Mock Examination

: CAT Paper FA2

Maintaining Financial Records

Session

: June 2014

Set by

: Ms Edith Quek

Your Contact Number : ______________________________________

I wish to have my script marked by the lecturer and

collect the marked script at the SAA-GE Reception Counter

email me the marked script to ____________________________

(Please submit your script latest by 9th May 2014 for marking)

SAA GLOBAL EDUCATION CENTRE PTE LTD

Company Registration No. 201001206N
111 Somerset Road, TripleOne Somerset #06-01/02
Singapore 238164
Tel: (65) 6733 5731 Fax: (65) 6733 5750
Website: www.saage.edu.sg

Email: studentservices@saage.edu.sg

FA2 Maintaining Financial Records

Mock Exam 2014
1.

At 31 December 2013, Lili's bank account was overdrawn. She also had a bank
loan on which monthly capital repayments will commence on March 2014.
How should these balances be reported on Lili's Statement of Financial Position?
a.
Bank Loan - Non Current Liabilities, Bank Overdraft - Current Liabilities
b.
Bank Loan - Current Liabilities, Bank Overdraft - Current Assets
c.
Bank Loan - Current Assets, Bank Overdraft - Current Liabilities
d.
Bank Loan - Non Current Liabilities, Bank Overdraft - Non Current Liabilities
(
)

2.

Mary and Jane are in partnership, sharing profits equally. On 1 July 2013, Tom
joined the partnership and it was agreed that from that date they all share profits
equally. In the financial year ended 31 December 2013, the partnership profit was
$240,000, accruing evenly over the year.
What should Mary's total profit share be for the year ended 31 December 2013?
_____________

3.

When preparing the extended trial balance, in which column should the balance for
Allowance for Receivables be included?
a.
b.
c.
d.

Statement of financial position debit

Statement of financial position credit
Income statement debit
Income statement credit
(

4.

Linda has a suspense account with a debit balance of $1000. He then discovered
that :
- A credit purchases of $12,000 was credited to Payables Account only
- An invoice for stationery of $300 was omitted from the books
Lynette decided to correct the above errors. What is the balance on the suspense
account after the correction? Is it a debit or credit balance?
______________

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5.

Bon and Tony were partners sharing profit and loss equally. On 1 January 2011,
they decided to admit John as a partner in their business on the following
agreement:
-

Goodwill of $240,000 was to be valued

Goodwill is not to be maintained in the books of partnership
The partners would share profits in the ratio of 3: 2: 1 for Bon, Tony and
John
John would introduce cash to ensure that his opening capital balance is
maintained at $100,000

Calculate the amount that John must contribute for goodwill upon his admission
into the partnership
____________

6.

Tata company receives rent of $481,200 for the year ended 30 June 2013.
The following were the amounts of rent in advance and in arrears at 30 June 2012
and 30 June 2013 :
30 June 2012
30 June 2013
$
$
Rent received in advance
28,700
31,200
Rent in arrears
21,200
18,400
What amount of rental income should appear in the company's statement of profit
or loss for the year ended 30 June 2013?
a.
b.
c.
d.

$486,500
$460,900
$501,500
$475,900
(

7.

In a partnership which of the following should be charged against profit, rather than
being treated as an appropriation of profit?
I Salary payable to a partner
II Interest payable to a partner on any loan received by the partnership
III Interest allowed on partners's capital account balances
a.
b.
c.
d.

I and II
II and III
II only
I and III
(

FA2 Maintaining Financial Records Mock Test

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8.

When a trial balance was prepared, four ledger accounts were omitted:
Discount Received $5,980
Discount Allowed $6,780
Carriage Inwards $2,000
Carriage Outwards $3,500
In order to ensure that the trial balance agrees, a suspense account was opened.
What was the balance on the suspense account?
a.
b.
c.
d.

$ 6,300
$ 700
$ 4,700
$18,260
(

9.

Pica has an opening inventory of $50,000 and purchased goods costing $600,000
during the year. Her closing inventory is $12,000 less than the opening inventory.
Pica practised a mark up of 40% on cost. What is Pica's gross profit for the year?

