Q1. 

(a) Identify two (2) key reporting entities featured in consolidations.

(b) Describe the main purpose and roles of each.

Q2.  A company has borrowed money from an overseas bank on loan. This can give rise to different types of data. 

Outline three (3) key types of data required for complex financial reporting. For each type, suggest the source of that data. 

Q3. Outline the three (3) of the main features of integrated accounting computerized systems.

Q4. Identify and explain two (2) key features of:

a) GST as it affects a business that holds an ABN and is registered for GST purposes.

b) PAYG instalments of income tax.

Q5.

a) An accountant (who is a CPA) that prepares the BAS for a company is also a customer of that company, and therefore should be charged GST on taxable supplies. However the company is not charging him GST. Comment on the ethical issue involved and describe the consequences.

b) A CFO of a listed (ASX) public company often becomes a little intoxicated with his wife at home, and spills information to her on significant developments in the company’s potential profit.  She has not acted on the disclosure and bought /sold the company’s shares, so far to date. Discuss the confidentiality principle involved.

c) The ASX has certain disclosure requirements for listed public companies. One of the requirements is the relevant interests of each director in shares, debentures and the like in the company they hold office. Discuss briefly why this is seen as an ethical issue.

Q6. Explain two (2) key features of accounting reporting periods.

Q7. 

a) What is the reporting period for when companies must pay their instalment of tax? 

b) Companies are “fully self-assessed” under the present taxation system; what does this mean?

Q8. Briefly explain what is meant by disclosure requirements, giving two (2) examples.

Q9. Entities in Australia are required to report financial data to which two (2) government authorities? For each authority, explain what that financial data consists of in line with financial legislation and statutory requirements.

Q10. Compare two (2) different methods of presenting financial data.

Q11.

a)  Benefits most used in business are “fringe benefits” and a company car is one such benefit.

Explain the two methods/options for calculating its taxable value, and in practice which one requires more substantiation? Why?

b) Depreciation in taxation and accounting uses two methods/options. What are they called and briefly explain how they operate.

c) “Deductions” are used in payroll whereby the gross pay of an employee is reduced for various (optional) reasons. Using three such deductions write a short sentence explaining each. 

Q12. A policy is a course of action or guidelines to be followed, whereas the procedure is the “nitty gritty” of the policy.

a) Using the example of a staff recruitment policy, suggest 3 possible procedures.

b) Explain why it is important for companies to have policies and procedures in place. Use a different example of organisational guidelines and/or procedures to support your answer.

Q13. Identify and explain the key principles of double-entry bookkeeping and accrual accounting. 

In your answer you should mention the following key items:

• Cash vs accrual accounting

• Requirement to enter what twice/double?

• Ledger and the Balance sheet (accounting) equation

• Trial balance

• Chart of accounts

14. Identify two (2) areas relating to a business’s financial legal obligations, e.g. taxation requirements, reporting duties, industrial relations etc. For each one, discuss an issue the business might experience in meeting their requirements.

Q15. 

a) Describe the difference between a partially owned subsidiary and a controlled entity. 

b) Kiwi Ltd owns 40% of the ordinary (voting) shares in NZ Ltd. Kiwi Ltd has 4 members of 8 in total on the board of directors of NZ Ltd and influence decisions about operating policies.

Is NZ Ltd a wholly owned subsidiary, partly owned subsidiary, a controlled entity, or an independent company from Kiwi Ltd? Give reasons to support your answer. 

c) Bob Ltd owns 100% of the ordinary (voting) shares of Jane Ltd. They have tried to control the entire board of directors of Jane Ltd since their acquisition of those shares 15 months ago, and since then Jane’s board members’ positions came up for re-election, all newly elected board members have been current Bob Ltd executives. Currently Bob Ltd has 7 out of the ten executives in place on that board. Is Jane Ltd a wholly owned subsidiary, partly owned subsidiary, a controlled entity, or an independent company from Bob Ltd? 

d) Max Ltd owns 60% of the ordinary (voting) shares of Meng Ltd. Six out of ten board members are controlled by Max Ltd. Is Meng Ltd a wholly owned subsidiary, partly owned subsidiary, a controlled entity, or an independent company from Max Ltd? 

e) Flanagan Ltd owns 10% of the ordinary (voting) shares of Allen Ltd., they will keep the shares for as long as it is deemed a good investment, after which they will dispose of the shares. They don’t exert any influence on the Board of directors of Allen Ltd. Is Allen Ltd a wholly owned subsidiary, partly owned subsidiary, a controlled entity, or an independent company from Flanagan Ltd?

Q16. With reasons to support your answer identify which of the following six arrangements is a joint venture. 

1. Doug and Pete join forces to run a plumbing business together, which will last indefinitely, sharing profits and losses equally. 

2. James and John join forces to purchase, race and ultimately sell a thoroughbred racehorse, agreeing to split the receipts (wins, sale price) and outgoings (feed, training, vet etc.). 

3. Dave who runs a gardening and lawn mowing business, agrees to bring Joel in and pay him a commission based on the work that he performs. 

4. Meek and Mild are acquiring a street coffee retail business that will last for only 6 months, after which they plan to part company. 

5. Hardware, which is in the tools, machinery and building hardware industry, has registered with ASIC as a for-profit organisation with an indefinite life. 

6. Mike is holding the assets of George’s business and running the show, whilst George is in hospital for long-term cancer treatment.