ACCA FA - Mock Time remaining

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Exam - updated
Section A – Contains 35 questions. All questions worth
2 marks.

* Read each question carefully.

* You can revisit questions and change your answers

at any time during the exam.

* The only permitted characters for numerical answers

are:

- Numbers

- One full stop as a decimal point if required

- For example: 10234.35

- No other characters, including commas, are

accepted.

Q1(a). A sole trader's financial statements are private,

whereas a company's financial statements are publicly
filed

TRUE

Q1(b). Both sole traders and shareholders of companies

are not personally liable for any losses that the business
might make

FALSE

Q1(c). Only companies, not sole traders have capital

invested into the business.

FALSE

Q1(d). The drawings by owners are called dividends in

sole traders and partnerships and wihdrawals/drawings in
LLCs.

FALSE

Q2. Which of the following explains the imprest system

of operating petty cash?

A) Weekly expenditure cannot exceed a set

amount
B) The exact amount of expenditure is reimbursed
at intervals to maintain a fixed float
C) All expenditure out of the petty cash must be
properly authorized
D) Regular equal amounts of cash are transferred
into petty cash at intervals

Q3. Arthur had net assets of $19,000 at 30 April 20X7.

During the year to 30 April 20X7 he had introduced $9,800

additional capital into the business. His profits for the year

were $8,000 and he had withdrawn $4,200.

What had been his net assets at 1 May 20X6?

5400

Q4. Annie is a sole trader who does not keep full

accounting records. The following details relate to her

transactions with credit customers and suppliers for the

year ended 30 June 20X6.

Trade receivables, 1 July 20X5

130,000

Trade payables, 1 July 20X5

60,000

Cash received from customers

686,400

Cash paid to suppliers

302,800

Discounts received

2,960

Contra between payables and receivables ledger

2,000

Trade receivables, 30 June 20X6

181,000

Trade payables, 30 June 20X6

84,000

What figure should appear in Annie’s statement of

profit or loss for the year ended 30 June 20X6 for

purchases? 331760

Q5. At 30 June 20X8 a company's allowance for

receivables was $49,000.
At 30 June 20X9 trade receivables totaled $520,000.
It was decided to write of debts totaling $40,000 and the
allowance for receivables was to be adjusted to the
equivalent of 5% of the outstanding trade receivables.

What figure should appear in the statement of profit or

loss for the year ended 30 June 20X9 for these items?

A) $15,000
B) $61,000
C) $30,000
D) $35,000

Q6. Which TWO of the following errors would cause

the total of the debit column and the total of the credit
column of a trial balance not to agree?

Rent received was included in the trial balance as

a debit balance
A purchase of non-current assets was omitted
from the accounting records
A cheque received from a customer was credited
to cash and correctly recognised in receivables
A transposition error was made when entering a
sales invoice into the sales day book

Q7. A company's statement of profit or loss for the year

ended 31 December 20X9 showed a net profit of $90,000.

It was later found that $20,000 paid for the purchase of a

motor van had been debited to the motor expenses

account.

It is the company's policy to depreciate motor vans at

20% per year on a straight-line basis, with a full year's

charge in the year of acquisition.

What would the net profit be after adjusting for this

error? 106000

Q8. A company receives rent from a large number of

properties. The total received in the year ended 30 April
20X6 was $481,200.

The following were the amounts of rent in advance and in

arrears at 30 April 20X5 and 20X6.

30 April 20X5 30 April 20X6

$ $
Rent received in advance
28,700 31,200
Rent in arrears (all subsequently received)
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 April 20X6?

A) $501,500
B) $475,900
C) $460,900
D) $486,500

Q9. A company has a year end of 31 December each year.

At December 20X0 they made an accrual for electricity of

$280

During the year to 31 December 20X1 they paid $2,450 for

electricity and at the end of the year they estimated that

there was $350 still owing.

