These are ACCA F3 (FA/FFA) Financial Accounting MCQs for Part-E of the Syllabus “Preparing a trial balance”.

These MCQs are designed in a way that students could better understand the exam format and get used to practice online. This approach will reduce exam stress and enable students to prepare better.

We request the students, Not to solve the MCQs until they have learned and finished the entire F3 (FA/FFA) Financial Accounting Chapter 17 – Correction of errors and Syllabus Area Part-E “Preparing a trial balance”.

All the questions are compulsory, so do not skip any.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course: ACCA – Associations of Chartered Certified Accountants
Fundamental Level: Knowledge, FIA – Foundation in Accounting
Subject: Financial Accounting
Paper: F3 – MA/FMA
Chapter: Correction of errors
Chapter Number: 17 of the Practice and Exam Kit
Syllabus Area: E – “Preparing a trial balance”
Questions Type: CBE MCQs
Exam Section Type: Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part E of the Syllabus; “Preparing a trial balance” of ACCA F3 (FA/FFA) Financial Accounting Module.

Time

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Students can see their result at the end of the Quiz. They can also be able to see the number of correct and wrong questions. Moreover, the explanation of wrong questions.

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F3 - Chapter 17 - Part A - MCQs

Course: ACCA - FIA
Subject: F3 (FA/FFA) Financial Accounting
Syllabus Area: E - Preparing a trial balance
Chapter in Kit: 17 - Correction of errors
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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1 / 18

An organisation restores its petty cash balance to $250 at the end of each month. During October, the total expenditure column in the petty cash book was calculated as being $210, and the imprest was restored by this amount. The analysis columns posted to the nominal ledger totalled only $200.

Which one of the following would this error cause?

The trial balance being $10 higher on the credit side

No imbalance in the trial balance

The petty cash balance being $10 lower than it should be

The trial balance being $10 higher on the debit side

2 / 18

The electricity account for Jingles Co for the year ended 30 June 20X1 was as follows.

Jingles Co expects the next bill due in September to be for the same amount as the bill received in June.

What are the appropriate amounts for electricity to be included in the financial statements of Jingles Co for the year ended 30 June 20X1?

SOFP $860 ;- P&L $3,320

SOFP $860 ;- P&L $3,060

SOFP $560 ;- P&L $3,060

SOFP $560 ;- P&L $3,320

3 / 18

The following are balances on the accounts of Luigi, a sole trader, as at the end of the current financial year and after all entries have been processed and the profit for the year has been calculated.

What is the balance on Luigi's capital account?

$64,000

$62,000

$59,000

$66,000

4 / 18

The following balances have been extracted from the nominal ledger accounts of Tanya, but the figure for bank loan is There are no other accounts in the main ledger.

What is the credit balance on the bank loan account?

5 / 18

The accountant at Investotech discovered the following errors after calculating the company's profit for 20X3:

A non-current asset costing $50,000 has been included in the purchases account
Stationery costing $10,000 has been included as closing inventory of raw materials, instead of stationery expenses

What is the effect of these errors on gross profit and net profit?

Overstatement of both gross profit and net profit by $60,000

Understatement of both gross profit and net profit by $40,000

Understatement of gross profit by $40,000 and understatement of net profit by $30,000

Understatement of gross profit by $60,000 and understatement of net profit by $50,000

6 / 18

Net profit was calculated as being $10,200. It was later discovered that capital expenditure of $3,000 had been treated as revenue expenditure, and revenue receipts of $1,400 had been treated as capital receipts.

What is the net profit after correcting this error?

$14,600

$8,600

$11,800

$5,800

7 / 18

What is an error of commission?

An error where one side of a transaction has been recorded in the wrong account, and that account is of a different class to the correct account

An error where a transaction has not been recorded

An error where the numbers in the posting have been transposed

An error where one side of a transaction has been recorded in the wrong account, and that account is of the same class as the correct account

8 / 18

Where a transaction is entered into the correct ledger accounts, but the wrong amount is used, what is the error known as?

An error of principle

An error of omission

An error of commission

An error of original entry

9 / 18

The debit side of a trial balance totals $50 more than the credit side.

Which one of the following could this be due to?