______________
10. Janny has the following list of balances from his general ledger as at 31 December
2013:
Sales
Stock 1 Jan 2012
Purchases
Motor Vehicles
Bank (Credit balance)
Payables
Receivables
Capital

$ 260,900
$ 40,000
$129,800
$420,000
$ 2,789
$ 56,890
$ 86,897
$678,900

What is the total of the debit balances in Bennie's trial balance as at 31 December
2013?
_________________

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11. Gary, a sales tax registered trader purchased some computer for use in his
business. The invoice for the computer showed the following costs related to the
purchase :
Computer
Additional memory
Delivery
Installation
Maintenance

: $890,000
: $ 95,000
: $ 10,000
: $ 20,000
: $ 25,000

Sales Tax (17.5%)

: $182,000
How much should Gary capitalise as a non current asset in relation to the
purchase?
a.
$1,193,000
b.
$1,040,000
c.
$1,222,000
d.
$1,015,000
(
)
12. Martha and Martin are in partnership. In the year to 31 December 2012, Marthas
drawings were $20,000 and the following entries have been made in the
partnership appropriation account or Martha :
Salary
Interest on drawings
Interest on capital
Share of Profit

$ 9,800
$ 1,000
$ 500
$25,820

What is increase or decrease in the balance on Marthas current account as at 31

December 2012 after the above adjustments?
a.
$15,120 decrease
b.
$15,120 increase
c.
$17,120 decrease
d.
$17,120 increase
(
)
13. Which of the following statements is correct?
I.
To record a decrease in expenses, that account must be debited
II. To record an increase in capital, capital account must be credited
III. To record a decrease in liability, liability account must be credited
IV. To record an increase in revenue, revenue account must be debited
a.
b.
c.
d.

I
II
III
IV
(

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14. A non-current asset which has a net book value of $150,000 was sold for
$200,000. At the date of disposal, the accumulated depreciation on the asset was
$120,000.
What was the cost and profit or loss on disposal of this non-current asset?
a.
b.
c.
d.

Cost : $350,000
Cost : $350,000
Cost : $270,000
Cost : $270,000

Loss : $80,000
Gain : $80,000
Loss : $50,000
Gain : $50,000
(

15. LL Ltd used periodic weightage average method in valuing its inventory. During
November 2013, the following inventory details were recorded:
1 November 2013
10 November 2013
12 November 2013
15 November 2013
20 November 2013
30 November 2013

:
:
:
:
:
:

balance of 20 units valued at $9 each

purchase of 40 units at $10 each
sale of 30 units at $12.50 each
purchase of 50 units at $11 each
sale of 30 units at $15 each
purchase of 20 units at $11.50 each

What is the value of closing stock as at 30 November 2013?

_______________
16. In the year to 31 December 2013, Lim charges a repair expenses of $12,300 to the
motor vehicle account.
Which of the following is true if the error is not corrected?
a.
b.
c.
d.

Net Profit is overstated by $12,300 and Total assets is understated by $12,300

Net Profit is overstated by $12,300 and Total assets is overstated by $12,300
Net Profit is understated by $12,300 and Total assets is overstated by $12,300
Net Profit is understated by $12,300 and Total assets is understated by $12,300

17. Which of the following statements is/are false about control accounts?
I.
Control accounts are part of a memorandum accounts
II. Control accounts provide good summarized figures on trade receivables
and trade payables
III. Control accounts are prepared to prevent fraud
IV. Control accounts will help the business to be able to track their individual
credit customers' payment closely

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a.
b.
c.
d.

I and II
I
III and IV
I and IV
(

18. John has a suspense account with a credit balance of $1,400. He then found that
a purchase of supplies of $700 was correctly debited purchases account but was
entered on the wrong side of bank account.
When the error is corrected, what is the balance in the suspense account
__________________
19. Bum extracted the trial balance for the year ended 31 December 2013. The total
of the debits exceeded the credits by $300.
Which of the following could explain the imbalance?
a.
b.
c.
d.

