The benefit enjoyed by a sole trader includes (a) Easy to get loan from financial institutions (b) Shares can be sold but only to a selected individuals (c) The owner has limited liability (d) Profits need not be shared

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1)
The benefit enjoyed by a sole trader includes
(a)
Easy to get loan from financial institutions
(b)
Shares can be sold but only to a selected individuals
(c)
The owner has limited liability
(d)
Profits need not be shared
2)
The primary goal of financial management is to
(a)
Maximise returns
(b)
Minimise risk
(c)
Maximise shareholders wealth
(d)
Implement cost cutting measures
3)
The internal rate of return is calculated by
(a)
Finding the project which gives the highest return
(b)
Calculating the anticipated risks of the project
(c)
Calculating how fast the capital is recovered
(d)
Calculating the discount factor when the NPV becomes zero
4)
Cash flow is a better way to measure income compared to profits because
(a)
Profits can be manipulated
(b)
Easier to trace cash flow
(c)
There are non-cash related item in determining profit
(d)
Accrual accounting can be confusing
5)
Cash flow is a better way to measure income compared to profits because
(a)
Profits can be manipulated
(b)
Easier to trace cash flow
(c)
There are non-cash related item in determining profit
(d)
Accrual accounting can be confusing
Transcribed Image Text:1) The benefit enjoyed by a sole trader includes (a) Easy to get loan from financial institutions (b) Shares can be sold but only to a selected individuals (c) The owner has limited liability (d) Profits need not be shared 2) The primary goal of financial management is to (a) Maximise returns (b) Minimise risk (c) Maximise shareholders wealth (d) Implement cost cutting measures 3) The internal rate of return is calculated by (a) Finding the project which gives the highest return (b) Calculating the anticipated risks of the project (c) Calculating how fast the capital is recovered (d) Calculating the discount factor when the NPV becomes zero 4) Cash flow is a better way to measure income compared to profits because (a) Profits can be manipulated (b) Easier to trace cash flow (c) There are non-cash related item in determining profit (d) Accrual accounting can be confusing 5) Cash flow is a better way to measure income compared to profits because (a) Profits can be manipulated (b) Easier to trace cash flow (c) There are non-cash related item in determining profit (d) Accrual accounting can be confusing
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