii | What are MRPI and MRPII? Answer: MRPI = material resource planning MRPII = manufacturing resource planning | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:52:16 | What is CNC in process technology? | what-is-cnc-in-process-technology | What is CNC in process technology? Answer: Computer numerical control | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:52:39 | Flexible manufacturing arises from two sources. What are these? | flexible-manufacturing-arises-from-two-sources-what-are-these |
Flexible manufacturing arises from two sources. What are these?
Answer:
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| 2020-06-12 11:53:01 | What is additive manufacturing (3D printing)? | what-is-additive-manufacturing-3d-printing | What is additive manufacturing (3D printing)? Answer: In additive manufacturing or 3D printing material is extruded to form complex shapes which harden to produce sophisticated components that can be difficult or expensive to make in any other way. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:53:32 | What is meant by Quality control? | what-is-meant-by-quality-control | What is meant by Quality control? Answer: Quality control : processes (such as sampling and testing) that used to check on quality. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:54:09 | What is meant by Quality assurance? | what-is-meant-by-quality-assurance | What is meant by Quality assurance? Answer: Quality assurance: the management steps that allow an organisation to dependably achieve a stated level of quality. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:54:38 | What is meant by Quality management? | what-is-meant-by-quality-management | What is meant by Quality management? Answer: Quality management: overseeing all the activities needed to achieve and maintain the required quality. It includes establishing the required quality level, setting quality control procedures and also considering quality improvement. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:54:59 | In quality management, what are the two costs of conformance? | in-quality-management-what-are-the-two-costs-of-conformance |
In quality management, what are the two costs of conformance?
Answer:
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| 2020-06-12 11:55:21 | In quality management, what are the two costs of non-conformance? | in-quality-management-what-are-the-two-costs-of-non-conformance |
In quality management, what are the two costs of non-conformance?
Answer:
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| 2020-06-12 11:55:40 | What is ‘kaizen’? | what-is-kaizen | What is ‘kaizen’? Answer: The process of improving quality through a continuous series of small changes | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:55:56 | What is DMAIC? | what-is-dmaic | What is DMAIC? Answer: DMAIC stands for: define, measure, analyse, improve and control. It is part of the 6sigma approach to improving quality. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:56:17 | What is meant by ‘reverse logistics’? | what-is-meant-by-reverse-logistics | What is meant by ‘reverse logistics’? Answer: Reverse logistics refers to all operations related to the reuse of products and materials. Its purpose is to recapture value or to achieve proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:56:57 | What are the elements of the PESTEL model? | what-are-the-elements-of-the-pestel-model |
What are the elements of the PESTEL model?
Answer:
Lists potential macro-environmental influences:
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| 2020-06-12 11:57:13 | What is market segmentation? | what-is-market-segmentation | What is market segmentation? Answer: Breaking down the market into different sections or segments to decide what type of products or services buyers in each might want. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:57:32 | What are the three types of market targeting? | what-are-the-three-types-of-market-targeting-2 |
What are the three types of market targeting?
Answer:
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| 2020-06-12 11:57:50 | What are the 7Ps of product positioning? | what-are-the-7ps-of-product-positioning |
What are the 7Ps of product positioning?
Answer:
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| 2020-06-12 11:58:12 | What is price skimming? | what-is-price-skimming-2 | What is price skimming? Answer: A very high initial price is set for a new product as there will be some consumers willing to pay that. The price is then gradually lowered to attract less wealthy or less desperate consumers. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:58:30 | What are the four influences on a product’s price? (4 Cs) | what-are-the-four-influences-on-a-products-price-4-cs |
What are the four influences on a product’s price? (4 Cs)
Answer:
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| 2020-06-12 11:59:05 | What are the four types of competition? | what-are-the-four-types-of-competition |
What are the four types of competition?
Answer:
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| 2020-06-12 11:59:23 | What is meant by ‘the price elasticity of demand’? | what-is-meant-by-the-price-elasticity-of-demand | What is meant by ‘the price elasticity of demand’? Answer: This describes how demand changes as prices change. A high elasticity of demand means that the product is very price sensitive. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 11:59:42 | What are the 6Is of e-business? | what-are-the-6is-of-e-business-2 |
What are the 6Is of e-business?
Answer:
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| 2020-06-12 11:59:58 | What are the three categories of market research? | what-are-the-three-categories-of-market-research |
What are the three categories of market research?
Answer:
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| 2020-06-12 12:00:19 | The marketing of products and services differ in five respects. What are these? | the-marketing-of-products-and-services-differ-in-five-respects-what-are-these |
The marketing of products and services differ in five respects. What are these?
Answer:
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| 2020-06-12 12:00:48 | In order, what are the four (or five) stages of a product life cycle? | in-order-what-are-the-four-or-five-stages-of-a-product-life-cycle |
In order, what are the four (or five) stages of a product life cycle?
Answer:
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| 2020-06-12 12:01:10 | What is life cycle costing? | what-is-life-cycle-costing |
What is life cycle costing?
Answer:
The concept of life cycle costing recognises that, if a profit is going to be made, revenue has to cover all costs, not just the production costs.
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| 2020-06-12 12:01:42 | What are the two axes on a Boston Consulting Group matrix? | what-are-the-two-axes-on-a-boston-consulting-group-matrix-2 |
What are the two axes on a Boston Consulting Group matrix?
Answer:
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| 2020-06-12 12:02:35 | What headings should go into the blank boxes? | what-headings-should-go-into-the-blank-boxes-2 |
What headings should go into the blank boxes?
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| 2020-06-12 12:03:08 | Why is a planning stage necessary in human resource management? | why-is-a-planning-stage-necessary-in-human-resource-management | Why is a planning stage necessary in human resource management? Answer: Human resource planning should be based on the strategic plan of the organisation and there has to be a human resources budget based on future estimated needs | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 12:03:42 | What is meant by an ‘open appraisal’? | what-is-meant-by-an-open-appraisal | What is meant by an ‘open appraisal’? Answer: Initially, the appraisal form is blank and the manager and employee go through it together discussing what the mark should be. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 12:04:00 | Lockett suggested six barriers to human performance appraisal. What are these? | lockett-suggested-six-barriers-to-human-performance-appraisal-what-are-these |
Lockett suggested six barriers to human performance appraisal. What are these?
Answer:
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| 2020-06-12 12:04:26 | What is a competency framework? | what-is-a-competency-framework | What is a competency framework? Answer: A method of describing the values, skills and abilities that are required to perform given roles. They also provide clear focus to for recruitment and to support the development of staff in order to deliver the best possible performance. To define a framework for a given role there will be a general description of the competency followed by a list of attitudes, behaviours, skills and abilities that would indicate competence in the relevant area. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 12:04:43 | What is the difference between ‘training’ and ‘development’? | what-is-the-difference-between-training-and-development |
What is the difference between ‘training’ and ‘development’?
Answer:
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| 2020-06-12 12:05:00 | Who developed the hygiene theory of motivation? | who-developed-the-hygiene-theory-of-motivation | Who developed the hygiene theory of motivation? Answer: Herzberg | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 12:05:32 | What are the three approaches or types of job design and which is expected to be most effective in improving motivation in the long term? | what-are-the-three-approaches-or-types-of-job-design-and-which-is-expected-to-be-most-effective-in-improving-motivation-in-the-long-term |
What are the three approaches or types of job design and which is expected to be most effective in improving motivation in the long term?
Answer:
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| 2020-06-12 12:06:13 | What are intrinsic and extrinsic rewards? | what-are-intrinsic-and-extrinsic-rewards-2 |
What are intrinsic and extrinsic rewards?
Answer:
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| 2020-06-12 12:06:26 | What is meant by the consequentialist approach to ethics? | what-is-meant-by-the-consequentialist-approach-to-ethics | What is meant by the consequentialist approach to ethics? Answer: Whether something is right or wrong depends on the consequences, or outcome, of the act. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-12 12:06:42 | What are CIMA’s five fundamental principles? | what-are-cimas-five-fundamental-principles |
What are CIMA’s five fundamental principles?
Answer:
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| 2020-06-29 10:17:01 | What is the difference between absolute and relative ethical theories? | what-is-the-difference-between-absolute-and-relative-ethical-theories | What is the difference between absolute and relative ethical theories? Answer: Absolute value theorists assume that there is only one set of moral rules that are unchanging and always true. Relative value theorists accept that there are many moral/ethical codes each of which evolves over time and each could be different from every other. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:17:24 | What is teleology/utilitarianism/consequentialism in ethics? | what-is-teleology-utilitarianism-consequentialism-in-ethics | What is teleology/utilitarianism/consequentialism in ethics? Answer: These state that any action must be viewed in terms of the consequences that the action produces: do the consequences serve some intrinsic good? Utilitarianism proposes that one should act in such a way to produce the greatest good for the greatest number. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:17:44 | What is the deontology approach to ethics? | what-is-the-deontology-approach-to-ethics | What is the deontology approach to ethics? Answer: Deontology refers to duty bound ethics, suggests that ethics arise from the rightness or wrongness of actions themselves, as opposed to the rightness or wrongness of the consequences of those actions. It argues that decisions should be made considering the factors of one's duties and other's rights. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:18:14 | What is meant by ‘public interest? | what-is-meant-by-public-interest | The CIMA Code of Ethics states that a distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. What is meant by ‘public interest? Answer: The “public” includes all users of financial information and decisions. “Interest” describes the responsibilities that professional accountants have to society. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:18:33 | What is IFAC? | what-is-ifac-2 | What is IFAC? Answer: The International Federation of Accountants. This body develops accounting and auditing standards that it hopes will be adopted across all countries. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:18:49 | What is the IESBA? | what-is-the-iesba | What is the IESBA? Answer: The International Ethical Standards Board for Accountants (part of IFAC) develops ethical codes and guidance. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:19:18 | Match the following terms to (1) or (2) following: | match-the-following-terms-to-1-or-2-following | Match the following terms to (1) or (2) following: Rules based = (1) compliance based (2) integrity or principles based Framework based= (1) compliance based (2) integrity or principles based Answer: Rules based = compliance based Framework based = integrity or principles based | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:19:57 | What does that mean in the context of a member of CIMA? | what-does-that-mean-in-the-context-of-a-member-of-cima | One of the fundamental ethical principles is ‘objectivity’. What does that mean in the context of a member of CIMA? Answer: Members should be influenced by the facts and the facts only. They must avoid bias, conflict of interest and undue influence. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:20:15 | For what reasons can the principle of confidentiality be breached? | for-what-reasons-can-the-principle-of-confidentiality-be-breached | For what reasons can the principle of confidentiality be breached? Answer: Members should not disclose confidential information unless they have a legal or professional duty or right to do so. An example of a legal duty to disclose information can arise if a member thinks that a client or the person they are working for is involved in money laundering. There might be public interest reasons also. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:20:44 | What are four ways or tools in which employees’ personal values can be brought more into line with the organisation’s values? | what-are-four-ways-or-tools-in-which-employees-personal-values-can-be-brought-more-into-line-with-the-organisations-values | What are four ways or tools in which employees’ personal values can be brought more into line with the organisation’s values? Answer: • Recruitment • Training • Ethical code • Corporate culture | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:21:12 | What is lifelong learning? | what-is-lifelong-learning | What is lifelong learning? Answer: “The provision or use of learning opportunities, both formal and informal, throughout people's lives in order to promote continuous development and improvement of the knowledge and skills needed for employment and personal fulfilment | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:22:00 | What are CIMA’s five fundamental ethical principles?? | what-are-cimas-five-fundamental-ethical-principles-2 | What are CIMA’s five fundamental ethical principles?? Answer: • Integrity • Objectivity • Professional competence and due care • Confidentiality • Professional behaviour | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:30:39 | What are the five classes of threat to professional ethics? | what-are-the-five-classes-of-threat-to-professional-ethics | What are the five classes of threat to professional ethics? Answer: • Self-interest • Self-review • Advocacy • Familiarity • Intimidation | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:31:07 | What is the basis of the ethical framework? | what-is-the-basis-of-the-ethical-framework | What is the basis of the ethical framework? Answer: • Ethical principles to be followed • These are subject to risks • Accountants should use safeguards to avoid or to respond to risks. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:31:24 | What is professional scepticism? | what-is-professional-scepticism-2 | What is professional scepticism? Answer: Approach work with a questioning mind. It does not mean that you expect that every piece of information you are supplied with has been deliberately falsified. On the other hand, it does not mean that you automatically believe everything you are told. You must walk a tight-rope between belief and disbelief and be aware of human frailty and fallibility. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 10:40:00 | What are the missing labels in two of the circles in the diagram below? | what-are-the-missing-labels-in-two-of-the-circles-in-the-diagram-below |
What are the missing labels in two of the circles in the diagram below?
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| 2020-06-29 10:40:53 | If CIMA’s ethical principles conflict with national law, which should be followed? | if-cimas-ethical-principles-conflict-with-national-law-which-should-be-followed | If CIMA’s ethical principles conflict with national law, which should be followed? Answer: National law. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:05:06 | What is ‘corporate governance’? | what-is-corporate-governance-3 | What is ‘corporate governance’? Answer: Corporate governance is a system by which companies are directed and controlled. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:05:27 | What are the five OECD principles of corporate governance? | what-are-the-five-oecd-principles-of-corporate-governance-2 |
What are the five OECD principles of corporate governance?
Answer:
Corporate governance frameworks should:
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| 2020-06-29 11:05:46 | What are the fie headings of the UK Corporate Governance CODE? | what-are-the-fie-headings-of-the-uk-corporate-governance-code-2 |
What are the fie headings of the UK Corporate Governance CODE?
Answer:
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| 2020-06-29 11:06:04 | Which of the UK Corporate Governance Code and the USA’s Sarbanes Oxley has the force of law? | which-of-the-uk-corporate-governance-code-and-the-usas-sarbanes-oxley-has-the-force-of-law-2 | Which of the UK Corporate Governance Code and the USA’s Sarbanes Oxley has the force of law? Answer: UKCGC = not in statute. Enforced for listed companies by the stock exchange: comply or explain SA Act = US law. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:06:31 | What are these committees? | what-are-these-committees |
The UK Corporate Governance Code mentions three board sub-committees that are entirely (or principally) staffed by non-executive directors.
What are these committees?
Answer:
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| 2020-06-29 11:07:01 | What are IFAC’s eight drivers for sustainable corporate success? | what-are-ifacs-eight-drivers-for-sustainable-corporate-success |
What are IFAC’s eight drivers for sustainable corporate success?
Answer:
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| 2020-06-29 11:07:43 | What are the two levels of a two-tier board system? | what-are-the-two-levels-of-a-two-tier-board-system |
What are the two levels of a two-tier board system?
Answer:
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| 2020-06-29 11:08:26 | What is meant by the term ‘assurance’? | what-is-meant-by-the-term-assurance |
What is meant by the term ‘assurance’?