What is the total electricity expense for the year ended

31 December 20X1? 2520

Q10. A company's motor vehicles (at cost) account at 30

June 20X6 is as follows:

What opening balance should be included in the

following period's trial balance for Motor vehicles (at
cost) at 1 July 20X6?

A) $48,750 Cr
B) $36,750 Cr
C) $36,750 Dr
D) $48,750 Dr

Q11. A company has a year-end of 31 January each year.

They purchased a car for $12,000 on 1 January 20X8 and
sold it for $5,000 on 31 March 20Y2
Their depreciation policy is to charge 20% reducing
balance, with full-year charge in the year of purchase and
none in the year of sale.

What was the profit or loss on the sale of the car?

A) $1,854.27 profit
B) $1,067.84 profit
C) $84.80 profit
D) $1,144.00 loss

Q12. Which of the following statements are correct?

1) Capitalised development expenditure must be

amortised over a period not exceeding five years

2) Capitalised development costs are shown in the

statement of financial position under the heading of non-
current assets

3) If certain criteria are met, research expenditure must be

recognised as an intangible asset

A) 2 only
B) 2 and 3
C) 1 only
D) 1 and 3

Q13. An item of inventory which was purchased for $500

is expected to be sold for $1,200, although $250 will need

to be spent on it in order to achieve the sale. To replace

the same item of inventory will cost $650.

How should this item of inventory be valued in the

accounts? 300

Q14. The total of the list of balances in Valley's payables

ledger was $438,900 at 30 June 20X6. This balance did
not agree with Valley's payables ledger control account
balance. The following errors were discovered:

1) A contra entry of $980 was recorded in the payable’s

ledger control account, but not in the payable’s ledger
2) The total of the purchase returns daybook was
undercast by $1,000
3) 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 as accounts payable at 30 June
20X6?

A) $436,830
B) $437,830
C) $439,790
D) $438,010

Q15. On 1 January 20X3, the capital structure of Q, a

limited liability company, was as follows:

Share capital (1,000,000 ordinary shares of 50c each)

$500,000

Share premium

$300,000

On 1 April 20X3 the company made a rights issue of

200,000 50c shares at $1.30 each, and on 1 July made a

bonus issue of 1 share for every 4 in issue at that time,

using the share premium account for this purpose.

What are the balances on the accounts after the bonus

issue?

Share capital 750000

Share premium 310000

Q16. According to IAS 2 Inventories, which TWO of the

following costs should be included in valuing the
inventories of a manufacturing company?

Carriage inwards
General administrative overheads
Carriage outwards
Depreciation of factory machinery

Q17. In accordance with IAS 37 Provisions, Contingent

Liabilities and Contingent Assets, which of the
following criteria must be present in order for a
company to recognize a provision?

1 There is a present obligation as a result of past events.

2 It is probable that a transfer of economic benefits will be
required to settle the obligation.
3 A reliable estimate of the obligation can be made.

A) All three criteria must be present.

B) 1 and 2 only
C) 1 and 3 only
D) 2 and 3 only

Q18. Your firm's cash book at 30 April 20X8 shows a

balance at the bank of $2,490. Comparison with the bank
statement on the same date reveals the following
differences:

$
Unpresented cheques
840
Bank charges not in cash book
50
Receipts not yet credited by the bank
470
Dishonored cheque not in cash book
140

What is the adjusted bank balance per the cash book

at 30 April 20X8?

A) $1,460
B) $2,300
C) $2,580
D) $3,140

Q19. W Co, a sales tax registered trader, bought a new

printing machine. The cost of the machine was $80,000,
excluding sales tax at 17.5%. The delivery costs were
$2,000 and installation costs were $5,000. Before using
the machine to print customers' orders, a test was
undertaken and the paper and ink cost $1,000.

What should be the cost of the machine in the

company's statement of financial position?

A) $80,000
B) $82,000
C) $87,000
D) $88,000

Q20. Beta purchased some plant and equipment on 1 July

20X1 for $40,000. The scrap value of the plant in ten
years' time is estimated to be $4,000. Beta's policy is to
charge depreciation on a straight-line basis, with a
proportionate charge in the period of acquisition.

