Class Activity Week 1

8/2/2019 Class Activity Week 1

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Term 2, 2011 Ruchi Ahuja

COMPANY ACCOUNTING AND FINANCIAL STATEMENTS

CLASS ACTIVITY 1 (WEEK 1-2)

Teachers name Ruchi Ahuja

PART A

Question 1.1 What does the term perpetual succession mean in relation to a

company?

Question 1.2 What does the term limited liability mean in relation to the

shareholders of a

company? Give an example to support your answer.

Question 1.3 What are the major differences between a proprietary limited liability

company

and a public limited liability company?

Question 1.4 What does the term no-liability mean?

Question 1.5 Can a no-liability company be a proprietary company? What must be

the objects

of a no-liability company?

Question 1.6In regard to liability of members, what is the difference between a

company

limited by guarantee and an unlimited liability company?

Question 1.7 What is the difference in maximum membership requirements at

formation

between a public and a proprietary company?Question 1.8 What is the advantage in being a small proprietary company as

compared to a

large proprietary company?

Question 1.9 Can a company have more than 50 employees at the end of a

financial year and

be a small proprietary company? Discuss.

Question 1.10 What are the four basic steps required to register a company?

Question 1.11Does a company have to have a constitution?

Question 1.12 What is the role of ASIC?

Question 1.13 What does the Australian Stock Exchange do?

Question 1.14 Can a company keep financial records electronically? Discuss.

Question 1.15Do financial records have to be kept in English? Discuss.

Question 1.16If financial records are kept outside Australia, what is the position

of a person in

Australia who is entitled to inspect the records?


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Question 1.17 What must a companys financial records reveal?

Question 1.18 What is the function of a register of charges?

Question 1.19 What is the function of a minute book and when should it be

prepared?

Question 1.20 Show whether the following statements are true or false:

TRUE/FALSE

(a) All public companies are listed on the stock exchange. .............

(b) Financial records cannot be kept electronically. .............

(c) A no-liability company must have a constitution. .............

(d) A proprietary company must be wound up after all shareholders die. .............

(e) A proprietary company can have only one member. .............

(f) A proprietary company can appeal to the public for funds. .............

(g) A large proprietary company has reduced reporting obligations. .............(h) A companys name can be its Australian Company Number. .............

(i) The Australian Accounting Standards Board is Australias company

regulator. .............

(j) Minute books must be written up within 3 months of a directors

meeting. .............

Question 1.21 What are accounting standards?

Question 1.22 What is the significance of the AASB series of accounting standards

in company

accounting?

Question 1.23 (a) How many AASB series of accounting standards are there?

(b) Which AASB accounting standard is primarily concerned with:

(i) Income statements

(ii) Statement of financial position (balance sheet)

(iii) Cash flow statements

(iv) Property, plant and equipment

(v) Intangible assets

(vi) Accounting for income tax

(vii) Construction contracts

(viii) Changes in foreign exchange rates(ix) Employee benefits

(x) Consolidated statements

PART B TEST YOURSELF

Circle the correct answer to the questions below.


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1. ASIC ensures that:

(a) share prices are listed correctly

(b) there is fair play in business

(c) depositors funds are invested correct ly

(d) accounting standards are developed

2. A companys financial records must be kept for:

(a) 7 years

(b) 5 years

(c) 5 years after being wound up

(d) 3 years

3. The major advantage of establishing a business as a company is:

(a) unlimited liability(b) no liability

(c) guaranteed liability(d) limited liability

4. This company has no right to recover calls (instalments):

(a) proprietary limited company

(b) limited liability company

(c) no liability company(d) unlimited liability company

5. A company that must have less than 50 non-employee shareholders is:

(a) a no liability company

(b) an unlimited liability company

(c) a public limited liability company(d) a proprietary limited company

6. What do the initials NL stand for?

(a) no limit(b) nil liability(c) no liability

(d) nil limit

7. A no-liability company:

(a) must be a transport company


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(b) must be a mining company

(c) must be a manufacturing company

(d) can be any type of company

8. A no-liability company:(a) must be a public company

(b) must be a proprietary limited company

(c) must be a company limited by guarantee

(d) must have less than 50 members

9. A proprietary limited company is classified small if:(a) its revenue is >$10M and assets are >$5M

(b) its employees number 50 or more and its revenue is >$10M

(c) its assets are >$5M and it employs 50 or less(d) its revenue is


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(c) no-liability company

(d) proprietary limited company

14. A small proprietary company has:

(a) unlimited reporting obligations(b) no reporting obligations

(c) reduced reporting obligations

(d) reporting obligations to the Australian Stock Exchange only

15. Financial records must be hard copy; they cannot be kept electronically:

(a) True(b) False

16. Which of the following company names is a public limited liability company:(a) Sunshine Pty Ltd

(b) Rocky Mountain NL(c) Sheen Ltd

(d) Fortune Plus

17. Financial records must be kept in Australia:

(a) True

(b) False

18. Financial records may be kept in any language:(a) True

(b) False

19. The law that covers companies is:(a) Companies Law

(b) Contract Law

(c) Capital Law

(d) Corporations Law

20. A public company must have the following as residents of Australia:(a) One secretary of a company and at least two directors

(b) Two secretaries of a company and at least one director

(c) All members of a company and at least two directors

(d) All members of a company and at least one secretary


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Documents

Class Activity Week 1