Answer:
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| 2020-06-29 11:08:48 | Why is external audit needed? | why-is-external-audit-needed | Why is external audit needed? Answer: Shareholders own the company but directors manage and run it. Directors produce financial statements annually and an audit examines these to see if they give a true and fair view. This allows shareholders to better assess how their company and its directors are doing. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:09:06 | With regard to directors and shareholders, who are the principals and who are the agents? | with-regard-to-directors-and-shareholders-who-are-the-principals-and-who-are-the-agents |
With regard to directors and shareholders, who are the principals and who are the agents?
Answer:
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| 2020-06-29 11:09:22 | What are the five elements of a set of financial statements? | what-are-the-five-elements-of-a-set-of-financial-statements |
What are the five elements of a set of financial statements?
Answer:
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| 2020-06-29 11:09:48 | What are the three ways in which an audit opinion can be modified? | what-are-the-three-ways-in-which-an-audit-opinion-can-be-modified |
What are the three ways in which an audit opinion can be modified?
Answer:
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| 2020-06-29 11:11:19 | Which of the following statements is/are true? Auditors prepare the financial statements | which-of-the-following-statements-is-are-true-auditors-prepare-the-financial-statements |
Which of the following statements is/are true?
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| 2020-06-29 11:12:02 | What word is missing from each of the blanks in the following definition of internal audit? | what-word-is-missing-from-each-of-the-blanks-in-the-following-definition-of-internal-audit | What word is missing from each of the blanks in the following definition of internal audit? An ?????? appraisal activity established within an organisation as a service to it. It is a control which functions by examining and evaluating the adequacy and effectiveness of other ?????? ; a management tool which analyses the effectiveness of all parts of an entity’s operations and management.’ (CIMA’s Management Accounting Official Terminology) Answer: An independent appraisal activity established within an organisation as a service to it. It is a control which functions by examining and evaluating the adequacy and effectiveness of other controls ; a management tool which analyses the effectiveness of all parts of an entity’s operations and management. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:22:53 | What should go into Internal audit column and row of the table below? | what-should-go-into-internal-audit-column-and-row-of-the-table-below |
What should go into Internal audit column and row of the table below?
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| 2020-06-29 11:23:32 | What should go into External audit column and row of the table below? | what-should-go-into-external-audit-column-and-row-of-the-table-below |
What should go into External audit column and row of the table below?
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| 2020-06-29 11:24:07 | A receipt of cash is debited to the cash book, but not credited to sales. | a-receipt-of-cash-is-debited-to-the-cash-book-but-not-credited-to-sales | A receipt of cash is debited to the cash book, but not credited to sales. Is this an error of omission, and error of commission, an error of principle or a compensating error? Answer: This is an error of omission. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:24:34 | An invoice for redecorating is debited to non-current assets. | an-invoice-for-redecorating-is-debited-to-non-current-assets | An invoice for redecorating is debited to non-current assets. Is this an error of omission, and error of commission, an error of principle or a compensating error? This is an error of principle. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:25:12 | An invoice from a supplier is entered twice into the accounting system (Dr Purchases; Cr Supplier) | an-invoice-from-a-supplier-is-entered-twice-into-the-accounting-system-dr-purchases-cr-supplier | An invoice from a supplier is entered twice into the accounting system (Dr Purchases; Cr Supplier) Is this an error of omission, and error of commission, an error of principle or a compensating error? Answer: This is an error of commission. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:25:53 | What are the two classes of fraud? | what-are-the-two-classes-of-fraud-2 |
What are the two classes of fraud?
Answer:
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| 2020-06-29 11:26:35 | What are the three pre-requisites for fraud? | what-are-the-three-pre-requisites-for-fraud |
What are the three pre-requisites for fraud?
Answer:
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| 2020-06-29 11:26:56 | What are the elements of an anti-fraud policy which lead to fraud deterrence? | what-are-the-elements-of-an-anti-fraud-policy-which-lead-to-fraud-deterrence-2 |
What are the elements of an anti-fraud policy which lead to fraud deterrence?
Answer:
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| 2020-06-29 11:27:15 | What are the five elements of an internal control system? | what-are-the-five-elements-of-an-internal-control-system-2 |
What are the five elements of an internal control system?
Answer:
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| 2020-06-29 11:27:33 | In internal control systems, what is meant by ‘segregation of duties’? | in-internal-control-systems-what-is-meant-by-segregation-of-duties | In internal control systems, what is meant by ‘segregation of duties’? Answer: Transactions should be split up so that no one person controls all of it. This increases the chance of errors being found and also make fraud more difficult because employees would need to collude – and that increases their risk of being found out. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:27:56 | What is corporate social responsibility? | what-is-corporate-social-responsibility-3 | What is corporate social responsibility? Answer: CSR refers to going beyond what is required by the law. CSR involves acting as a good corporate citizen, satisfying the needs of many stakeholders, and reducing adverse effects caused by the organisation’s activities. One definition: CSR involves acting as a good corporate citizen, satisfying the needs of many stakeholders, and reducing adverse effects caused by the organisation’s activities. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:30:52 | What is the ‘triple bottom line’? | what-is-the-triple-bottom-line |
What is the ‘triple bottom line’?
Answer:
The triple bottom line is one framework for reports which include CSR impacts. It has three sections:
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| 2020-06-29 11:31:09 | What is the Global Reporting Initiative? | what-is-the-global-reporting-initiative | What is the Global Reporting Initiative? Answer: GRI is an international independent organisation that helps businesses, governments and other organisations understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption and many others. GRI issues reporting standards grouped like the triple bottom line approach, into environmental, social and economic standards. F | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:31:36 | What are the requirements for a contract to exist? | what-are-the-requirements-for-a-contract-to-exist |
What are the requirements for a contract to exist?
Answer:
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| 2020-06-29 11:32:05 | What are the two classes of offer? | what-are-the-two-classes-of-offer | What are the two classes of offer? Answer: Express and implied | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:32:23 | What is an invitation to treat? | what-is-an-invitation-to-treat | What is an invitation to treat? Answer: An invitation to treat is where one party makes it known that they are ready to receive an offer. For example, products on supermarket shelves with prices attached do not constitute offers: these are invitations to you to make an offer to buy the goods. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:32:41 | What are the six ways in which offers can be terminated? | what-are-the-six-ways-in-which-offers-can-be-terminated |
What are the six ways in which offers can be terminated?
Answer:
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| 2020-06-29 11:33:08 | Which of the following constitute acceptance of an offer? | which-of-the-following-constitute-acceptance-of-an-offer |
Which of the following constitute acceptance of an offer?
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| 2020-06-29 11:33:30 | If documents relating to a contract are being posted, when do offers, acceptance and revocations occur? | if-documents-relating-to-a-contract-are-being-posted-when-do-offers-acceptance-and-revocations-occur |
If documents relating to a contract are being posted, when do offers, acceptance and revocations occur?
Answer:
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| 2020-06-29 11:33:49 | In terms of ‘sufficiency’ and ‘adequacy’ what is the rule for valid consideration? | in-terms-of-sufficiency-and-adequacy-what-is-the-rule-for-valid-consideration | In terms of ‘sufficiency’ and ‘adequacy’ what is the rule for valid consideration? Answer: Consideration must be sufficient but need not be adequate. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:34:37 | As an act of goodwill and neighbourly kindness, you paint the front door of someone’s house. | as-an-act-of-goodwill-and-neighbourly-kindness-you-paint-the-front-door-of-someones-house | As an act of goodwill and neighbourly kindness, you paint the front door of someone’s house. The householder, being delighted, promises to pay you $30, but then fails to pay. Has a contract been formed and if no, why not? There is no contract as the consideration (your paint work) is past. Both sided of the exchange have to be agreed before the contract is executed. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:35:32 | If a grandparent promises to pay for a grandchild’s university education what document is needed to ensure | if-a-grandparent-promises-to-pay-for-a-grandchilds-university-education-what-document-is-needed-to-ensure | If a grandparent promises to pay for a grandchild’s university education what document is needed to ensure that this is legally enforceable despite the lack of consideration from the child. Answer: A deed – a formal document requiring signatures and witnesses. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:35:53 | What is the distinction between a’ term’, a ‘condition’ and a ‘warranty’? | what-is-the-distinction-between-a-term-a-condition-and-a-warranty |
What is the distinction between a’ term’, a ‘condition’ and a ‘warranty’?
Answer:
Terms consist of conditions and/or warranties.
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| 2020-06-29 11:36:14 | What are the three sources of implied terms? | what-are-the-three-sources-of-implied-terms |
What are the three sources of implied terms?
Answer:
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| 2020-06-29 11:36:55 | What are the three requirements for misrepresentation to have occurred? | what-are-the-three-requirements-for-misrepresentation-to-have-occurred |
What are the three requirements for misrepresentation to have occurred?
Answer:
A misrepresentation is a false statement of fact or law which induces one party to enter into a contract. The statement must be:
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| 2020-06-29 11:37:15 | What are the three requirements for fraudulent misrepresentation? | what-are-the-three-requirements-for-fraudulent-misrepresentation |
What are the three requirements for fraudulent misrepresentation?
Answer:
The statement was made:
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| 2020-06-29 11:37:47 | What is the distinction between ‘a contract for services’ and a ‘contract for service’? | what-is-the-distinction-between-a-contract-for-services-and-a-contract-for-service | What is the distinction between ‘a contract for services’ and a ‘contract for service’? Answer: An employer-employee relationship implies that there is a contract of service and the employer controls how, when and where the work is done. A contract for services is the relationship that exists between a self-employed person and whoever is paying him or her. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:38:24 | In relation to implied terms in employment contracts, what is the duty of ‘fidelity’? | in-relation-to-implied-terms-in-employment-contracts-what-is-the-duty-of-fidelity | In relation to implied terms in employment contracts, what is the duty of ‘fidelity’? Answer: This requires the employee to serve the employer faithfully. It is implied in all employment contracts and means that an employee may not act against the interests of the employer. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:38:46 | In relation to implied terms in employment contracts, how much care and skill must an employee bring to the job? | in-relation-to-implied-terms-in-employment-contracts-how-much-care-and-skill-must-an-employee-bring-to-the-job | In relation to implied terms in employment contracts, how much care and skill must an employee bring to the job? Answer: Employees must exercise reasonable care and skill. The level required will depend on the experience and qualifications of the employee. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:39:04 | Equal opportunities legislation mentions three types of illegal behaviour. What are these? | equal-opportunities-legislation-mentions-three-types-of-illegal-behaviour-what-are-these |
Equal opportunities legislation mentions three types of illegal behaviour. What are these?
Answer:
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| 2020-06-29 11:39:21 | What is meant by the term ‘diversity’ in employment? | what-is-meant-by-the-term-diversity-in-employment | What is meant by the term ‘diversity’ in employment? Answer: Diversity of employment is ensuring that the composition of the workforce reflects the population as a whole. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:39:37 | What is the difference between bribery and facilitation payments? | what-is-the-difference-between-bribery-and-facilitation-payments | What is the difference between bribery and facilitation payments? Answer: These are improper payments of cash or gifts to third parties. Bribery : payments to induce someone to do something they shouldn’t do. Facilitation payments: payments to induce someone to do something they should be doing anyhow. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:40:09 | What are the three stages of money-laundering? | what-are-the-three-stages-of-money-laundering |
What are the three stages of money-laundering?
Answer:
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| 2020-06-29 11:40:44 | Who has responsibility for health and safety at work? Employers only, employees only, both? | who-has-responsibility-for-health-and-safety-at-work-employers-only-employees-only-both | Who has responsibility for health and safety at work? Employers only, employees only, both? Answer: Both employers and employees have responsibility. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:41:02 | What are the three ways in which employment can be ended? | what-are-the-three-ways-in-which-employment-can-be-ended |
What are the three ways in which employment can be ended?
Answer:
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| 2020-06-29 11:41:19 | What is meant by ‘constructive dismissal’? | what-is-meant-by-constructive-dismissal | What is meant by ‘constructive dismissal’? Answer: This is where the employer’s behaviour entitles the employee to presume he or she has been dismissed. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:41:35 | What are the three potential remedies for unfair dismissal? | what-are-the-three-potential-remedies-for-unfair-dismissal |
What are the three potential remedies for unfair dismissal?
Answer:
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| 2020-06-29 11:42:23 | What is a partnership? | what-is-a-partnership | What is a partnership? Answer: If two or more people trade together with a view to profit, then a partnership is formed. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:42:42 | What are the advantages of forming a limited company? | what-are-the-advantages-of-forming-a-limited-company |
What are the advantages of forming a limited company?
Answer:
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| 2020-06-29 11:43:03 | What are the disadvantages of forming a limited company? | what-are-the-disadvantages-of-forming-a-limited-company |
What are the disadvantages of forming a limited company?
Answer:
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| 2020-06-29 11:43:45 | What are the two documents that embody a company’s constitution? | what-are-the-two-documents-that-embody-a-companys-constitution |
What are the two documents that embody a company’s constitution?
Answer:
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| 2020-06-29 11:44:04 | What is meant by the term ‘corporate veil’? | what-is-meant-by-the-term-corporate-veil | What is meant by the term ‘corporate veil’? Answer: Limited companies have a separate legal existence and that their actions and liabilities are separate from those of the shareholders and directors. A company might be sued if it causes damage or is owed, but the shareholders won’t be because the company is the guilty party. This distinction is the ‘veil of incorporation’. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:44:27 | How can the veil of incorporation be lifted? | how-can-the-veil-of-incorporation-be-lifted | How can the veil of incorporation be lifted? Answer: The veil of incorporation can be lifted only in circumstances where incorporation is being used to give protection from improper behaviour and so the company is being used as a front or to defraud creditors. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 11:45:52 | What are the following: | what-are-the-following |
What are the following:
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| 2020-06-29 13:18:23 | What term is missing from the above formula for GDP? | what-term-is-missing-from-the-above-formula-for-gdp |
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| 2020-06-29 13:19:40 | What arrow label (on the left) is missing from the above diagram which shows the circular flow of income? | what-arrow-label-on-the-left-is-missing-from-the-above-diagram-which-shows-the-circular-flow-of-income |
What arrow label (on the left) is missing from the above diagram which shows the circular flow of income?
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| 2020-06-29 13:20:28 | In the following diagram, what is happening when the aggregate supply line becomes vertical? | in-the-following-diagram-what-is-happening-when-the-aggregate-supply-line-becomes-vertical |
In the following diagram, what is happening when the aggregate supply line becomes vertical?
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| 2020-06-29 13:20:43 | What are the deflationary and inflationary gaps? | what-are-the-deflationary-and-inflationary-gaps | What are the deflationary and inflationary gaps? Answer: A deflationary gap occurs when aggregate demand needs to increase if full employment is to be achieved. An inflationary gap occurs when aggregate demand has to decrease to match full employment. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:21:02 | What events can cause a rightwards shift in the aggregate demand curve? | what-events-can-cause-a-rightwards-shift-in-the-aggregate-demand-curve |
What events can cause a rightwards shift in the aggregate demand curve?
