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to accompany

Company Accounting 10e

by
Ken Leo, Jeffrey Knapp, Sue McGowan & John Sweeting

Prepared by

Peter Baxter

[pic]

© John Wiley & Sons Australia, Ltd 2015

Chapter 1: Nature and regulation of companies

Multiple-choice questions

1. The advantages of a company over a partnership and sole trader do not include which of the following?

a. Members are able to sell their shares at any time to another person without having to obtain permission from the other members. b. Members are liable for only a limited amount of the company’s debts. c. A company has a legal existence distinct from its owners. *d. A company is only entitled to raise small amounts of cash by issuing shares.

Correct answer: d
Learning Objective 1.1 ~ summarise the nature and attributes of a company

2. In Australia, the Corporations Act 2001 is administered by the:

a. Australian Securities Exchange. b. Australian Accounting Research Foundation. *c. Australian Securities and Investments Commission. d. Securities and Exchange Commission.

Correct answer: c
Learning Objective 1.1 ~ summarise the nature and attributes of a company

3. The two main types of companies permitted to be registered under the Corporations Act 2001 are a:

a. private company, and a proprietary company. b. public company, and a trade union. *c. proprietary company, and a public company. d. proprietary company, and a partnership.

Correct answer: c
Learning Objective 1.2 ~ discuss the different types of companies which may be formed under the Corporations Act 2001

4. According to the Corporations Act 2001, a small proprietary company is one which satisfies at least two of the following tests: it must have consolidated revenue of less than $25 million, consolidated gross assets of less than $12.5...

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