A purchase of goods for $50 being omitted from the payables control account

A receipt for $50 from a customer being omitted from the cash book

A sale of goods for $50 being omitted from the receivables control account

An invoice of $25 for electricity being credited to the electricity account

10 / 18

A company's trial balance failed to agree, the totals being:

DEBIT $815,602
CREDIT $808,420

Which one of the following errors could fully account for the difference?

The omission from the trial balance of the balance on the insurance expense account $7,182 debit

The returns outwards total of $3,591 was included in the trial balance as a debit balance

No entries made in the records for cash sales totalling $7,182

Settlement discounts received from suppliers of $3,591 were credited in error to the purchases account

11 / 18

Two types of common errors in bookkeeping are errors of principle and errors of transposition.

Which of the following correctly states whether or not these errors will be revealed by extracting a trial balance?

Option A

Option D

Option B

Option C

12 / 18

A purchase return of $48 has been wrongly posted to the debit of the sales returns account, but has been correctly entered in the supplier's account.

Which of the following statements about the trial balance would be correct?

The credit side to be $48 more than the debit side

The debit side to be $48 more than the credit side

The credit side to be $96 more than the debit side

The debit side to be $96 more than the credit side

13 / 18

The debit side of a trial balance totals $800 more than the credit side.

Which one of the following errors would fully account for the difference?

A receipt of $800 for commission receivable has been omitted from the records.

$400 paid for plant maintenance has been correctly entered in the cash book and credited to the plant asset account.

Credit note issued to a customer of $400 has been debited to trade receivables.

The petty cash balance of $800 has been omitted from the trial balance.

14 / 18

Which one of the following is an error of principle?

Plant and machinery purchased was debited to the purchases account.

Plant and machinery purchased was credited to a non-current assets account.

Plant and machinery purchased was debited to the equipment account.

Plant and machinery purchased was credited to the equipment account.

15 / 18

A company's statement of profit or loss and other comprehensive income for the year ended 31 December 20X4 showed a net profit of $83,600. It was later found that $18,000 paid for the purchase of a motor van had been debited to motor expenses account. It is the company's policy to depreciate motor vans at 25 per cent per year, with a full year's charge in the year of acquisition.

What is the company's net profit after adjusting for this error?

16 / 18

Paula Co is reconciling its receivables control account and has discovered the following items:

An invoice for $110 had been recorded in the receivables ledger as $1,100
A cash sale of $100 to a customer had been posted to the receivables ledger

Where should each of the corrections be recorded?

ITEM 1 'control account' ;- ITEM 2 'receivables ledger'

ITEM 1 'receivables ledger' ;- ITEM 2 'control account'

ITEM 1 'receivables ledger' ;- ITEM 2 'receivables ledger'

ITEM 1 'control account' ;- ITEM 2 'control account'

17 / 18

Beta Co has total assets of $650,000 and profit for the year of $150,000 recorded in the financial statements for the year ended 31 December Inventory costing $50,000, with a resale value of $75,000, was received into the warehouse on 2 January 20X4 and included in the inventory value that was recorded in the financial statements at 31 December 20X3.

What would the total assets figure in the statement of financial position, and the adjusted profit for the year figure, be after adjusting for this error?

Total assets (SOFP) $725,000 ;- Profit for year $225,000

Total assets (SOFP) $600,000 ;- Profit for year $100,000

Total assets (SOFP) $600,000 ;- Profit for year $75,000

Total assets (SOFP) $700,000 ;- Profit for year $200,000

18 / 18

The bookkeeper of Peri made the following mistakes:

Sales returns of $384 were credited to the purchases returns account. Purchases returns of $296 were debited to the sales returns account.

Which one of the following journal entries will correct the errors?

DEBIT sales returns $88, DEBIT purchases returns $88, CREDIT suspense account $176

DEBIT sales returns $768, CREDIT purchases returns $592, CREDIT suspense account $176

DEBIT sales returns $680, CREDIT purchases returns $680

DEBIT suspense account $176, CREDIT sales returns $88, CREDIT purchases returns $88

Your score is

F3 (FA/FFA) – Chapter 17 – PART E – CBE MCQs – ACCA