Answer:
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| 2020-06-29 13:21:21 | What are the five types or causes of inflation? | what-are-the-five-types-or-causes-of-inflation |
What are the five types or causes of inflation?
Answer:
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| 2020-06-29 13:22:00 | What are the Laspayre and Paasch indexes? | what-are-the-laspayre-and-paasch-indexes | What are the Laspayre and Paasch indexes? Answer: They are indexes to measure inflation. Laspayre: uses base year quantities or base year values. Paasch: uses current year quantities or current year values. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:23:42 | In the following diagram, what label should be on the middle horizontal arrow? | in-the-following-diagram-what-label-should-be-on-the-middle-horizontal-arrow |
In the following diagram, what label should be on the middle horizontal arrow?
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| 2020-06-29 13:24:01 | What are the four ways in which governments can obtain more money? | what-are-the-four-ways-in-which-governments-can-obtain-more-money |
What are the four ways in which governments can obtain more money?
Answer:
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| 2020-06-29 13:24:16 | What are regressive, progressive and proportional taxes? | what-are-regressive-progressive-and-proportional-taxes |
What are regressive, progressive and proportional taxes?
Answer:
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| 2020-06-29 13:24:45 | What is an ‘ad valorum’ tax? | what-is-an-ad-valorum-tax | What is an ‘ad valorum’ tax? Answer: An ad valorem tax is charged as a fixed percentage of the price of the good. A good example of an ad valorem tax is VAT | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:25:51 | What are the three elements of fiscal policy? | what-are-the-three-elements-of-fiscal-policy |
What are the three elements of fiscal policy?
Answer:
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| 2020-06-29 13:26:17 | What is the ‘multiplier’? | what-is-the-multiplier | What is the ‘multiplier’? Answer: If a government injects money into the economy, this will be ultimately earned by suppliers and employees who will spend it in turn thus stimulating the economy even more. The effect is that the total additional money spent in the economy is: Initial expenditure x 1/Marginal propensity to save | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:26:42 | With regard to the balance of payments what are the capital and current accounts? | with-regard-to-the-balance-of-payments-what-are-the-capital-and-current-accounts | With regard to the balance of payments what are the capital and current accounts? Answer: Capital account: flows relating to investments and proceeds from the sale of investments. Current account: mainly flows from the effects of trade and income. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:27:00 | What is absolute advantage in relation to international trade? | what-is-absolute-advantage-in-relation-to-international-trade | What is absolute advantage in relation to international trade? Answer: A country has absolute advantage when it performs a task more efficiently than producers in other countries | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:27:21 | What is comparative advantage in relation to international trade? | what-is-comparative-advantage-in-relation-to-international-trade | What is comparative advantage in relation to international trade? Answer: It is when it is better if one country switches production to a particular product because, compared to making another product, it is comparatively more efficient | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:27:40 | What are four reasons why international trade occurs? | what-are-four-reasons-why-international-trade-occurs |
What are four reasons why international trade occurs?
Answer:
Any four of:
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| 2020-06-29 13:37:12 | What are four potential drawbacks arising from international trade? | what-are-four-potential-drawbacks-arising-from-international-trade |
What are four potential drawbacks arising from international trade?
Answer:
Any four of:
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| 2020-06-29 13:37:34 | What are four possible protectionist methods? | what-are-four-possible-protectionist-methods |
What are four possible protectionist methods?
Answer:
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| 2020-06-29 13:37:59 | A country is trading with the USA. If its currency strengthens against the US$ | a-country-is-trading-with-the-usa-if-its-currency-strengthens-against-the-us |
A country is trading with the USA. If its currency strengthens against the US$ what effect does this have on the price of its exports in the USA and the cost of its imports from the USA?
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| 2020-06-29 13:38:17 | Does high inflation in a country weaken or strengthen a currency with respect to the currency of a low-inflation country? | does-high-inflation-in-a-country-weaken-or-strengthen-a-currency-with-respect-to-the-currency-of-a-low-inflation-country | Does high inflation in a country weaken or strengthen a currency with respect to the currency of a low-inflation country? Answer: The currency of the country with the higher inflation weakens with respect to the currency of the low inflation currency. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:38:36 | What is meant by the term ‘globalisation’? | what-is-meant-by-the-term-globalisation | What is meant by the term ‘globalisation’? Answer: The process by which the countries and businesses throughout the world are becoming increasingly interconnected because of increased trade. Globalisation has increased the production of goods and services. The biggest companies are multi-national companies with subsidiaries in many countries throughout world. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:43:31 | What is ‘off-shoring’? | 575211 | What is ‘off-shoring’? Answer: Off-shoring is the process of sending manufacturing abroad eg to make use of cheaper labour rates. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:43:57 | What is the purpose of trade agreements? | what-is-the-purpose-of-trade-agreements | What is the purpose of trade agreements? Answer: Trade agreements are treaties between countries on their reciprocal tariffs, quotas etc. The purpose of the agreements is to reduce the barriers to trade and simplify international trade, improve economic efficiency and provide consumers with more choice. They reduce protectionism. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:44:14 | What is PESTEL? | what-is-pestel-2 |
What is PESTEL?
Answer:
PESTEL is a way of appraising the macro-environment. The environmental influences are:
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| 2020-06-29 13:44:34 | What is an ‘organisation’? | what-is-an-organisation | What is an ‘organisation’? Answer: A social arrangement which pursues collective goals, which controls its own performance, and which has a boundary separating it from its environment | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:45:17 | Are the following statements true or false? Not-for-profit organisations implies they are state-owned | are-the-following-statements-true-or-false-not-for-profit-organisations-implies-they-are-state-owned | Are the following statements true or false? Not-for-profit organisations implies they are state-owned Public sector organisations are all not-for profit organisations Answer: Neither is true. A charity is not-for-profit, but is not necessarily state-owned. A state-owned airline might be expected to make a profit. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:45:49 | Is the following statement true or false? If a company has limited liability this means that the company is protected from its creditors. | is-the-following-statement-true-or-false-if-a-company-has-limited-liability-this-means-that-the-company-is-protected-from-its-creditors | Is the following statement true or false? If a company has limited liability this means that the company is protected from its creditors. Answer: False. The company’s liability is unlimited but shareholders enjoy protection from the company creditors. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:46:24 | What is the formula for return on capital employed? | what-is-the-formula-for-return-on-capital-employed | What is the formula for return on capital employed? Answer: 100 x Operating profit before tax and interest/Capital employed | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:46:43 | What is the formula for return on equity? | what-is-the-formula-for-return-on-equity | What is the formula for return on equity? Answer: 100 x Operating profit after interest and before tax/Shareholders’ equity | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:47:05 | What are the three classes of stakeholder? | what-are-the-three-classes-of-stakeholder | What are the three classes of stakeholder? Answer: Internal, connected, external | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:47:44 | Is the following statement true or false? When complying with the UK Corporate Governance Code a company | is-the-following-statement-true-or-false-when-complying-with-the-uk-corporate-governance-code-a-company | Is the following statement true or false? When complying with the UK Corporate Governance Code a company can have the same person as CEO and Chairman. Answer: This is false. They roles must be separated. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:48:15 | When complying with the UK Corporate Governance Code a company can have twice as many executive directors as non-executive directors. | when-complying-with-the-uk-corporate-governance-code-a-company-can-have-twice-as-many-executive-directors-as-non-executive-directors | Is the following statement true or false? When complying with the UK Corporate Governance Code a company can have twice as many executive directors as non-executive directors. Answer: False. There should be a balance (about 50/50) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:48:59 | When complying with the UK Corporate Governance, what are the three board sub-committees consisting of (exclusively or principally) non-executive directors? | when-complying-with-the-uk-corporate-governance-what-are-the-three-board-sub-committees-consisting-of-exclusively-or-principally-non-executive-directors |
When complying with the UK Corporate Governance, what are the three board sub-committees consisting of (exclusively or principally) non-executive directors?
Answer:
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| 2020-06-29 13:49:45 | In the diagram below, which of Product A or Product B has the higher elasticity of demand? | in-the-diagram-below-which-of-product-a-or-product-b-has-the-higher-elasticity-of-demand |
In the diagram below, which of Product A or Product B has the higher elasticity of demand?
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| 2020-06-29 13:52:24 | What is the formula for the price elasticity of demand? | what-is-the-formula-for-the-price-elasticity-of-demand |
What is the formula for the price elasticity of demand?
Answer:
The price elasticity of demands=
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| 2020-06-29 13:52:37 | A price elasticity of demand of <1 means what? | a-price-elasticity-of-demand-of | A price elasticity of demand of <1 means what? Answer: The item is showing inelastic behaviour. A rise in price will affect demand relatively little and revenue will increase. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:52:59 | In what direction would the demand curve for a product move if the price of a substitute product increased? | in-what-direction-would-the-demand-curve-for-a-product-move-if-the-price-of-a-substitute-product-increased | In what direction would the demand curve for a product move if the price of a substitute product increased? Answer: The demand curve should move to the right. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:53:15 | It the purchase tax on raw material is increased, will the supply curve move to the right or to the left? | it-the-purchase-tax-on-raw-material-is-increased-will-the-supply-curve-move-to-the-right-or-to-the-left | It the purchase tax on raw material is increased, will the supply curve move to the right or to the left? Answer: The supply curve will move leftward as fewer goods will be produced for a given price. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:53:59 | What is a natural monopoly? | what-is-a-natural-monopoly | What is a natural monopoly? Answer: A natural monopoly is a type of monopoly that exists due to the high start-up costs or powerful economies of scale of conducting a business in a specific industry. A company with a natural monopoly might be the only provider or a product or service in an industry or geographic location. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:54:23 | What are public goods? | what-are-public-goods | What are public goods? Answer: A public good is a product or service that one individual can consume without reducing its supply to another individual, and from which no one is excluded. Examples include public roads, street lighting, defence and law enforcement. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:54:44 | What is an externality? | what-is-an-externality | What is an externality? Answer: An externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit. Externalities interfere with the ability of market forces to optimise the allocation and use of resources. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:55:05 | What are four possible adverse consequences if a government sets minimum prices for a product? | what-are-four-possible-adverse-consequences-if-a-government-sets-minimum-prices-for-a-product |
What are four possible adverse consequences if a government sets minimum prices for a product?
Answer:
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| 2020-06-29 13:55:22 | If a government were to legislate for maximum prices for a commodity how can demand then be matched to supply? | if-a-government-were-to-legislate-for-maximum-prices-for-a-commodity-how-can-demand-then-be-matched-to-supply |
If a government were to legislate for maximum prices for a commodity how can demand then be matched to supply?
Answer:
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| 2020-06-29 13:55:42 | What is the ACCURATE mnemonic for good information? | what-is-the-accurate-mnemonic-for-good-information |
What is the ACCURATE mnemonic for good information?
Answer:
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| 2020-06-29 13:56:54 | What are the two types of common chart used to display frequency distributions? | what-are-the-two-types-of-common-chart-used-to-display-frequency-distributions |
What are the two types of common chart used to display frequency distributions?
Answer:
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| 2020-06-29 13:58:04 | Below there is a cumulative frequency curve for the heights in metres of 300 people. What is the median height? | below-there-is-a-cumulative-frequency-curve-for-the-heights-in-metres-of-300-people-what-is-the-median-height |
Below there is a cumulative frequency curve for the heights in metres of 300 people.
What is the median height?
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| 2020-06-29 13:58:23 | What are the four Vs of big data? | what-are-the-four-vs-of-big-data-4 |
What are the four Vs of big data?
Answer:
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| 2020-06-29 13:58:41 | What is meant by the term ‘longitudinal study’? | what-is-meant-by-the-term-longitudinal-study | What is meant by the term ‘longitudinal study’? Answer: In a longitudinal study, measurements are taken of the same variable at different points in time. For examples, sales each month, profit over a number of years occurrence of illness in a sample of people as they age. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:58:59 | What is meant by the term ‘cross-sectional’ study? | what-is-meant-by-the-term-cross-sectional-study | What is meant by the term ‘cross-sectional’ study? Answer: In a cross-sectional study data from a number of members of a population is examined at a single point in time. For example, the gross profit percentage achieved by 12 branches of a company in 2020. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 13:59:44 | Linear regression will give constants which fit a line of the type: y = ax + b. | linear-regression-will-give-constants-which-fit-a-line-of-the-type-y-ax-b | Linear regression will give constants which fit a line of the type: y = ax + b. Which of y or x should be the independent variable? Answer: x. Essentially the value of x drives the value of y | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:00:09 | What do the values of 1, 0 and -1 mean when talking about a coefficient of correlation? | what-do-the-values-of-1-0-and-1-mean-when-talking-about-a-coefficient-of-correlation |
What do the values of 1, 0 and -1 mean when talking about a coefficient of correlation?
Answer:
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| 2020-06-29 14:00:34 | If the coefficient of correlation, r, is 0.9 what is the coefficient of determination and how can it be interpreted? | if-the-coefficient-of-correlation-r-is-0-9-what-is-the-coefficient-of-determination-and-how-can-it-be-interpreted | If the coefficient of correlation, r, is 0.9 what is the coefficient of determination and how can it be interpreted? Answer: Coefficient of determination = r 2 = 0.9 2 = 0.81 81% of the change in one variable can be explained by change in the other. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:00:55 | “If a coefficient of correlation is very high then this is strong evidence that movements in one variable cause the other.” | if-a-coefficient-of-correlation-is-very-high-then-this-is-strong-evidence-that-movements-in-one-variable-cause-the-other | “If a coefficient of correlation is very high then this is strong evidence that movements in one variable cause the other.” Is that statement true or false? Answer: False. Correlation is not causation | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:01:12 | When is Spearman’s rank correlation coefficient of particular use? | when-is-spearmans-rank-correlation-coefficient-of-particular-use | When is Spearman’s rank correlation coefficient of particular use? Answer: When items can be ranked (ie placed in order) but assigning a score or value to each item is difficult. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:01:44 | What are the four elements of a time series and which two are determined in moving average calculations? | what-are-the-four-elements-of-a-time-series-and-which-two-are-determined-in-moving-average-calculations |
What are the four elements of a time series and which two are determined in moving average calculations?
Answer:
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| 2020-06-29 14:02:40 | What are four purposes of money? | what-are-four-purposes-of-money |
What are four purposes of money?
Answer:
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| 2020-06-29 14:03:00 | What are five functions of banks? | what-are-five-functions-of-banks |
What are five functions of banks?