What is the depreciation charge on the plant in Beta's

financial statements for the year ended 30 September
20X1?

A) $900
B) $1,000
C) $3,600
D) $4,000

Q21. During the year ended 31 December 20X1, Alpha

Rescue had the following transactions on the receivables
ledger.

$
Receivables at 1 January 20X1
100,000
Receivables at 31 December 20X1
107,250
Goods returned
12,750
Amounts paid into the bank from receivables
225,000
Discount received
75,000
Discounts allowed
5,000

What were the sales for the year?

A) $107,250
B) $240,000
C) $250,000
D) $320,000

Q22. The annual sales of a company are $235,000

including sales tax at 17.5%. Half of the sales are on
credit terms, half are cash sales. The receivables in the
statement of financial position are $23,500.

What is the output tax?

A) $17,500
B) $20,562.5
C) $35,000
D) $41,125

Q23. Your organisation has received a statement of

account from one of its suppliers, showing an
outstanding balance due to them of $1,350. On
comparison with your ledger account, the following is
determined:

• Your ledger account shows a credit balance of $260

• The supplier has disallowed a cash discount of $80 due
to late payment of an invoice
• The supplier has not yet allowed for goods returned at
the end of the period of $270
• Cash in transit of $830 has not been received by the
supplier

Following consideration of these items, what is the

unreconciled difference between the two records?

A) $nil
B) $10
C) $90
D) ($180)

Q24. A company is preparing its statement of cash flows

for the year ended 31 December 20X2. Relevant extracts
from the accounts are as follows.
Statement of profit or loss
$
Depreciation
15,000
Profit on sale of non-current assets
40,000

Statement of financial position

20X2 20X1

$ $
Plant and machinery – cost
185,000 250,000
Plant and machinery – depreciation
45,000 50,000

Plant and machinery additions during the year were

$35,000. What is the cash flow arising from the sale of
non-current assets?

A) $40,000
B) $100,000
C) $120,000
D) $135,000

Q25. Which, if any, of the following journal entries is

correct according to their narratives?

Dr Cr

$ $
1 B receivables ledger account
450
Irrecoverable debts account
450
Irrecoverable balance written off
2 Investments: Q ordinary shares
100,000
Share capital
100,000

80,000 shares of 50c each issued at $1·25 in

exchange for shares in Q.
3 Suspense account
1,000
Motor vehicles account
1,000
Correction of error – debit side of Motor
vehicles account undercast by $1,000

A) None of them
B) 1 only
C) 2 only
D) 3 only

Q26. Jay Co values inventories on the first in first out

(FIFO) basis. Jay Co has 120 items of product A valued at
$8 each in inventory at 1 October 20X9. During October
20X9, the following transactions in product A took place.

3 October Purchases 180

items at $9 each
4 October Sales 150
items at $12 each
8 October Sales 80
items at $15 each
18 October Purchases 300
items at $10 each
22 October Sales 100
items at $15 each

What is the closing balance on the inventory account

at 31 October 20X9?

A) $1,500
B) $2,560
C) $2,628
D) $2,700

Q27. Fred’s trial balance did not balance so he opened a

suspense account with a debit balance of $346. Control
accounts are maintained for receivables and payables.
Fred discovered the following:

1 The sales day book was undercast by $400.

2 Purchases of $520 from the purchases day book have
only been recorded in the payables ledger control
account.
3 Profit on sale of non-current assets of $670 had been
recorded in the sundry income account as $760.

What is the remaining balance on Fred’s suspense

account after these errors have been corrected?

A) $264 credit
B) $136 debit
C) $956 debit
D) $1,266 debit

Q28. Where, in a company's financial statements

complying with International Financial Reporting
Standards, should you find the proceeds of non-
current assets sold during the period?

A) Statement of cash flows and statement of

financial position
B) Statement of changes in equity and statement
of financial position
C) Statement of profit or loss and other
comprehensive income and statement of cash
flows
D) Statement of cash flows only

Q29.