Sales of $300 were omitted from the sales day book

Returns inwards of $150 were extracted to the debit column of the trial
balance
Discounts received of $150 were extracted to the debit column of the trial
balance
The bank ledger account did not agree with the bank statement by a debit
of $300
(
)

20. The net book value of a machinery of Lim's business as at 31 December 2013 was
$2,400. Its accumulated depreciation is $800. Lim managed to convince Wong to
purchase this machinery at $2,960. However, Lim has to deliver the machinery to
the buyer, this will cost Lim a transport cost of $210.
What is the gain/loss if Lim were to sell this machinery to Wong?

____________

21. Fen purchased a motor van on 1 January 2013 for $90,000. She incurred $6,000
for transportation and paid $5,000 import duties. On 29 January 2013, the motor
van broke down and she incurred another $2,400 for repairs. Fen charges
depreciation of 20% per annum on reducing balance basis.
What is the net book value of the motor van as at 31 December 2014?
a.
$ 80,800
b.
$ 64,640
c.
$ 82,720
d.
$ 66,176
(
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22. The following Receivables Control Account has been prepared by the new
Accounts Assistance:
Receivables Control Account
Balance B/D
308,600 Cash
147,200
Credit Sales
154,200 Discounts allowed
1,400
Cash Sales
88,100 Interest charged on overdue
Accounts
2,400
Contras
4,600 Irrecoverable debts
4,900
Allowance for receivables
2,800
Balance C/D
396,800
555,500
555,500
What should the closing balance be when all the errors made in preparing the
Receivables Control Account have been corrected?
a.
$395,200
b.
$304,300
c.
$309,500
d.
$307,100
(
)
23. A company purchased a machine for $70,000. It was expected to have a residual
value of $2,400, and its useful life was estimated at 8 years. The company
charges depreciation under the straight line method. After three years, it was
discovered that the original estimate of residual value was incorrect and that the
actual residual value would be only $1,500.
What would be the revised depreciation?
_______________
24. Nona purchased a new motor van for her business on 1 July 2013. She paid
$140,000 and traded in an old motor van. The seller allowed him $30,500 in part
exchange for the old motor van. Nona depreciates machinery using the reducing
balance method at a rate of 25% per annum. The old office equipment had cost
her $130,000 and had been depreciated by $60,560.
What is the depreciation charge on the new office equipment for the year to 31
December 2013?
a.
$42,625
b.
$23,313
c.
$52,360
d.
$50,140
(
)

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25. Lolita has prepared the following reconciliation of the balances on the payable
ledger control account in her general ledger to the total of the list of balances on
suppliers personal accounts:
Balance on general ledger control account $98,677
Less : Balance omitted from list of balances $ 900
$99,577
Add : Purchases day book overcast
$ 8,900
$108,477
=======
What is the correct balance of payables to be reported on the statement of
financial position?
_______________

26. What accounting rule is applied when allowance for receivables is provided?
a.
Prudence
b.
Matching principle
c.
Historical Cost
d.
Going concern
(

27. The total of the list of balances in Viva's payables ledger was $438,900 at 30 June
2013. The balance did not agree with Viva's payables control account balance.
The following errors were discovered:
-

A contra entry of $980 was recorded in the payables control account, but
not in the payables ledger
The total of the purchase returns daybook was undercast by $1,000
An invoice for $4,344 was posted to the supplier's account as $4,434

What amount should Valley report in its statement of financial position for accounts
payable as at 30 June 2013?
a.
$436,830
b.
$438,010
c.
$439,790
d.
$437,830
(
)

28. Kittys net assets increased by $45,000 in 2013 as compared to 2012. In 2013,
her drawings is $4,800 every 3 months and she also transferred $80,650 from her
personal account into the business bank account. What is her net profit or loss for
2013?
_______________