Answer:
Any five of:
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| 2020-06-29 14:03:43 | What are financial instruments? | what-are-financial-instruments | What are financial instruments? Answer: Financial instruments are assets that can be traded and which permit efficient flows of capital between investors and those needing capital for their operations. Financial instrument are contracts that create a financial asset of one entity and a financial liability or equity instrument of another entity | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:04:03 | What is a debenture? | what-is-a-debenture | What is a debenture? Answer: A financial instrument recording a debt. Debentures can be secured on assets and can be redeemable or irredeemable. Fixed amounts of interest must be paid, usually every 6 months. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:04:18 | What is a convertible? | what-is-a-convertible | What is a convertible? Answer: Convertibles start life as debentures but give investors the option of converting the debentures to shares. This allows investors to take a ‘wait-and-see’ approach. Invest in safe debentures, then convert to shares if the company seems to be doing well. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:04:50 | If a company is doing well and making good profits, which one of the following will increase in value? | if-a-company-is-doing-well-and-making-good-profits-which-one-of-the-following-will-increase-in-value |
If a company is doing well and making good profits, which one of the following will increase in value?
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| 2020-06-29 14:06:08 | If there is a fixed interest Government bond with a coupon rate of 5% | if-there-is-a-fixed-interest-government-bond-with-a-coupon-rate-of-5 | If there is a fixed interest Government bond with a coupon rate of 5%, what value per $100 nominal will this have if the current interest rate in the economy is 2%? Answer: $250. Check: $100 par of the bond will pay $5 annually ie 5% of the nominal value. If the bond actually costs $250 to buy then the return to the purchaser is 5/250 = 2%. Market prices move to provide the return required. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:06:53 | As borrowing terms increase will the interest rate required usually rise or fall? | as-borrowing-terms-increase-will-the-interest-rate-required-usually-rise-or-fall | As borrowing terms increase will the interest rate required usually rise or fall? Answer: It will rise. The normal yield curve shows an increase in interest rate as the period of the loan increases. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:07:45 | If the reserve ratio for banks is 30% (ie 30% of deposits cannot be lent out), | if-the-reserve-ratio-for-banks-is-30-ie-30-of-deposits-cannot-be-lent-out | If the reserve ratio for banks is 30% (ie 30% of deposits cannot be lent out), how much credit is created in total if a customer deposits $12,000? Answer: 12,000/0.3 = $40,000 | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:08:02 | If $1,000 is deposited for 3 years at 5% compound interest, how much will be available at the end of the period? | if-1000-is-deposited-for-3-years-at-5-compound-interest-how-much-will-be-available-at-the-end-of-the-period | If $1,000 is deposited for 3 years at 5% compound interest, how much will be available at the end of the period? Answer: 1,000 x 1.05 3 = 1,159.63 | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:08:25 | What is the present value of 2,000 received after 4 years if the discount rate is 5%? | what-is-the-present-value-of-2000-received-after-4-years-if-the-discount-rate-is-5 | What is the present value of 2,000 received after 4 years if the discount rate is 5%? Answer: 2,000/(1.05) 4 = $1,645 | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:09:25 | What is the present value of $15,000 received at times 1, 2, 3 and 4 if the discount rate is 6%? | what-is-the-present-value-of-15000-received-at-times-1-2-3-and-4-if-the-discount-rate-is-6 |
What is the present value of $15,000 received at times 1, 2, 3 and 4 if the discount rate is 6%?
An extract from the cumulative discount tables is shown below.
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| 2020-06-29 14:10:20 | What is the present value of $8,000 received at times 2, 3 and 4 if the discount rate is 5%? | what-is-the-present-value-of-8000-received-at-times-2-3-and-4-if-the-discount-rate-is-5 |
What is the present value of $8,000 received at times 2, 3 and 4 if the discount rate is 5%?
An extract from the cumulative discount tables is shown below.
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| 2020-06-29 14:10:47 | What is the present value of a perpetuity of $3,000pa received every year starting at time 1 if the discount rate is 5%? | what-is-the-present-value-of-a-perpetuity-of-3000pa-received-every-year-starting-at-time-1-if-the-discount-rate-is-5 | What is the present value of a perpetuity of $3,000pa received every year starting at time 1 if the discount rate is 5%? Answer: PV of the perpetuity starting at time 1 = Annual amount/r = $3,000/0.05 = $60,000 | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:11:09 | What is the definition of the internal rate of return? | what-is-the-definition-of-the-internal-rate-of-return | What is the definition of the internal rate of return? Answer: IRR = the discount rate at which the project yields a zero NPV | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:12:49 | At a discount rate of 5% a project has a positive NPV of $1,000; at 12% the NPV is -$800. What is the approximate IRR? | at-a-discount-rate-of-5-a-project-has-a-positive-npv-of-1000-at-12-the-npv-is-800-what-is-the-approximate-irr |
At a discount rate of 5% a project has a positive NPV of $1,000; at 12% the NPV is -$800.
What is the approximate IRR?
Answer:
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| 2020-06-29 14:13:13 | What are the three types of risk that can arise from currency movements in international trade or investment? | what-are-the-three-types-of-risk-that-can-arise-from-currency-movements-in-international-trade-or-investment |
What are the three types of risk that can arise from currency movements in international trade or investment?
Answer:
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| 2020-06-29 14:13:28 | What is a forward exchange contract? | what-is-a-forward-exchange-contract | What is a forward exchange contract? Answer: A forward contract is a contract to exchange an agreed amount of currency at an agreed date in the future and an agreed exchange rate. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:13:48 | What is a currency option? | what-is-a-currency-option | What is a currency option? Answer: Currency options give their owner the right, but not the obligation, to buy or sell currency at an agreed price. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:14:06 | If an option is allowed to lapse then the option premium is repaid. | if-an-option-is-allowed-to-lapse-then-the-option-premium-is-repaid | Is the following statement true or false? If an option is allowed to lapse then the option premium is repaid. Answer: False. It’s like car insurance: the premium is not repaid even if you make no claim. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:15:02 | What is a forward rate agreement (FRA)? | what-is-a-forward-rate-agreement-fra-2 | What is a forward rate agreement (FRA)? Answer: Forward rate agreements (FRAs) allow a borrower or depositor to fix a n interest rate for a period in the future eg starting in 6 months and ending after 12 months. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:15:48 | What are interest rate futures? | what-are-interest-rate-futures | What are interest rate futures? Answer: These are traded on futures market. They are derivatives whose value depends on the interest rate. By arranging to buy or sell future contracts, profits can be made on the contracts that will largely compensate for any losses made on interest rate movements. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-06-29 14:16:28 | What are interest rate options? | what-are-interest-rate-options | What are interest rate options? Answer: These are options to buy or sell interest rate futures and allow borrowers or depositors to enjoy favourable interest rate movements whilst protecting themselves against adverse movements. Upfront non-returnable premiums have to be paid to acquire the options that provide this protection. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 13:54:45 | Convertible debt - initial liability measurement | convertible-debt-initial-liability-measurement | How is the initial liability calculated in a convertible debt instrument? Answer: The liability is calculated as the present value of the future cash flows, assuming that the debt is a 100% debt instrument, i.e. no conversion option. The cash flows are the annual coupon payments plus the redemption amount. These are then discounted at the rate of interest on similar debt without the conversion option. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 14:50:00 | Financial assets (1) | financial-assets-1 |
How are financial assets classified?
Answer:
Financial assets are measured at either:
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| 2020-09-25 14:51:47 | Financial assets (2) | financial-assets-2 | How are financial assets initially measured? Answer: Financial assets are initially measured at fair value PLUS transaction costs, unless held at FVTPL where they are recognised immediately through profit or loss. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 14:52:56 | Financial liabilities (1) | financial-liabilities-1 | How are financial liabilities initially measured? Answer: Financial liabilities are initially measured at fair value LESS transaction costs. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 14:56:01 | Financial assets (3) | financial-assets-3 | When can an entity measure a financial asset using amortised cost? Answer: A financial asset can be measured at amortised cost when it fulfills BOTH the business model test and cash flow characteristics test. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 14:58:24 | Foreign currency (1) | foreign-currency-1 | Where are gains and losses on translation of a monetary item at the reporting date recognised. Answer: Gains/losses on translation of a monetary item are recognised through profit or loss. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 14:59:58 | Foreign currency (2) | foreign-currency-2 | What exchange rate is used to translate monetary assets/liabilities at the reporting date? Answer: Monetary assets/liabilities are translated at the reporting date using the closing rate. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:02:38 | Agriculture (1) | agriculture-1 | What is a biological asset? Answer: A biological asset is a living plant or animal. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:05:44 | Agriculture (2) | agriculture-2 | How are biological assets measured? Answer: Biological assets are measured at fair value less costs to sell. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:08:16 | IAS 12 (1) | ias-12-1 | What figure is shown under current liabilities for tax payable on the statement of financial position? Answer: The tax payable figure is the estimate of tax at the reporting date. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:10:47 | IAS 12 (2) | ias-12-2 |
How is the income tax expense figure calculated on the statement of profit or loss?
Answer:
The income tax is made up of the following:
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| 2020-09-25 15:12:19 | IAS 12 (3) | ias-12-3 | When is a deferred tax liability recognised? Answer: A deferred tax liability it recongised when the carrying value is greater than the tax base. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:15:49 | Limitations of financial statements | limitations-of-financial-statements |
What are the limitations of financial statements?
Answer:
The limitations of financial statements are as follows:
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| 2020-09-25 15:19:28 | Right-of-use asset and depreciation | right-of-use-asset-and-depreciation | Over what period of time should a right-of-use asset be depreciated? Answer: A right-of-use asset is depreciated over the shorter of the lease term and the useful life of the asset. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:20:53 | Lease incentive | lease-incentive | How is a lease incentive accounted for within the financial statements? Answer: A lease incentive is deducted from the initial measurement of the asset. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:22:51 | IAS 2 (1) | ias-2-1 | How are fixed overheads allocated to the cost of an item of inventory? Answer: Fixed overheads are allocated on the basis of normal/budgeted capacity. This is the capacity that is expected to be achieved based on the average over several years. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:24:06 | IAS 2 (2) | ias-2-2 | How are variable overheads allocated to an item of inventory? Answer: Variable overheads are allocated based on the actual level of production. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:28:34 | IAS 12 (4) | ias-12-4 | Where is the taxation on the revaluation of PPE recognised? Answer: The gain on revaluation of PPE is recognised through other comprehensive income and the associated tax is also recognised through other comprehensive. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-09-25 15:37:37 | Foreign currency (3) | foreign-currency-3 | Do goods purchased (inventory) in a currency different to the functional currency need to be retranslated at the reporting date? Answer: No. Inventory is a non-monetary item and non-monetary items are not re-translated at the reporting date. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:29:45 | What are the three attributes of faithful representation? | what-are-the-three-attributes-of-faithful-representation |
What are the three attributes of faithful representation?
Answer:
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| 2020-12-14 15:31:06 | In what circumstances should liabilities be recognised, according to the Framework? | in-what-circumstances-should-liabilities-be-recognised-according-to-the-framework |
In what circumstances should liabilities be recognised, according to the Framework?