What should be the depreciation charge for the year

ended 31 December 20X5?

A) $67,000
B) $70,000
C) $64,200
D) $68,600

Q30. A business sublets part of its office accommodation.

The rent is received quarterly in advance on 1 January, 1

April, 1 July and 1 October. The annual rent has been

$24,000 for some years, but it was increased to $30,000

from 1 July 20X5.

What amounts for this rent should appear in the

company's financial statements for the year ended 31

January 20X6?

SPLOCI

SOFP

Q31. Which of the following events after the reporting

period would normally qualify as adjusting events
according to IAS 10 Events after the reporting period?

1 The bankruptcy of a credit customer with a balance

outstanding at the end of the reporting period
2 A decline in the market value of investments
3 The declaration of an ordinary dividend
4 The determination of the cost of assets purchased
before the end of the reporting period

A) 1, 3 and 4
B) 1 and 2 only
C) 2 and 3 only
D) 1 and 4 only

Q32. On 1 September 20X6, a business had inventory of

$380,000. During the month, sales totalled $650,000 and

purchases $480,000. On 30 September 20X6 a fire

destroyed some of the inventory. The undamaged goods

in inventory were valued at $220,000. The business

operates with a standard gross profit margin of 30%.

Based on this information, what is the cost of the

inventory destroyed in the fire?

Q33. A business received a delivery of goods on 29 June

20X6, which was included in inventory at 30 June 20X6.
The invoice for the goods was recorded in July 20X6.

What effect will this have on the business?

1 Profit for the year ended 30 June 20X6 will be

overstated.
2 Inventory at 30 June 20X6 will be understated.
3 Profit for the year ending 30 June 20X7 will be
overstated.
4 Inventory at 30 June 20X6 will be overstated.

A) 1 and 2
B) 2 and 3
C) 1 only
D) 1 and 4

Q34. At 1 January 20X6, a company's capital structure

was as follows:

Ordinary share capital 2,000,000 shares of 50c each

1,000,000

Share premium account

1,400,000
In January 20X6 the company issued 1,000,000 shares at

$1·40 each.

In September 20X6 the company made a bonus issue of 1

share for every 3 held using the share premium account.

What were the balances on the company's share

capital and share premium accounts after these

transactions?

Share capital

Share premium

Q35. The trial balance of a company did not balance, and

a suspense account was opened for the difference.

Which of the following errors would require an entry to

the suspense account in correcting them?

(1) Cash payment to purchase a motor van had been

correctly entered in the cash book but had been debited
to the motor expenses account.
(2) The debit side of the wages account had been
undercast.
(3) The total of the discounts allowed column in the cash
book had been credited to the discounts received
account.
(4) A cash refund to a customer had been recorded by
debiting the cash book and crediting the customer's
account.

A) 1 and 2
B) 2 and 3
C) 3 and 4
D) 2 and 4

Section B – Contains 2 questions. Each question worth

15 marks.

For fill in the blanks questions:

* If text is required:

- Choose one of the options provided

- Write all your answers with UPPERCASE and ENG

alphabet as provided.

* If the numerical answer is required, the allowed

characters are:

- Numbers

- No commas are required

- For example: 10250

Q36. The following information relates to Geofrost Co, a

limited liability company, for the year ended 31 October

20X7.

Extracts from the statement of profit or loss for the

year ended 31 October 20X7

$’000

Profit before tax

15,000

Less tax

4,350

Profit for the year

10,650

Statement of financial position as at 31 October

20X7 20X6

$’000 $’000

Assets

Non-current assets

44,282 26,574

Current assets

Inventory

3,560 9,635

Receivables

6,405 4,542

Cash

2,045 1,063

Total current assets

12,010 15,240

Total assets

56,292 41,814

Equity and liabilities

Equity

Ordinary share capital

19,365 17,496

Retained earnings

17,115 6,465

Total equity

36,480 23,961

Non-current liabilities

Loan

8,000 10,300

Current liabilites

Bank overdraft

1,230 429

Trade payables

7,562 4,364

Taxation

3,020 2,760

Total equity and liabilities

56,292 41,814

Additional information

1) Depreciation expense for the year was $4,658,000

2) Assets with a carrying amount of $1,974,000 were

disposed of at a profit of $720,000

Complete the statement of cash flows for the year

ended 31 October 20X7 for Geofrost Co.