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29. Tan's business has a gross margin of 40% on his sales. His opening inventory
was $60,900 and closing inventory was valued at $96,890. Included in the closing
inventory is some damaged goods which cost $9,800. These damaged goods can
only be sold for $7,000 if further repair work was carried out at a cost of $780. The
total sales is $1,400,000. What is the value of Tan's purchases?
_______________
30. A company's closing inventory was overstated by $20,000, What is the effect on
profit?
a.
Next year's profits will be overstated and the current year's profits will be
overstated
b.
Next year's profits will be understated and the current year's profits will be
understated
c.
Next year's profits will be understated and the current year's profits will be
overstated
d.
Next year's profits will be overstated and the current year's profits will be
understated
(
)
31. Aaron pays a rental of $24,000 per annum. On 1 January 2013, she owed $4,200
to her landlord. A total of $29,000 was paid during the year to 31 December 2013,
Is there an accrual or prepayment for year ended 31 December 2013?
a.
An accrual of $800
b.
A prepayment of $800
c.
An accrual of $5,000
d.
A prepayment of $5,000
(
)
32. At 31 December 2013, Eaton has receivables of $8,100. At the same time, he has
an allowance for doubtful debts of $500. Eric has a credit customer Mary whose
debt has been outstanding for 2 years. Eric decided to write of Mary's debt of
$300 and provide 5% of total receivables as allowance for doubtful debts.
At the same time, a debt of $300 written off in 2012, was collected in 2013.
What is the net effect on the Income Statement for the year ended 31 December
2013?
a.
$ 110
b.
$ 410
c.
$ 300
d.
$ 210
(
)

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33. Ali and Aina are in partnership, sharing profits in the ratio of 1:2, after charging
salaries of $6,000 for each partner in each accounting year.
On 1 July 2013, they agreed to change the profit-sharing ratio to 1:1 and to
increase each partners salary to $9,000 per year. For the year ended 31
December 2013, the partnership profit amounted to $240,000. Profits are made
evenly throughout the year.
What are the partners total share of profit to be posted their respective current
accounts for the year ended 31 December 2013?
Ali : ____________

Aina : ____________

34. Zen does not keep full accounting records, but the information displayed below is
available in respect of his accounting year ended 31 December 2013:
Cash purchases
Credit Purchases
Cash paid for goods supplied on credit
Discount Received
Contra with receivables
Credit purchases returns
Payables at 1 January 2013

$ 69,000
$276,000
$198,760
$ 8,766
$ 30,000
$ 5,300
$ 20,899

What is payables balance as at 31 December 2013?

__________

35. Chong and Zhong were partners sharing profit and loss equally. On 1 January
2013, they decided to admit Long as a partner in their business on the following
agreement:
-

Goodwill of $300,000 was to be valued

Goodwill would not be maintained in the books of partnership
The partners would share profits in the ratio of 3: 2: 1 for Chong, Zhong and
Long
Long would introduce cash of $400,000

What is Long's capital balance after adjustment of goodwill?

a.
$ 450,000
b.
$ 500,000
c.
$ 550,000
d.
$ 350,000
(

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36. Renee is trying to reconcile her cash book to her bank statement at 31 December
2013. On investigation she finds:
- A standing order for $765 paid on 31 December 2013 for Insurance for the
current year that was omitted from records of the cash book
- Cheques totaling $8,995 have been credited to the cash book on 31
December 2013 but had not appeared on the bank statement until 1
December 2013
- Cheques from customers totaling $15,230 on 28 June 2013 were entered in
the cash book but Renee had only just managed to get these cheques to
the bank on 1 January 2014.
- A cheque received for $1900 had appeared on the bank statement in error
as $2900.
- Before any adjustments are made, her cash book had a debit balance of
$5,678.
What is the figure in the accounts for cash at bank to be reflected in the
Statement of Financial Position as at 31 December 2013?
_______________
37. Which of the following errors will be not revealed by extracting a trial balance?
I.
Error of commission
II. Error of omission
III. Error of single entry
IV. Complete reversal of entry
a.
I, II and IV
b.
I and IV
c.
III and IV
d.
I, III and IV
(

38. Anthony reported Sales of $899,000 and gross profit of $112,456 for the year
ended 31 December 2013. It was subsequently discovered that sales was
understated by $54,000 and the closing inventory understated $10,000. After
correction, what are corrected sales and gross profit?
_______________/____________
39. LOLO Ltd just revalued their land and buildings and credited the surplus to the
income statement. This treatment contravenes
a.
Prudence
b.
Consistency
c.
Matching
d.
Going Concern
(