Answer:
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| 2020-12-14 15:32:05 | How should fair value be determined for non-financial assets (e.g., investment properties)? | how-should-fair-value-be-determined-for-non-financial-assets-e-g-investment-properties | How should fair value be determined for non-financial assets (e.g., investment properties)? Answer: Highest and best use if: - Physically possible - Legally permissible - Financially feasible | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:32:29 | If directors have a profit-related bonus, what ethical threat does this represent? | if-directors-have-a-profit-related-bonus-what-ethical-threat-does-this-represent | If directors have a profit-related bonus, what ethical threat does this represent? Answer: Self-interest. More interested in maximising profits than in fair presentation. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:32:47 | Identify three circumstances when gains recognised in OCI are later recycled to P&L? | identify-three-circumstances-when-gains-recognised-in-oci-are-later-recycled-to-pl | Identify three circumstances when gains recognised in OCI are later recycled to P&L? Answer: Cash flow hedges Disposal of foreign subsidiary (exchange gains) Disposal of bonds (NOT shares) classed as FVOCI | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:33:05 | What are the key components of a discontinued operation? | what-are-the-key-components-of-a-discontinued-operation | What are the key components of a discontinued operation? Answer: Separate major line of business Already discontinued or held for sale at the SOFP date | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:33:29 | What is the accounting treatment of a change in depreciation rate? | what-is-the-accounting-treatment-of-a-change-in-depreciation-rate | What is the accounting treatment of a change in depreciation rate? Answer: Change in estimate not policy Account for prospectively No prior period adjustment | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:33:53 | What is a performance obligation? | what-is-a-performance-obligation | What is a performance obligation? Answer: A DISTINCT obligation (i.e., sold separately) to transfer goods or services | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:36:32 | In revenue recognition how should the transaction price be allocated to separate performance obligations? | in-revenue-recognition-how-should-the-transaction-price-be-allocated-to-separate-performance-obligations | In revenue recognition how should the transaction price be allocated to separate performance obligations? Answer: On the basis of STAND-ALONE selling prices | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:36:46 | A company buys a building which it intends to use as a hotel. Can it classify it as an investment property? | a-company-buys-a-building-which-it-intends-to-use-as-a-hotel-can-it-classify-it-as-an-investment-property | A company buys a building which it intends to use as a hotel. Can it classify it as an investment property? Answer: No Providing significant non-incidental services, e.g., catering Classify as PPE | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:37:04 | What is the accounting treatment if PPE is transferred to IP? The company uses historic cost for PPE and fair value for IP. Prices are rising. | what-is-the-accounting-treatment-if-ppe-is-transferred-to-ip-the-company-uses-historic-cost-for-ppe-and-fair-value-for-ip-prices-are-rising | What is the accounting treatment if PPE is transferred to IP? The company uses historic cost for PPE and fair value for IP. Prices are rising. Answer: Revalue the asset to FV Gain to OCI Reclassify the asset to IP Subsequent gains to P&L | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:37:37 | In what circumstances is an intangible asset ‘identifiable’? | in-what-circumstances-is-an-intangible-asset-identifiable | In what circumstances is an intangible asset ‘identifiable’? Answer: Separable (can be sold separately) OR Arises from legal or contractual rights | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:39:17 | Define cash-generating unit | define-cash-generating-unit | Define cash-generating unit Answer: Smallest group of assets that generates independent cash flows | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:39:34 | In what order should losses be allocated to cash-generating units? | in-what-order-should-losses-be-allocated-to-cash-generating-units | In what order should losses be allocated to cash-generating units? Answer: 1. Assets obviously impaired 2. Goodwill 3. Other non-current assets | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:39:55 | A company buys inventory from a foreign country on credit. | a-company-buys-inventory-from-a-foreign-country-on-credit | A company buys inventory from a foreign country on credit. At the SOFP date, how should the inventory and payable be translated? Answer: Inventory: - Historic rate if valued at cost - Closing rate if valued at NRV Payable – Closing rate | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:40:17 | What are the primary factors in determining functional currency? | what-are-the-primary-factors-in-determining-functional-currency | What are the primary factors in determining functional currency? Answer: Currency influencing sales price Currency influencing labour and material costs | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:40:41 | How should the lessor reflect a finance lease in the financial statements? | how-should-the-lessor-reflect-a-finance-lease-in-the-financial-statements | How should the lessor reflect a finance lease in the financial statements? Answer: SFP Receivable P&L Finance income | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:40:58 | A company sells PPE with a life of 50 years, and rents it back for 10 years? How will this be accounted for? | a-company-sells-ppe-with-a-life-of-50-years-and-rents-it-back-for-10-years-how-will-this-be-accounted-for | A company sells PPE with a life of 50 years, and rents it back for 10 years? How will this be accounted for? Answer: SFP Derecognise PPE Recognise Right of Use asset, Cash, and Lease liability P&L Profit (or loss) on derecognition of PPE (‘part-disposal) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:41:15 | What are the main items recognised in the P&L for a defined benefit pension scheme? | what-are-the-main-items-recognised-in-the-pl-for-a-defined-benefit-pension-scheme | What are the main items recognised in the P&L for a defined benefit pension scheme? Answer: Service cost Net interest cost | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:41:30 | What is the main item recognised in OCI for a defined benefit pension scheme? | what-is-the-main-item-recognised-in-oci-for-a-defined-benefit-pension-scheme | What is the main item recognised in OCI for a defined benefit pension scheme? Answer: Remeasurement difference / actuarial difference | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:41:43 | How do you account for share based pay where the employee has the choice of shares or cash? | how-do-you-account-for-share-based-pay-where-the-employee-has-the-choice-of-shares-or-cash | How do you account for share based pay where the employee has the choice of shares or cash? Answer: Split accounting Liability and equity Similar to convertible loan | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:41:59 | Define an adjusting subsequent event. | define-an-adjusting-subsequent-event | Define an adjusting subsequent event. Answer: Event between SOFP date and date FS are approved Gives evidence on condition that existed at the SOFP date | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:42:13 | In the context of derivatives, what is an executory contract and how would it be accounted for? | in-the-context-of-derivatives-what-is-an-executory-contract-and-how-would-it-be-accounted-for | In the context of derivatives, what is an executory contract and how would it be accounted for? Answer: Not settled in cash, e.g., contract to buy wheat settled in wheat. Outside scope of IFRS 9 No accounting until wheat is actually purchased | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:42:28 | A company buys an investment property financed by a loan. What is the accounting? (The company prefers to use the fair value model) | a-company-buys-an-investment-property-financed-by-a-loan-what-is-the-accounting-the-company-prefers-to-use-the-fair-value-model | A company buys an investment property financed by a loan. What is the accounting? (The company prefers to use the fair value model) Answer: IP – fair value, gains to P&L Financial liability – fair value, gains to P&L (Note – using amortised cost would create an ‘accounting mismatch’) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:42:43 | How should a company account for doubtful debts for trade receivables? | how-should-a-company-account-for-doubtful-debts-for-trade-receivables | How should a company account for doubtful debts for trade receivables? Answer: Lifetime expected credit losses (Note – 3 stage model is not used for most receivables; it is more relevant to bonds etc) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:42:59 | A company revalues PPE upwards by $1,000. Tax rate is 20%. The gain will be taxed when the asset is sold. What is the deferred tax implication? | a-company-revalues-ppe-upwards-by-1000-tax-rate-is-20-the-gain-will-be-taxed-when-the-asset-is-sold-what-is-the-deferred-tax-implication | A company revalues PPE upwards by $1,000. Tax rate is 20%. The gain will be taxed when the asset is sold. What is the deferred tax implication? Answer: Temp difference = 1,000 X 20% = 200 Dr OCI Cr DT liability | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:43:33 | A company sets up reorganisation provision of $1,000. Tax rate is 20%. | a-company-sets-up-reorganisation-provision-of-1000-tax-rate-is-20 | A company sets up reorganisation provision of $1,000. Tax rate is 20%. The expense will be allowed for tax only when the reorganisation actually takes place. What is the deferred tax implication? Answer: Temp difference = 1,000 X 20% = 200 Dr DT asset Cr P&L | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:44:19 | A parent company revalues the PPE of a subsidiary upwards by | a-parent-company-revalues-the-ppe-of-a-subsidiary-upwards-by | A parent company revalues the PPE of a subsidiary upwards by $1,000 as part of the fair value exercise in calculating goodwill. Tax rate is 20%. The gain will be taxed when the asset is sold. What is the deferred tax implication? Answer: Temp difference = 1,000 X 20% = 200 Dr Goodwill Cr DT liability | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:44:38 | What are the quantitative thresholds for disclosure under IFRS 8, Segmental Reporting? | what-are-the-quantitative-thresholds-for-disclosure-under-ifrs-8-segmental-reporting | What are the quantitative thresholds for disclosure under IFRS 8, Segmental Reporting? Answer: 1. TOTAL revenue greater than or equal to 10% of aggregate TOTAL revenue 2. TOTAL assets greater than or equal to 10% of aggregate TOTAL assets 3. Profit or loss is greater than or equal to the greater of: (a) TOTAL profits of all segments making a profit (b) TOTAL losses of all segments making a loss | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:44:56 | How would you refer to a transaction involving the husband of a company director under IAS 24? | how-would-you-refer-to-a-transaction-involving-the-husband-of-a-company-director-under-ias-24 | How would you refer to a transaction involving the husband of a company director under IAS 24? Answer: Transaction with CLOSE FAMILY of KEY MANAGEMENT | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:45:16 | For SMEs what is the accounting treatment of borrowing costs? | for-smes-what-is-the-accounting-treatment-of-borrowing-costs | For SMEs what is the accounting treatment of borrowing costs? Answer: Expense in the P&L (even constructed assets where large companies would capitalise the borrowing cost) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:45:35 | A company owns 30% of another company. What are the possibilities for accounting? | a-company-owns-30-of-another-company-what-are-the-possibilities-for-accounting | A company owns 30% of another company. What are the possibilities for accounting? Answer: FV through OCI if no significant influence Equity account if significant influence or joint control Consolidate if control Remember to consider the substance of the transaction rather than the % shareholding. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:46:01 | How does IFRS 10 define control? | how-does-ifrs-10-define-control | How does IFRS 10 define control? Answer: Investor has power over investee AND is exposed to variable returns from investee AND has ability to affect the returns | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:46:25 | What is required for a ‘business’ and why is it relevant for group accounts? | what-is-required-for-a-business-and-why-is-it-relevant-for-group-accounts | What is required for a ‘business’ and why is it relevant for group accounts? Answer: Input + Process + Outputs Relevance – we consolidate subsidiaries only if they meet the definition of a business. If a company holds only a single asset, the transaction may well be regarded as an asset purchase rather than a business combination. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:46:41 | In calculating goodwill how would deal with a legal claim against a subsidiary which is regarded as possible? | in-calculating-goodwill-how-would-deal-with-a-legal-claim-against-a-subsidiary-which-is-regarded-as-possible | In calculating goodwill how would deal with a legal claim against a subsidiary which is regarded as possible? Answer: Contingent liabilities must be measured at FV irrespective of probability. Remember that the rules for goodwill calculation are different to the IAS 37 rules. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:46:59 | How are DB pension plans dealt with in the operating section of a cash flow statement? | how-are-db-pension-plans-dealt-with-in-the-operating-section-of-a-cash-flow-statement | How are DB pension plans dealt with in the operating section of a cash flow statement? Answer: 1. Add back service costs (non-cash items) 2. Deduct contributions paid | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:47:15 | Define receivable days | define-receivable-days | Define receivable days Answer: Receivables / Credit sales x 365 | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:47:31 | Define PE ratio | define-pe-ratio | Define PE ratio Answer: Current share price / EPS | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:48:04 | Define Free Cash Flow | define-free-cash-flow | Define Free Cash Flow Answer: Cash flows from operating activities less capital expenditure | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:48:19 | Which body publishes standards on sustainability reporting? | which-body-publishes-standards-on-sustainability-reporting | Which body publishes standards on sustainability reporting? Answer: Global Reporting Initiative | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:48:33 | How should a cryptocurrency be recognised in the SOFP? | how-should-a-cryptocurrency-be-recognised-in-the-sofp | How should a cryptocurrency be recognised in the SOFP? Answer: Intangible asset | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:48:47 | What are three characteristics of materiality? | what-are-three-characteristics-of-materiality | What are three characteristics of materiality? Answer: Omission of information would influence economic decisions of users Mis-statement of information would influence economic decisions of users Obscuring information would influence economic decisions of users | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:49:00 | Which method of cash flow preparation is preferred by IAS 7 and by accounts preparers? Why? | which-method-of-cash-flow-preparation-is-preferred-by-ias-7-and-by-accounts-preparers-why | Which method of cash flow preparation is preferred by IAS 7 and by accounts preparers? Why? Answer: IAS 7 – direct – gives users additional information Accounts preparers – indirect – easy to prepare | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:49:15 | How would a revaluation of PPE (upwards) affect ROCE? | how-would-a-revaluation-of-ppe-upwards-affect-roce | How would a revaluation of PPE (upwards) affect ROCE? Answer: PBIT – down – extra depreciation CE – up – revaluation reserve recognised Therefore, ROCE down. | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:49:39 | How should goodwill be translated for a foreign subsidiary? | how-should-goodwill-be-translated-for-a-foreign-subsidiary | How should goodwill be translated for a foreign subsidiary? Answer: Closing rate Carrying amount of goodwill will change every year | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:49:53 | What is a market-based condition (in the context of share-based pay) and what is its relevance? | what-is-a-market-based-condition-in-the-context-of-share-based-pay-and-what-is-its-relevance | What is a market-based condition (in the context of share-based pay) and what is its relevance? Answer: Condition linked to the market price of company shares Ignore in computation of the P&L charge | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:50:07 | A company sells PPE with a life of 50 years, and rents it back for 50 years? How will this be accounted for and why? | a-company-sells-ppe-with-a-life-of-50-years-and-rents-it-back-for-50-years-how-will-this-be-accounted-for-and-why | A company sells PPE with a life of 50 years, and rents it back for 50 years? How will this be accounted for and why? Answer: SFP Do not derecognise PPE Recognise liability Why? Unlikely to be a sale / transfer of risks and rewards In substance this is a secured loan | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:50:21 | How should a subsequent event which is non-adjusting but will cause the entity to cease trading be dealt with in FS? | how-should-a-subsequent-event-which-is-non-adjusting-but-will-cause-the-entity-to-cease-trading-be-dealt-with-in-fs | How should a subsequent event which is non-adjusting but will cause the entity to cease trading be dealt with in FS? Answer: The FS should be adjusted (break-up basis) | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:50:38 | In what circumstances can financial assets and liabilities be offset? | in-what-circumstances-can-financial-assets-and-liabilities-be-offset | In what circumstances can financial assets and liabilities be offset? Answer: Legally enforceable right to offset AND Intention to settle on a net basis | ||||||||||||||||||||||||||||||||||||||||||