Cash flows from operating activities

Write one of them:

Write one of them:

* PBT for Profit before tax

* A for Add

* PFY for Profit after tax

$'000 * S for Subtract

Adjustments:

Depreciation

Profit on disposal of non-current assets

Inventory

Receivables

Payables

Tax paid

Net cash from operating activities

Cash flows from investing activities

Payments to acquire non-current assets

Proceeds from the sale of non-current assets

Net cash from investing activities

Cash flows from financing activities

Proceeds from issue of share capital

Repayment of loans

Net cash from financing activities

Net movement in cash and cash equivalents

Cash and cash equivalent at the beginning

Cash and cash equivalent at the end of the period

Q37. Malright, a limited liability company, has an

accounting year-end of 31 October. The accountant is

preparing the financial statements as at 31 October 20X7.

A trial balance has been prepared.

Task 1 - 4 marks

Do each of the following items belong on the

statement of financial position (SOFP) as at 31

October 20X7?

Dr Cr Belongs on SOFP

$'000 $'000 Write one of them:

* Y for Yes

* N for No

Buildings at cost

740

Buildings acc. depreciation @ 1-Nov-16

60

Plant at cost

220

Plant acc. depreciation @ 1-Nov-16

110

Bank balance

70

Revenue

1,800

Net purchases

1,140

Inventory @ 1-Nov-X6

160

Cash

20

Trade payables

250

Trade receivables

320

Administrative expenses

325

Allowance for receivables @ 1-Nov-X6

10

Retained earnings @ 1-Nov-X6

130

Equity shares, $1

415

Share premium account

80

2,925 2,925

Q37. Task 2 - 3 marks

The allowance for receivables is to be increased to 5% of

trade receivables. The allowance for receivables is treated

as an administrative expense.

The year-end journal for allowance for receivables is given

below. Prepare the double-entry by selecting the correct

option for each row

Write one of them:

DR for Debit

CR for Credit

NO for No debit or credit

Trade receivables

Administrative expenses

Allowance for receivables

Revenue

Complete the following:

The amount to be included in the statement of profit or

loss after the allowance is increased to 5% of trade

receivables is $ '000

Q37. Task 3 - 5 marks

Plant is depreciated at 20% per annum using reducing

balance method and buildings are depreciated at 5% per

annum on their original cost. Depreciation is treated as a

cost of sales expense.

The year-end journal entry for buildings and plant

depreciation is given below. Using the information

above, prepare the double-entry by selecting the

correct option for each row.

Write one of them:

DR for Debit

CR for Credit

NO for No debit no credit

Administrative expenses

Cost of sales

Buildings cost

Plants cost

Buildings accumulated depreciation

Plants accumulated depreciation

Calculate the depreciation charge for the below for the

year ended 31 October 20X7. Use the information

above to help you.

Buildings

$ '000

Plant

$ '000

Q37. Task 4 - 1.5 marks

Closing inventory has been counted and is valued at

$75,000.

Ignoring the depreciation charge calculated earlier,

what is the cost of sales for the year?

$ '000

Q37. Task 5 - 1.5 marks

An invoice of $15,000 for energy costs relating to the

quarter ended 30 November 20X7 was received on 2

December 20X7. Energy costs are included in

administrative expenses.

Complete the following statements:

The double entry to post the year-end adjustment for

energy costs is:

Write one of them:

ACC for Accrual

ADM for Administrative expenses

Dr

Cr

The amount to be posted within the year-end

adjustment double-entry above is $ '000

Submit

Answered 28 of 44 (63%)

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