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40. JJ business has an opening inventory of $17,150 and makes purchases during the
year of $890,000. He achieves a constant mark-up of 30% on cost and records
sales for the year of $1,105,000. As at 31 December 2013, while conducting a
stock take, JJ noticed that some inventory were missing. He is left with $20,000 of
the closing inventory? Calculate the amount of stock stolen
a.
$57,150
b.
$37,150
c.
$113,650
d.
$93,650
(
)
41. A company made the following payments in 2013 in respect of electricity
expenses:
Telephone
Date paid
Amount
Quarter ended 31 Jan 2013
1 Mar 2013 $270
Quarter ended 30 Apr 2013
5 Jun 2013
$310
Quarter ended 31 Jul 2013
2 Sep 2013 $320
Quarter ended 31 Oct 2013
10 Nov 2013 $330
Quarter ended 31 Jan 2014
28 Feb 2014 $420
What is the electricity expenses payable as at 1 January 2013?

_________

42. What is the cost of sales figure for following balances?

Opening inventory
Closing inventory
Carriage outwards
Purchases
Return inwards
Carriage inwards
Discount received

$ 44,250
$ 31,350
$ 15,550
$302,200
$ 13,850
$ 9,200
$ 9,789
__________

43. Assume that the extended trial balance has been extended but the result for the
year has not been calculated.
Income Statement
Dr $2,980,777
Cr $2,997,500
Statement of financial position
Dr $10,675,888
Cr $10,659,165
What is the profit or loss for the above results?

FA2 Maintaining Financial Records Mock Test

____________

Page 12

44. What is the purpose of an extended trial balance?

a.
b.

It is a list of all balances on accounts in the nominal ledger

It is a list of all post-trial balance adjustments made in arriving at the final
accounts
It is the final statements of financial position and income statement
It is a worksheet showing the trial balance, post trial balance adjustments
and figures in the final accounts
(
)

c.
d.

45. Mary's balance on his Payable Control Account is $23,090. After some
investigation, he discovered the following errors:
-

The list of balances of Payables Ledger had been overcast by $350

A debit balance of $90 on one of the list of balances in the Payables Ledger
has been listed as credit balance
$5,100 paid to a credit supplier was debited in the payables ledger only.
An invoice of $6,200 received was omitted from the books
Discount received of $15 was recorded as $150 in the books

What is the correct balance on the Marys Payables to be reflected in the

Statement of Financial Positions?
_________________

46. What is the purpose of charging depreciation?

a.
b.
c.
d.

To allocate the cost of the non-current asset over the accounting periods of
expected to benefit from its use
To ensure net profit is not overstated
To ensure funds are set aside for replacement of non-current asset
To reflect the net book value of the non-current asset in the statement of
financial position
(
)

47. While preparing her Trial Balance, Ben discovered that a credit sales of $1,099
was credited twice in sales account and debited once in Receivables Control
Account. It this error is not corrected, what was the balance on her suspense
account?
________________

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48. A water treatment equipment was purchased by Winnie recently. The invoice
shows the following costs:
Equipment
Delivery
Maintenance charge
Sales tax

$50,000
$ 2,000
$ 4,500
$ 8,750 (recoverable)

What is the total value of capital expenditure on the invoice?

_____________

49. Micky sold a machinery on 30 June 2013. The entries in his general journal is as
shown:
Debit : Bank
Credit : Asset Disposal
What aspect of the transaction is recorded by this entry?
a.
Transfer of the original cost of the old non-current asset on disposal
b.
Cash proceeds from disposal of non-current asset
c.
Transfer of the accumulated depreciation of non-current asset
d.
Trade-in value of the old non-current asset
(

50. Wilson took goods of $300 and cash of $780 for his personal use, which of the
following accounting concepts should be considered?
a.
b.
c.
d.

Prudence
Money measurement
Accounting Entity
Consistency
(

End of Paper

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