| 2020-12-14 15:50:52 | Define a financial asset. | define-a-financial-asset | Define a financial asset. Answer: Equity investment in another entity OR Contractual right to receive cash | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-11 10:06:03 | What are the 3 different categories of Total Income included on | what-are-the-3-different-categories-of-total-income-included-on | What are the 3 different categories of Total Income included on the Income Tax Computation and what is the purpose of this analysis? Answer: Non Savings Income, Savings Income and Dividend Income. The purpose of this analysis is to know the correct rate(s) of tax to apply to each part of the Taxable Income of the taxpayer. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-11 10:06:50 | Name the sources of income included in each category | name-the-sources-of-income-included-in-each-category | Name the sources of income included in each category Answer: Non Savings Income is made up of Employment Income, Trading Income, Pensions and Property Income. Savings income is interest income and dividend income is of course dividends received from companies. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-11 10:08:24 | What is the basis of assessment for employment income | what-is-the-basis-of-assessment-for-employment-income | What is the basis of assessment for employment income Answer: Employment Income is assessed on the basis of actual amounts received , with the received date being taken as the earlier of the date when the taxpayer became entitled to the income or the date of actual receipt. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:13:47 | What is the basis of assessment for a continuing source of trading income | what-is-the-basis-of-assessment-for-a-continuing-source-of-trading-income | What is the basis of assessment for a continuing source of trading income Answer: Current Year Basis (CYB) where the adjusted trading profit of the business to be assessed in any tax year is that of the Accounting Year ended in the tax year of assessment. Note – the bases of assessment that apply in the opening years of a new business and the closing years of an old business ceasing to trade must also be learned. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:16:48 | What is the normal basis of assessment to apply to property income and what option is available to the taxpayer and when is that option compulsory | what-is-the-normal-basis-of-assessment-to-apply-to-property-income-and-what-option-is-available-to-the-taxpayer-and-when-is-that-option-compulsory | What is the normal basis of assessment to apply to property income and what option is available to the taxpayer and when is that option compulsory Answer: A cash basis - a taxpayer may choose to use the accruals basis but must use the accruals basis where property income receipts exceed £150,000. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:17:19 | What basis of assessment applies to interest income | what-basis-of-assessment-applies-to-interest-income | What basis of assessment applies to interest income Answer: Actual amounts received in the tax year. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:17:40 | What basis of assessment applies to dividend income. | what-basis-of-assessment-applies-to-dividend-income | What basis of assessment applies to dividend income. Answer: Actual amounts received in the tax year. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:17:58 | What deductions are made from Total Income to compute Net Income | what-deductions-are-made-from-total-income-to-compute-net-income | What deductions are made from Total Income to compute Net Income Answer: Allowable loan interest payments and certain loss reliefs | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:18:24 | What is the difference between Net Income and Taxable Income | what-is-the-difference-between-net-income-and-taxable-income | What is the difference between Net Income and Taxable Income Answer: The Personal Allowance is deducted from Net Income to derive the figure of Taxable Income. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:18:42 | In what order are the deductions from both Total and Net Income deducted | in-what-order-are-the-deductions-from-both-total-and-net-income-deducted | In what order are the deductions from both Total and Net Income deducted Answer: The deductions should be made in the following order – from Non Savings income, Savings income and finally Dividend income | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:19:13 | What types of interest income are exempt from Income Tax | what-types-of-interest-income-are-exempt-from-income-tax | What types of interest income are exempt from Income Tax Answer: Interest income from National Savings & Investment certificates and from an ISA | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:19:34 | In what order are the categories of Taxable Income charged to Income Tax | in-what-order-are-the-categories-of-taxable-income-charged-to-income-tax | In what order are the categories of Taxable Income charged to Income Tax Answer: Non Savings Income, followed by Savings Income and then Dividend Income | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:20:00 | What is the difference between Tax Liability and Tax Payable | what-is-the-difference-between-tax-liability-and-tax-payable | What is the difference between Tax Liability and Tax Payable Answer: Income tax deducted under the PAYE system is deducted from Tax Liability to derive Tax Payable | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:20:34 | How do you calculate the adjusted net income (ANI) of the taxpayer | how-do-you-calculate-the-adjusted-net-income-ani-of-the-taxpayer | How do you calculate the adjusted net income (ANI) of the taxpayer Answer: It is the Net Income of the taxpayer from the Income Tax computation reduced by the gross amount of both personal pension contributions and gift aid payments made by the taxpayer. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:21:14 | Why is ANI computed | why-is-ani-computed | Why is ANI computed Answer: If ANI exceeds £100,000 then the PA of the taxpayer is reduced by 50% of the excess , such that when ANI exceeds £125,140 the PA is reduced to nil . | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:22:06 | What is the tax treatment of a gift aid payment in preparing the Income Tax computation | what-is-the-tax-treatment-of-a-gift-aid-payment-in-preparing-the-income-tax-computation | What is the tax treatment of a gift aid payment in preparing the Income Tax computation A gift aid payment is not included on the Income Tax computation of the taxpayer, but the gross amount of any gift aid payments made in the tax year are deducted in deriving the adjusted net income of the taxpayer and will also serve to extend the basic rate and higher rate bands of tax in the calculation of the Tax Liability of the taxpayer. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:23:11 | Are pension contributions paid by an individual treated the same way for tax purposes as gift aid payments | are-pension-contributions-paid-by-an-individual-treated-the-same-way-for-tax-purposes-as-gift-aid-payments | Are pension contributions paid by an individual treated the same way for tax purposes as gift aid payments Answer: Only personal pension contributions are treated the same way as gift aid payments. Payments into an occupational Pension scheme are deducted in computing the amount of employment income to include in the employment income assessment on the Income Tax computation. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:23:40 | If a husband and wife jointly own a property that is let out | if-a-husband-and-wife-jointly-own-a-property-that-is-let-out | If a husband and wife jointly own a property that is let out, how is the net property income treated on the income tax computations of the spouses Answer: The 50/50 rule applies and the net property income is split equally between the computations of the spouses. A joint election may however be made by the spouses to split the income according to the actual ownership of the property. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:24:13 | What is the tax treatment of mortgage (loan) interest paid by a taxpayer | what-is-the-tax-treatment-of-mortgage-loan-interest-paid-by-a-taxpayer | What is the tax treatment of mortgage (loan) interest paid by a taxpayer on a let property Answer: There is no tax relief for the interest payments against property income. Tax relief is instead given as a tax credit / reduction taken at the 20% basic rate of tax in computing the Tax Liability of the taxpayer – hence a finance expense charge of £3,000 in the 2021/22 tax year will reduce the Tax Liability by £600 (20% x £3,000) | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:25:45 | What conditions must be satisfied for a property to be treated as a furnished holiday letting | what-conditions-must-be-satisfied-for-a-property-to-be-treated-as-a-furnished-holiday-letting | What conditions must be satisfied for a property to be treated as a furnished holiday letting Answer: The lettings must be of UK or European Economic Area furnished accommodation made on a commercial basis with a view to the realisation of profit. In addition the following conditions must also be satisfied: (a) The accommodation must be available to let for at least 210 days in the tax year. (b) The accommodation must actually be let for at least 105 days in the year (c) No one person occupies the property for more than 31 consecutive days. If one or more persons do occupy the property for more than 31 consecutive days then these periods of long letting must not exceed 155 days in the year. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:26:19 | Explain how the transferrable amount of the PA of £1,250 | explain-how-the-transferrable-amount-of-the-pa-of-1250 | Explain how the transferrable amount of the PA of £1,260, given in the Tax Rates and Allowances information provided by the examiner applies and the circumstances in which it is available Answer: An election may be made to transfer a fixed amount of £1,260 of the PA to a spouse or civil partner and is only available when both taxpayers are either just basic rate taxpayers or non taxpayers. The relief is not given as an increase in the PA of the transferee but as a tax credit to be deducted in deriving the Tax Liability of the transferee taxpayer and is taken at the basic rate of tax 20% - for 2021/22, computed as £1,260 x 20% = £252. This amount can only reduce the tax liability, it cannot create a repayment. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:27:07 | In what circumstances would the election to transfer the transferrable amount | in-what-circumstances-would-the-election-to-transfer-the-transferrable-amount | In what circumstances would the election to transfer the transferrable amount of the PA be worthwhile and when must the election be made Answer: The election is only likely to be made when one spouse is a non taxpayer and has an amount of unused PA that would otherwise be wasted and the other spouse is a basic rate taxpayer . The election must be made within 4 years of the end of the tax year to which it should apply though if made within the tax year concerned the election will remain in force for future years until it is either withdrawn or the conditions are not met. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:28:07 | Describe what tax relief would be available if a trader paid | describe-what-tax-relief-would-be-available-if-a-trader-paid | Describe what tax relief would be available if a trader paid a premium when granted an 11 year lease on business premises. Answer: An annual deduction against trading income would be available in relation the premium paid, computed as the property income assessment on the lessor divided by the number of years of the lease. The rental payable in each accounting period would also be an allowable deduction against trading income. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:28:38 | Describe what capital allowances would be available if an unincorporated trader | describe-what-capital-allowances-would-be-available-if-an-unincorporated-trader | Describe what capital allowances would be available if an unincorporated trader commenced trading and bought 2 cars in the opening accounting period of 9 months, one to be used by an employee of the business and the other to be used by the business owner with both cars having a mix of business and private use Answer: Depending on the CO2 emissions of the car used by the employee , it will be allocated to either the main pool or special rate pool and a WDA of either 18% pa or 6% pa will be available – as these allowances are per annum the annual figure will be time apportioned to 9/12 of the annual amount irrespective of the date within the period when it was purchased. The car purchased for the business owner will have its own separate CA calculation with a WDA computed as above based on the CO2 emissions. The claim will then be limited to the level of business use. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:29:13 | An unincorporated trader has always been profitable and prepared accounts to 31 December | an-unincorporated-trader-has-always-been-profitable-and-prepared-accounts-to-31-december | An unincorporated trader has always been profitable and prepared accounts to 31 December in each year, but for the accounting year ended 31 December 2022 incurred an adjusted trading loss of £30,000. Explain the tax reliefs available to the trader in relation to the loss sustained Set off the loss against the total income of the current tax year (2022/23), and or the preceding tax year (2021/22) – no partial claims allowed. If a claim has firstly been made against the total income of a tax year and some loss still remains, then for that tax year a claim may also be made against the net gains of that tax year Any loss not utilised in the reliefs above will be carried forward to set off against the next available future trading profits of the same trade. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:29:40 | How should the adjusted trading profit or loss of a partnership be divided | how-should-the-adjusted-trading-profit-or-loss-of-a-partnership-be-divided | How should the adjusted trading profit or loss of a partnership be divided between the partners of a partnership. Answer: According to the profit sharing agreement in force during the accounting period in which the trading profit or loss was made. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:30:12 | How should each partner’s share of adjusted trading profit then be assessed on the partners. | how-should-each-partners-share-of-adjusted-trading-profit-then-be-assessed-on-the-partners | How should each partner’s share of adjusted trading profit then be assessed on the partners. Answer: If a partner is a continuing partner then the normal CYB of assessment will apply. If a new partner joins the partnership then the opening years bases of assessment will apply for that partner using the date the partner joined the partnership as his / her start date. If a partner leaves the partnership then the closing years bases of assessment will apply for that partner using the date the partner leaves the partnership as his / her cessation date. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:44:54 | If an employee has the use of job related accommodation what assessable benefit arises in relation to the property | if-an-employee-has-the-use-of-job-related-accommodation-what-assessable-benefit-arises-in-relation-to-the-property | If an employee has the use of job related accommodation what assessable benefit arises in relation to the property Answer: There is no taxable benefit if the accommodation is job-related | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:45:25 | What is job related accommodation | what-is-job-related-accommodation | What is job related accommodation Answer: Where the accommodation is necessary for the proper performance of the employee’s duties (e.g. a caretaker); or It is for the better performance of the employee’s duties and (for that type of employment) it is customary for employers to provide living accommodation (e.g. hotel-worker); or Where there is a special threat to the employee’s security and he resides in the accommodation as part of special security arrangements | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:45:50 | What information about a car is needed to be able to determine the assessable benefit | what-information-about-a-car-is-needed-to-be-able-to-determine-the-assessable-benefit | What information about a car is needed to be able to determine the assessable benefit on the employee when the car is provided to them by the employer Answer: In computing the assessable benefit for each car it is necessary to know the level of CO2 emissions , if any, whether the car is petrol or diesel powered, the electric range of a hybrid car and the list price of the car. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:46:18 | What reduction is made to the assessable fuel benefit if the employee contributes towards the cost of fuel for private use. | what-reduction-is-made-to-the-assessable-fuel-benefit-if-the-employee-contributes-towards-the-cost-of-fuel-for-private-use | What reduction is made to the assessable fuel benefit if the employee contributes towards the cost of fuel for private use. Answer: No reduction is made if the employee contributes towards the cost of fuel for private use. If an employee fully reimburses the employer for all private mileage then no assessable benefit will arise | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:46:53 | If an employee is provided by an employer with the use of an asset | if-an-employee-is-provided-by-an-employer-with-the-use-of-an-asset | If an employee is provided by an employer with the use of an asset for which no specific rule already applies (like the specific rules for the use of a car or van) then what generic rule is applied to determine the assessable benefit Answer: 20% × market value of the asset when first provided for the private use of an employee | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:47:11 | What categories of NIC are payable by the self employed | what-categories-of-nic-are-payable-by-the-self-employed | What categories of NIC are payable by the self employed Answer: Class 2 and Class 4 NIC | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:47:26 | What categories of NIC are suffered by an employee | what-categories-of-nic-are-suffered-by-an-employee | What categories of NIC are suffered by an employee Answer: Class 1 Employee / Primary contributions | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:47:41 | What categories of NIC are suffered by employers | what-categories-of-nic-are-suffered-by-employers | What categories of NIC are suffered by employers Answer: Class 1 Employer / Secondary contributions and Class 1A contributions | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:48:05 | In what circumstances will an Annual Allowance (AA) Charge arise on a personal taxpayer | in-what-circumstances-will-an-annual-allowance-aa-charge-arise-on-a-personal-taxpayer | In what circumstances will an Annual Allowance (AA) Charge arise on a personal taxpayer Answer: Where tax relieved contributions are paid in excess of the AA limit (including any brought forward unused allowances), then there will be an AA charge. This charge is subject to income tax at a person’s marginal rate(s). | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 09:49:37 | In what circumstances must a chargeable gain be computed | in-what-circumstances-must-a-chargeable-gain-be-computed | In what circumstances must a chargeable gain be computed A chargeable gain arises when a chargeable person makes a chargeable disposal of a chargeable asset. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:13:43 | In what circumstances does a chargeable disposal arise for an individual | in-what-circumstances-does-a-chargeable-disposal-arise-for-an-individual | In what circumstances does a chargeable disposal arise for an individual Answer: A chargeable disposal arises on the sale of, the gift of, or the destruction or loss of a chargeable asset. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:14:19 | Explain how to deal with the CGT implications of a gift made by an individual of a chargeable asset | explain-how-to-deal-with-the-cgt-implications-of-a-gift-made-by-an-individual-of-a-chargeable-asset | Explain how to deal with the CGT implications of a gift made by an individual of a chargeable asset Answer: A gain must be computed based on the open market value of the asset at the date of disposal. The gain arising may then be deferred from immediate chargeability by a claim for gift relief if the asset / gift qualifies for gift relief. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:14:45 | If an individual has a mix of both gains and losses arising | if-an-individual-has-a-mix-of-both-gains-and-losses-arising | If an individual has a mix of both gains and losses arising in a tax year and also has unused capital losses brought forward from the previous tax year, show how the taxable gains for the current tax year would be computed. Answer: The gains and losses of the current tax year must be netted off, from which net gains the AEA will then firstly be deducted, followed by the deduction of the capital losses brought forward . | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:15:10 | What tax rates may apply to an individuals’ taxable gains | what-tax-rates-may-apply-to-an-individuals-taxable-gains | What tax rates may apply to an individuals’ taxable gains Answer: Assets qualifying for business asset disposal relief will always be taxed at 10% up to a maximum lifetime limit of £1m. Shares qualifying for investors’ relief will also be taxed at 10% but up to a maximum lifetime limit of £10m Residential property gains will be taxed at either 18% or 28% Gains on any other assets will be taxed at either 10% or 20% | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:15:42 | Capital losses and AEA are deducted from the gains made by a taxpayer in the tax year | capital-losses-and-aea-are-deducted-from-the-gains-made-by-a-taxpayer-in-the-tax-year | Capital losses and AEA are deducted from the gains made by a taxpayer in the tax year. In what order will these deductions be applied to ensure their optimal use. Answer: Deductions are made firstly against those gains taxable at the highest tax rates They will therefore be deducted from gains in the following order: (1) Gains on residential property (taxed at 18% and 28%) (2) Gains on other assets (taxed at 10% and 20%), and finally (3) Gains on assets qualifying for business asset disposal relief or investors’ relief taxed at 10% | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:15:59 | By what date must the CGT liability for the 2021/22 tax year be paid assuming no disposals of residential property | by-what-date-must-the-cgt-liability-for-the-2020-21-tax-year-be-paid-assuming-no-disposals-of-residential-property | By what date must the CGT liability for the 2021/22 tax year be paid assuming no disposals of residential property Answer: CGT is due in one amount on 31 January following the end of the tax year (for 2021/22 by 31 January 2023) | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:16:24 | When must a payment on account be made on the disposal of a residential property | when-must-a-payment-on-account-be-made-on-the-disposal-of-a-residential-property | When must a payment on account be made on the disposal of a residential property Answer: A payment on account, along with a return to HMRC, must be made within 30 days of the disposal of a residential property | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:16:54 | How is the payment on account calculated | how-is-the-payment-on-account-calculated | How is the payment on account calculated Answer: In computing the payment on account the following deductions should be made from the gain: • Any current tax year capital losses incurred prior to the property disposal • The AEA of the tax year • Any capital losses b/f at the start of the tax year It will also require an estimate of how much, if any, of the taxpayer’s basic rate band will be available for the tax year – this information will be provided in the exam. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:17:17 | Assuming a taxpayer made no disposals of residential property or assets qualifying for either | assuming-a-taxpayer-made-no-disposals-of-residential-property-or-assets-qualifying-for-either | Assuming a taxpayer made no disposals of residential property or assets qualifying for either business asset disposal relief or investors’ relief, how is the CGT liability calculated on the taxable gains Answer: Based on the taxpayers’ taxable income from their Income Tax Computation a CGT rate of 10% is applied on those taxable gains that fall into any remaining basic rate band (or extended basic rate band if the person makes gift aid donations or pays personal pension contributions). After considering a persons’ taxable income, a CGT rate of 20% is then applied on those gains in excess of the remaining basic rate band (or extended basic rate band). | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:17:44 | If an individual sells a chargeable asset to his daughter for half of its market value of | if-an-individual-sells-a-chargeable-asset-to-his-daughter-for-half-of-its-market-value-of | If an individual sells a chargeable asset to his daughter for half of its market value of £100,000, what disposal consideration if any should be used to compute any chargeable gain arising Answer: For CGT purposes the asset is transferred at its open market value of £100,000. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:18:07 | On what basis are chargeable assets transferred between spouses or civil partners | on-what-basis-are-chargeable-assets-transferred-between-spouses-or-civil-partners | On what basis are chargeable assets transferred between spouses or civil partners Answer: On a no gain / no loss basis which means at the transferor’s cost. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:18:28 | If a taxpayer disposes of 25% of a plot of land originally purchased at a total cost of | if-a-taxpayer-disposes-of-25-of-a-plot-of-land-originally-purchased-at-a-total-cost-of | If a taxpayer disposes of 25% of a plot of land originally purchased at a total cost of £120,000, how do you calculate the allowable cost to be used in the calculation of any chargeable gain arising Answer: The allowable cost will be computed by taking the following proportion of the original total allowable cost of the plot of land: Sale Proceeds / Sale Proceeds + Value of remaining part of land | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:18:53 | How would you compute a chargeable gain arising on a disposal of a painting for sale proceeds of £7,500 | how-would-you-compute-a-chargeable-gain-arising-on-a-disposal-of-a-painting-for-sale-proceeds-of-7500 | How would you compute a chargeable gain arising on a disposal of a painting for sale proceeds of £7,500 Answer: A painting is a chattel and if the cost of the painting was less than £6,000 , then in addition to the normal gains computation a maximum gain figure would also be computed using the following calculation: (sale proceeds - £6,000) x 5/3 | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:19:24 | When an individual disposes of shares in a company what is the order in which the shares sold are matched with acquisitions. | when-an-individual-disposes-of-shares-in-a-company-what-is-the-order-in-which-the-shares-sold-are-matched-with-acquisitions | When an individual disposes of shares in a company what is the order in which the shares sold are matched with acquisitions. Answer: When shares in a company are disposed of, they are matched against acquisitions of shares in that company in the following order: • Shares acquired on the same day (as the sale) • Shares acquired within the 30 days following the sale • Shares from the share pool | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:19:46 | When an individual sells shares in a company what conditions need to be satisfied for the sale to qualify for business asset disposal relief | when-an-individual-sells-shares-in-a-company-what-conditions-need-to-be-satisfied-for-the-sale-to-qualify-for-business-asset-disposal-relief | When an individual sells shares in a company what conditions need to be satisfied for the sale to qualify for business asset disposal relief Answer: The disposal of shares must be in a trading company where the individual has at least a 5% shareholding in the company and is also an employee (part time or full time) of the company for the 24 months prior to disposal. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:20:34 | When an individual sells shares in a company what conditions need to be satisfied for the sale to qualify for investors’ relief | when-an-individual-sells-shares-in-a-company-what-conditions-need-to-be-satisfied-for-the-sale-to-qualify-for-investors-relief | When an individual sells shares in a company what conditions need to be satisfied for the sale to qualify for investors’ relief Answer: Qualifying shares must have been subscribed for by the individual on or after 17 March 2016 in an unquoted trading company and held for a minimum period of 3 years since 6 April 2016. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:20:57 | When land and buildings are sold at a gain by a business what conditions must be satisfied for the gain to be fully deferred by a claim for rollover relief | when-land-and-buildings-are-sold-at-a-gain-by-a-business-what-conditions-must-be-satisfied-for-the-gain-to-be-fully-deferred-by-a-claim-for-rollover-relief | When land and buildings are sold at a gain by a business what conditions must be satisfied for the gain to be fully deferred by a claim for rollover relief Answer: The land and buildings sold must have been used in the business and the full sale proceeds must be reinvested in another qualifying business asset. The replacement asset must be bought in the period 12 months before to 36 months after the disposal of the old asset. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:21:26 | How is the gain deferred on a claim for rollover relief | how-is-the-gain-deferred-on-a-claim-for-rollover-relief | How is the gain deferred on a claim for rollover relief Answer: The gain is deferred by deducting it from the cost of the newly acquired replacement asset which results in a larger gain then arising on the eventual sale of the replacement asset. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:21:51 | What would happen if the replacement asset was fixed plant and machinery to be used in the trade | what-would-happen-if-the-replacement-asset-was-fixed-plant-and-machinery-to-be-used-in-the-trade | What would happen if the replacement asset was fixed plant and machinery to be used in the trade Answer: The new asset is a depreciating asset . The gain deferred is not deducted from the cost of the new asset but is instead postponed until the earliest of: •disposal of the new asset •the date the new asset ceases to be used in the trade • 10 years after the new asset was acquired. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:23:28 | What assets qualify for gift relief when an individual makes a gift of that asset | what-assets-qualify-for-gift-relief-when-an-individual-makes-a-gift-of-that-asset |
What assets qualify for gift relief when an individual makes a gift of that asset
Answer:
Gift relief may be claimed on the gift of the following assets:
Business assets used in the trade of:
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| 2021-08-19 11:24:15 | When an individual sells his / her private residence, what periods of non-occupation of the | when-an-individual-sells-his-her-private-residence-what-periods-of-non-occupation-of-the | When an individual sells his / her private residence, what periods of non-occupation of the property will be treated as deemed occupation for purposes of private residence relief Answer: The following periods of absence are deemed to be full occupation: (a) Last 9 months - if the property was the individuals main residence at some point in time (b) Any periods during which the individual was required by his employment to live abroad (c) Any period up to four years during which the individual is required to live elsewhere in the UK due to employment or self employment (d) Up to three years for any reason . | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:24:39 | In what circumstances will IHT become chargeable | in-what-circumstances-will-iht-become-chargeable | In what circumstances will IHT become chargeable Answer: IHT will become chargeable in lifetime if an individual makes a chargeable lifetime transfer ie a transfer of value into a trust, and on death when lifetime transfers made within 7 years of the date of death become chargeable along with the chargeable estate. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:25:11 | How do you compute a transfer of value | how-do-you-compute-a-transfer-of-value | How do you compute a transfer of value Answer: A transfer of value is a gift made by an individual and is calculated as the loss to the estate of the donor – the difference in the value of the estate before the transfer and after the transfer. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:26:12 | What rates of IHT may be chargeable on the death estate | what-rates-of-iht-may-be-chargeable-on-the-death-estate | What rates of IHT may be chargeable on the death estate Answer: If the lifetime transfers made in the 7 years before the date of death do not exceed the nil rate band, then the remaining amount of the nil rate band will be available and may have been increased by any unused nil rate band transferred to the individual following the earlier death of a spouse or civil partner. The residence nil rate band is also available where a “main” residence is held within the death estate and is inherited by direct descendants (children / grandchildren). The remainder of the estate will be chargeable at a rate of 40% . | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:26:53 | In what circumstances can an IHT charge of 40% made on a lifetime transfer made within 7 | in-what-circumstances-can-an-iht-charge-of-40-made-on-a-lifetime-transfer-made-within-7 | In what circumstances can an IHT charge of 40% made on a lifetime transfer made within 7 years of the death of the taxpayer be reduced Answer: If a lifetime transfer chargeable on death is more than 3 years before the date of death of the taxpayer, any tax charge will be reduced by taper relief. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:27:17 | What rate of tax above the nil rate band is chargeable on a transfer of value made in lifetime into a discretionary trust and who pays the tax where n | what-rate-of-tax-above-the-nil-rate-band-is-chargeable-on-a-transfer-of-value-made-in-lifetime-into-a-discretionary-trust-and-who-pays-the-tax-where-n | What rate of tax above the nil rate band is chargeable on a transfer of value made in lifetime into a discretionary trust and who pays the tax where no election has made by the trustees Answer: If no election has been made by the trustees to pay any IHT chargeable out of the trust, then the donor will be liable to pay the IHT and the IHT will be computed at a rate of 25% on the excess of the chargeable transfer above the available nil rate band. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:27:32 | What exemptions may be deducted from a lifetime transfer of value in computing the chargeable transfer figure | what-exemptions-may-be-deducted-from-a-lifetime-transfer-of-value-in-computing-the-chargeable-transfer-figure | What exemptions may be deducted from a lifetime transfer of value in computing the chargeable transfer figure Answer: Annual exemptions and Marriage exemptions | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:27:57 | What other exemptions are available to fully exempt a lifetime transfer | what-other-exemptions-are-available-to-fully-exempt-a-lifetime-transfer | What other exemptions are available to fully exempt a lifetime transfer Answer: In addition to the spouse / civil partner exemption available against both lifetime transfers and transfers on death, the following specific exemptions will apply against lifetime transfers: • Small gifts • Gifts for family maintenance • Normal expenditure out of income | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:28:22 | What are the CGT implications of a taxpayer making a gift in lifetime to his daughter | what-are-the-cgt-implications-of-a-taxpayer-making-a-gift-in-lifetime-to-his-daughter | What are the CGT implications of a taxpayer making a gift in lifetime to his daughter of half of his 60% shareholding in the unquoted trading company in which he has worked for several years. Answer: There will be an immediate CGT implication as the gift represents a chargeable disposal of a chargeable asset by a chargeable person and a gain must be computed based on the open market value of the 30% of shares being gifted. The gift will then be eligible for a gift relief claim, but if gift relief is not claimed or does not cover the full gain, any gain remaining chargeable may be eligible for business asset disposal relief | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 11:28:37 | What are the IHT implications of the above transfer | what-are-the-iht-implications-of-the-above-transfer | What are the IHT implications of the above transfer Answer: For IHT purposes the transfer will be a PET and computed as the difference in value between a 60% shareholding and a 30% shareholding. If the transferor dies within 7 years of this transfer it will become chargeable, but if the transferor lives for at least 3 years then any IHT chargeable will be reduced by the available taper relief | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:10:22 | What makes a company UK resident | what-makes-a-company-uk-resident | What makes a company UK resident Answer: A company is UK resident if it is either, (a) Incorporated in UK or (b) Centrally managed and controlled from UK | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:11:07 | What are the consequences of a company being treated as UK resident | what-are-the-consequences-of-a-company-being-treated-as-uk-resident | What are the consequences of a company being treated as UK resident Answer: A UK resident company is chargeable to UK corporation tax on its worldwide income and gains | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:11:24 | What is a company’s period of account | what-is-a-companys-period-of-account | What is a company’s period of account Answer: The period for which the company prepares its financial statements. This is normally a period of 12 months but may be either shorter or longer than 12 months | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:11:39 | What is a financial year in corporation tax and what is its purpose | what-is-a-financial-year-in-corporation-tax-and-what-is-its-purpose | What is a financial year in corporation tax and what is its purpose Answer: A Financial Year (FY) runs from 1 April to 31 March and is denoted by reference to the year in which it starts, hence FY 2020 runs from 1 April 2020 to 31 March 2021 and for which period the rate of corporation tax is set. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:11:56 | For what period is a corporation tax computation prepared | for-what-period-is-a-corporation-tax-computation-prepared | For what period is a corporation tax computation prepared Answer: A corporation tax computation is prepared for the Accounting Period of the company – this usually the same as the period of account but it cannot exceed 12 months, hence a long period of account (more than 12 months) must be split into two Accounting Periods, with corporation tax computations being prepared for firstly a 12 month period and then a second computation for the remaining period. Hence a 16 month period of account will require 2 corporation tax computations to be prepared, firstly for a 12 month period, followed by a separate computation for a 4 month period. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:12:33 | If a company is not large by when must it pay its corporation tax | if-a-company-is-not-large-by-when-must-it-pay-its-corporation-tax | If a company is not large by when must it pay its corporation tax Answer: A company must pay its corporation tax within 9 months and one day of the end of the Accounting Period | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:12:58 | How does a large company pay its corporation tax | how-does-a-large-company-pay-its-corporation-tax | How does a large company pay its corporation tax Answer: If a company was large in the previous Accounting Period (AP) and estimates that its “profits” will be large for the current period, then it is required to make quarterly instalment payments based on the estimated corporation tax liability of the period, the first such quarterly payment being made by the 14 th day of the 7th month from the start of the AP | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:13:26 | How do you determine if a company is large | how-do-you-determine-if-a-company-is-large | How do you determine if a company is large Answer: A large company is a company whose “profits” exceed £1.5M. “Profits” are defined as the TTP of the company plus dividends received ( excluding dividends from related 51% group companies). The limit of £1.5M is used for a single company with a 12 month AP . It is therefore divided by the number of related 51% group companies at the end of the immediately preceding accounting period and must also be time apportioned for an AP of less than 12 months. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:13:59 | When does an accounting period start | when-does-an-accounting-period-start | When does an accounting period start Answer: An AP will normally start immediately after the end of the preceding AP. An AP will also start when a company commences to trade. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:14:16 | When does an accounting period end | when-does-an-accounting-period-end | When does an accounting period end Answer: An AP will normally end twelve months after the beginning of the period or at the end of a company’s period of account. An AP will also end when a company ceases to trade. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:15:11 | What is included in the computation of “Total Profits” on the corporation tax computation | what-is-included-in-the-computation-of-total-profits-on-the-corporation-tax-computation | What is included in the computation of “Total Profits” on the corporation tax computation Answer: A company must include its worldwide income and gains . The main sources of income will be trading income, property income and interest income (remember that dividend income received by a company is exempt from corporation tax). | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:15:32 | What is the difference between “Total Profits” and “Taxable Total Profits” | what-is-the-difference-between-total-profits-and-taxable-total-profits | What is the difference between “Total Profits” and “Taxable Total Profits” Answer: Qualifying charitable donations are deducted from Total Profits to derive Taxable Total Profits | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:16:18 | In the adjustment of trading profit for a company what is the treatment of motor expenses | in-the-adjustment-of-trading-profit-for-a-company-what-is-the-treatment-of-motor-expenses | In the adjustment of trading profit for a company what is the treatment of motor expenses paid by the company in respect of a car provided by the company for the managing director of the company who is also the owner of 100% of the shares in the company. The managing director used the car for 60% business use and 40% private use Answer: Motor expenses incurred by a company in respect of a car made available for both business and private use of an employee are a fully allowable expense for the company without reference to any private use by the employee. