Credit Risk Management
1 Which of the following are basic components of a companys report
and accounts?
(A) Report on the activities of the group
(B) Report by the companys auditors
(C) Statement of accounting policies and notes to the accounts
(D) Balance sheet and a P/L account
(E) Directors report
2 Which of the following is a company not required to give to the
Registrar of Companies?
(A) Details of the companys share capital and debentures
(B) A copy of its annual report and accounts
(C) An annual return giving details of subsequent changes to the
Memorandum and Articles and to the address of the com-
panys registered office
(D) Details of each mortgage and charge on the assets of the company
(E) Memorandum and Articles of Association
(F) List of the directors and secretary
3 Which of the following states what is required to be contained in a
companys report and accounts by current legislation?
(A) The Directors Acts
(B) The Disclosure Acts
(C) The Companies Acts
(D) The Going Concern Act
(E) SSAP 9
4 What is the time limit within which a public company must deliver
its report and accounts to the Companys Registrar?
(A) 3 months from the companys accounting year end
(B) 6 months from the companys accounting year end
(C) 7 months from the companys accounting year end
(D) 12 months from the companys accounting year end
Financial risks
5 What are the accounting standards issued by the ASB called?
(A) Financial Reporting Standards (FRS)
(B) Generally Accepted Accounting Principles (GAAP)
(C) Standard Set of Accounting Principles (SSAP)
(D) International Accounting Standards (IAS)
6 What is the going concern concept?
(A) Statutes ensuring that the management changes are continuous
(B) An assumption that a company will continue in business for
the foreseeable future
(C) A method of inventory valuation
(D) Status governing the procedures for management changes
(E) A method of calculating non-performing debtors (accounts
7 What does SSAP 2 relate to?
(A) Delayed accounts receivable
(B) Method of inventory valuation
(C) Disclosure of accounting policies
(D) Valuation of intangible assets
(E) Hidden provisioning for doubtful loans
8 Which of the following does the Statement of Auditing Standards
600 not require an auditors report to contain?
(A) A title identifying the persons to whom the report is addressed
(B) An introductory paragraph identifying the financial statements
(C) Sections dealing with responsibilities of the directors, the basis
of the auditors opinion and the opinion itself
(D) The signature of the auditors
(E) The date of the audit report
(F) The valuation of premises and property
9 Which of the companys financial statements does the auditors
report address?
(A) P/L account
Credit Risk Management
(B) The balance sheet
(C) Shareholders statement
(D) Cash flow statement
(E) Operating statement
10 Which of the following parties issues a qualified opinion on
financial statements?
(A) Company director
(B) Company auditors
(C) Financial director
(D) Investment advisor
(E) Company banker
11 What are the three categories of information included in a direc-
tors report?
(A) Information on company
(B) Information required by law
(C) Information required by investors
(D) Information required by the Stock Exchange
(E) Voluntary information
12 Which of the following three things does a balance sheet show
about a company?
(A) How the company is funded?
(B) How profitable the company is?
(C) How the assets are balanced with the liabilities?
(D) How cash is invested in the business?
(E) How much the company pays in interest expenses?
13 What is called up share capital?
(A) The amount of shares a company is allowed to issue
(B) The number of shares that have been issued by a company
14 Which of the following are tangible assets?
(A) Land
(B) Plant
Financial risks
(C) Accounts receivable
(D) Inventory
(E) Trademarks
(F) Machinery
15 Calculate the Trade debtors/Turnover ratio, where a companys
turnover is GBP 3,000,000 p.a. and trade debtors figure is GBP
(A) 25
(B) 30
(C) 32
(D) 33.5
(E) 36
16 What are trade debtors?
(A) Debts owed to the company by customers of the company on
credit terms
(B) Debts the company owes to suppliers of the company on
credit terms
17 Are creditors assets or liabilities of the company?
(A) Assets
(B) Liabilities
18 Calculate the creditors days figure where the Trade Creditors figure
is GBP 500,000 and the companys turnover is GBP 5,000,000.
(A) 28.3
(B) 30.2
(C) 33.0
(D) 36.5
(E) 40.2
19 What is a trade creditor?
(A) Suppliers to whom the company owes money, i.e. people from
whom the company has purchased goods on credit terms
(B) Clients who owe money to the company, i.e. people who the
company has sold goods to on credit terms

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