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:17:43 | What is the tax treatment of loan interest payable on a loan taken out by a company | what-is-the-tax-treatment-of-loan-interest-payable-on-a-loan-taken-out-by-a-company | What is the tax treatment of loan interest payable on a loan taken out by a company to acquire shares in a subsidiary company Answer: A loan taken out by a company to purchase shares in another company is a non trading loan. The interest payable will therefore be disallowed in deriving the adjusted trading profit of the company, but will instead be a fully allowable deduction against the interest income of the company. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:34:51 | If a car is provided by a company for the business and private use of the owner manager of | if-a-car-is-provided-by-a-company-for-the-business-and-private-use-of-the-owner-manager-of | If a car is provided by a company for the business and private use of the owner manager of the company, what tax relief is available to the company for the cost of the car when bought Answer: The company will claim capital allowances on the cost of the car, the amount of which will be determined by the level of CO2 emissions of the car. The capital allowances will then be available in full to the company as there are no private use adjustments in corporation tax in either capital allowances or the adjustment of trading profit. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:35:17 | What tax relief, if any, is available to a company when it buys business premises | what-tax-relief-if-any-is-available-to-a-company-when-it-buys-business-premises | What tax relief, if any, is available to a company when it buys business premises Answer: A company will only be able to claim Structures and Buildings Allowance (SBA) on the cost of buying a new building which will be at the rate of 3% per annum. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:35:50 | For corporation tax purposes what happens when a company changes its accounting date by preparing accounts for a 15 month period | for-corporation-tax-purposes-what-happens-when-a-company-changes-its-accounting-date-by-preparing-accounts-for-a-15-month-period | For corporation tax purposes what happens when a company changes its accounting date by preparing accounts for a 15 month period Answer: If a company has a period of account of 15 months it will be required to prepare 2 corporation tax computations for the 2 accounting periods that arise, the first for a 12 month period and the second for the remaining 3 month period. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:40:26 | If a company incurs a trading loss for an accounting period, | if-a-company-incurs-a-trading-loss-for-an-accounting-period | If a company incurs a trading loss for an accounting period, in what order would it relieve that loss if it wished to claim relief at the earliest available opportunity Answer: The company must firstly claim relief against the Total Profits of the current period (the period of loss) and only then is it able to make a carry back claim against the Total Profits of the preceding 12 months of trading. Any remaining loss will be carried forward to set off against the future Total Profits of the company. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:40:50 | Can a company choose to use only part of a loss when making a claim | can-a-company-choose-to-use-only-part-of-a-loss-when-making-a-claim | Can a company choose to use only part of a loss when making a claim Answer: No partial claims may be made against Total Profits in either a current period or carry back claim. Partial claims will however be available in respect of any carry forward claims. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:41:22 | Can a company ever carry back a loss for more than 12 months | can-a-company-ever-carry-back-a-loss-for-more-than-12-months | Can a company ever carry back a loss for more than 12 months Answer: A loss sustained in the last 12 months of trading will benefit from terminal loss relief, which allows such a loss to be carried back for a period of 36 months from the beginning of the accounting period of loss. This relief is again deducted from Total Profits and is applied against the preceding periods on a LIFO basis. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:41:59 | How can a company use a capital loss | how-can-a-company-use-a-capital-loss | How can a company use a capital loss Answer: Capital losses cannot be set off against income, so any net capital loss of an accounting period may only be carried forward to set off against future net gains of a period | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:42:22 | A company has 2 subsidiary companies, one wholly owned and the other 60% owned. | a-company-has-2-subsidiary-companies-one-wholly-owned-and-the-other-60-owned | A company has 2 subsidiary companies, one wholly owned and the other 60% owned. Explain the tax issues that arise if the parent company buys plant and machinery at a cost of £600,000 Answer: For capital allowance purposes all 3 companies are in the group which means that the AIA limit of £1m will be split between the group companies in any proportion it chooses. The parent company may decide therefore where to use the available AIA if such qualifying expenditure should exceed the £1m limit, so it may choose here to use £600,000 of the available AIA limit in the parent company to claim a full 100% allowance on the qualifying capital expenditure incurred. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 15:45:46 | Explain the tax issues that arise if both subsidiaries incur trading losses in the current period | explain-the-tax-issues-that-arise-if-both-subsidiaries-incur-trading-losses-in-the-current-period | A company has 2 subsidiary companies, one wholly owned and the other 60% owned. Explain the tax issues that arise if both subsidiaries incur trading losses in the current period Answer: Group relief of losses is only available in a 75% group so relief will only be available within the parent company for the loss sustained by the wholly owned subsidiary company. The loss made by the 60% owned subsidiary will only be usable in the normal way against the profits of that company. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:19:32 | Explain the tax issues that arise if the parent company incurs a capital loss while both subsidiaries realise chargeable gains in the current period | explain-the-tax-issues-that-arise-if-the-parent-company-incurs-a-capital-loss-while-both-subsidiaries-realise-chargeable-gains-in-the-current-period | A company has 2 subsidiary companies, one wholly owned and the other 60% owned. Explain the tax issues that arise if the parent company incurs a capital loss while both subsidiaries realise chargeable gains in the current period Answer: The parent company is only in a chargeable gains group with its 75% owned subsidiaries, hence here only with its wholly owned subsidiary. A claim may therefore be made to deem any part of the loss made by the parent company to have been made by the wholly owned subsidiary, or deem that any part of the gain made by that subsidiary has been made by the parent company, thus allowing for the gains and losses of the 2 companies to be set off. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:20:47 | If company A owns 80% of company V, which in turn owns 80% of company FC, | if-company-a-owns-80-of-company-v-which-in-turn-owns-80-of-company-fc | If company A owns 80% of company V, which in turn owns 80% of company FC, then which companies may claim group relief Answer: For group relief purposes an effective 75% holding must exist between a parent company and both a direct and indirect subsidiary company, therefore company A can group relieve with company V and company FC can group relieve with company V, but company A and company FC cannot claim group relief between them as 80% of 80% does not give the required effective 75% holding. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:21:22 | If company A owns 75% of company V, which in turn owns 75% of company FC, | if-company-a-owns-75-of-company-v-which-in-turn-owns-75-of-company-fc | If company A owns 75% of company V, which in turn owns 75% of company FC, then which companies are in the same chargeable gains group Answer: For chargeable gains group membership each direct holding must be at least 75% but the effective holding to an indirect subsidiary need only be 51% , therefore all companies are in the same chargeable gains group. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:21:49 | How does the calculation of a chargeable gain for a company differ from how a gain is computed for an individual | how-does-the-calculation-of-a-chargeable-gain-for-a-company-differ-from-how-a-gain-is-computed-for-an-individual | How does the calculation of a chargeable gain for a company differ from how a gain is computed for an individual Answer: Companies get a deduction for indexation allowance in computing a chargeable gain if the asset was purchased before December 2017 , but the allowance is only available to December 2017 | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:22:15 | If a net capital loss arises on disposals made by a single company in an accounting period, what happens to the net capital loss | if-a-net-capital-loss-arises-on-disposals-made-by-a-single-company-in-an-accounting-period-what-happens-to-the-net-capital-loss | If a net capital loss arises on disposals made by a single company in an accounting period, what happens to the net capital loss Answer: A net capital loss sustained by a single company may only be carried forward to set off against future net gains | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:22:52 | When a company disposes of shares in another company what is the order in which the shares sold are matched with acquisitions. | when-a-company-disposes-of-shares-in-another-company-what-is-the-order-in-which-the-shares-sold-are-matched-with-acquisitions | When a company disposes of shares in another company what is the order in which the shares sold are matched with acquisitions. Answer: The shares sold are deemed disposed of in the following order: • shares acquired on same day • shares acquired in previous 9 days • shares contained within the share pool which is made up of any shares acquired more than 9 days previous. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:23:21 | What difference arises in the tax treatment of shares acquired by a company in the form of a bonus issue and a rights issue | what-difference-arises-in-the-tax-treatment-of-shares-acquired-by-a-company-in-the-form-of-a-bonus-issue-and-a-rights-issue | What difference arises in the tax treatment of shares acquired by a company in the form of a bonus issue and a rights issue Answer: Shares acquired through a rights issue incur a cost whereas no cost is incurred by a company when shares are acquired via a bonus issue. Therefore on a rights issue there must be a reindexation of the share pool before adding in the new shares acquired. There is no reindexation of the share pool when shares are acquired via a bonus issue as no additional share cost is incurred. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:40:02 | For VAT purposes what types of supply may be made by a trader | for-vat-purposes-what-types-of-supply-may-be-made-by-a-trader | For VAT purposes what types of supply may be made by a trader A trader may make taxable supplies, exempt supplies or some may be outside the scope of VAT. Taxable supplies may be either standard rated or zero rated | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:40:57 | What is the difference between making zero rated supplies and exempt supplies | what-is-the-difference-between-making-zero-rated-supplies-and-exempt-supplies | What is the difference between making zero rated supplies and exempt supplies? Answer: A trader making zero rated supplies may register for VAT and is therefore able to recover any input VAT incurred on purchases and expenses. If a trader only makes exempt supplies it cannot register for VAT and therefore cannot recover any input VAT on such costs. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:41:18 | Based on past turnover in what circumstances must a trader compulsorily register for VAT | based-on-past-turnover-in-what-circumstances-must-a-trader-compulsorily-register-for-vat | Based on past turnover in what circumstances must a trader compulsorily register for VAT A trader making taxable supplies must register for VAT if during the previous 12 months the value of taxable supplies exceeded £85,000 . However, VAT registration is not required if taxable supplies in the following 12 months will not exceed £83,000. These figures are exclusive of VAT. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:41:45 | Based on past turnover by what date must a company notify HMRC of its requirement to register for VAT and from when will it be registered | based-on-past-turnover-by-what-date-must-a-company-notify-hmrc-of-its-requirement-to-register-for-vat-and-from-when-will-it-be-registered | Based on past turnover by what date must a company notify HMRC of its requirement to register for VAT and from when will it be registered HMRC must be notified within 30 days after the end of the period when taxable supplies exceeded £85,000 during the previous 12 months and the trader will be registered from the first day of the 2nd month after the limit was exceeded | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:42:05 | Based on future turnover in what circumstances must a trader compulsorily register for VAT | based-on-future-turnover-in-what-circumstances-must-a-trader-compulsorily-register-for-vat | Based on future turnover in what circumstances must a trader compulsorily register for VAT A trader must register for VAT if taxable supplies will exceed £85,000 during the following 30 days | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:42:55 | Based on future turnover by what date must a company notify HMRC of its requirement to register for VAT and from when will it be registered | based-on-future-turnover-by-what-date-must-a-company-notify-hmrc-of-its-requirement-to-register-for-vat-and-from-when-will-it-be-registered | Based on future turnover by what date must a company notify HMRC of its requirement to register for VAT and from when will it be registered HMRC must be notified by the end of the 30 day period in which taxable supplies will exceed £85,000 and the trader will be registered from the beginning of the 30 day period. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:43:16 | Why might a trader voluntarily register for VAT | why-might-a-trader-voluntarily-register-for-vat | Why might a trader voluntarily register for VAT Answer: A trader registering for VAT and then making taxable supplies is able to recover the input VAT incurred on its costs and will not suffer a loss in sales due to higher prices if either it makes zero rated sales or if its customers are themselves VAT registered . A trader may also choose to register for VAT if its sales are approaching the compulsory VAT registration limit so as to avoid any penalties that may arise if it were to miss the compulsory registration date. It may also be used by a small business to appear larger in order to attract more customers. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:43:49 | In what circumstances can input VAT incurred prior to VAT registration be recovered by a trader | in-what-circumstances-can-input-vat-incurred-prior-to-vat-registration-be-recovered-by-a-trader | In what circumstances can input VAT incurred prior to VAT registration be recovered by a trader On inventory & non-current assets acquired for business purposes within four years of registration and not sold or consumed prior to registration. Services must be supplied for business purposes and were not supplied more than six months prior to registration. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:44:17 | In what circumstances must a trader deregister | in-what-circumstances-must-a-trader-deregister | In what circumstances must a trader deregister Answer: A trader must deregister if the business ceases to make taxable supplies. (A trader may choose to deregister if the level of taxable supplies in the next 12 months will fall below the deregistration limit of £83,000 (VAT exclusive)) | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:44:39 | In what circumstances would a disposal of the assets and trade of a business be outside the scope of VAT | in-what-circumstances-would-a-disposal-of-the-assets-and-trade-of-a-business-be-outside-the-scope-of-vat | In what circumstances would a disposal of the assets and trade of a business be outside the scope of VAT If it satisfies the conditions for being the transfer of a business as a going concern | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:44:55 | In relation to the supply of goods or services, what is the significance of the tax point | in-relation-to-the-supply-of-goods-or-services-what-is-the-significance-of-the-tax-point | In relation to the supply of goods or services, what is the significance of the tax point Answer: The tax point date determines in which VAT return period a transaction is to be allocated | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:45:13 | What date will determine the tax point | what-date-will-determine-the-tax-point | What date will determine the tax point The basic tax point is the date goods are made available to the customer or a service completed. If an invoice is issued or payment received before the basic tax point, then this becomes the actual tax point. If an invoice is issued within 14 days of the basic tax point , the invoice date will usually become the actual tax point unless an earlier date applies according to the rules above. | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:45:46 | Is output tax charged on the sales figure before or after deducting a prompt payment discount | is-output-tax-charged-on-the-sales-figure-before-or-after-deducting-a-prompt-payment-discount | Is output tax charged on the sales figure before or after deducting a prompt payment discount Answer: VAT is chargeable on the actual amount received where a discount is offered for prompt payment. If the discount is not taken the VAT is charged on the full sale price and if the discount is taken then the VAT is based on the discounted price | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:46:02 | Is relief available for the output tax on a sale when the amount of the debt cannot be collected | is-relief-available-for-the-output-tax-on-a-sale-when-the-amount-of-the-debt-cannot-be-collected | Is relief available for the output tax on a sale when the amount of the debt cannot be collected Answer: Relief for irrecoverable (impaired) debts is only available if the output VAT has been accounted for and paid and debt is over six months old as measured from the time that payment was due. The relief is claimed as input VAT on the VAT return | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:46:18 | For what periods of time may a VAT return be submitted | for-what-periods-of-time-may-a-vat-return-be-submitted | For what periods of time may a VAT return be submitted Answer: VAT returns are usually submitted on a quarterly basis, but may be submitted on a monthly basis if the trader so chooses, or if eligible for the annual accounting scheme may be submitted on an annual basis | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:46:36 | In what circumstances may a trader apply the cash accounting scheme | in-what-circumstances-may-a-trader-apply-the-cash-accounting-scheme | In what circumstances may a trader apply the cash accounting scheme Answer: A trader will be able to operate the cash accounting scheme provided its expected taxable turnover for the next 12 months does not exceed £1,350,000 and may stay in the scheme until annual taxable turnover reaches £1,600,000 | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:46:55 | In what circumstances may a trader apply the annual accounting scheme | in-what-circumstances-may-a-trader-apply-the-annual-accounting-scheme | In what circumstances may a trader apply the annual accounting scheme Answer: A trader can apply to use the annual accounting scheme provided its expected taxable turnover for the next 12 months does not exceed £1,350,000 and the company must be up-to-date with its VAT returns and payments. A trader may stay in the scheme until annual taxable turnover reaches £1,600,000 | ||||||||||||||||||||||||||||||||||||||||||
| 2021-08-19 16:47:13 | What is the VAT treatment of sales of goods made to customers resident overseas | what-is-the-vat-treatment-of-sales-of-goods-made-to-customers-resident-overseas | What is the VAT treatment of sales of goods made to customers resident overseas Answer: Sales made to customers resident anywhere outside the UK will be zero rated. |
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