F3 – (FA) – MCQ’s Quiz – #1 | ACCA

1. The following payables ledger control account contains some errors. All goods are purchased on credit.

What should the closing balance be when the errors have been corrected?

3. Which of the following statements are correct?

(i) A liability is a present obligation of the entity to transfer an economic resource as a result of past events.
(ii) An uncertain liability may be called a provision.
(iii) A contingent liability should be disclosed in the notes to the financial statements.

4. 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?

6. 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

7. Which of the following statements are correct?

1. Contingent assets are included as assets in financial statements if it is probable that they will arise.
2. Contingent liabilities must be provided for in financial statements if it is probable that they will arise.
3. Material non-adjusting events are disclosed by note in the financial statements.

8. The following information is available for Orset, a sole trader who does not keep full accounting records:

Inventory 1 July 20X4    --> $138,600
30 June 20X5 --> $149,100
Purchases made for year ended 30 June 20X5 --> $716,100

Orset makes a standard gross profit of 30 percent on sales.

Based on these figures, what is Orset's sales figure for the year ended 30 June 20X5?

9. A business had an opening inventory of $180,000 and a closing inventory of $220,000 in its financial statements for the year ended 31 December 20X5.

Which of the following entries for these opening and closing inventory figures are made when completing the financial records of the business?

11. The following bank reconciliation statement has been prepared by a trainee accountant at 31 December 20X5.

What should the final cash book balance be when all the above items have been properly dealt with?

12. The following information is available about the transactions of Razil, a sole trader who does not keep proper accounting records:

Opening inventory --> $77,000
Closing inventory --> $84,000
Purchases --> $763,000

Gross profit as a percentage of sales --> 30%

Based on this information, what is Razil's sales revenue for the year?

13. William's trial balance at 30 September 20X5 includes the following balances:

Trade receivables $61,427
Receivables allowance $2,079

How should these balances be reported in William's statement of financial position as at 30 September 20X5?

14. IAS 2 Inventories defines the extent to which overheads are included in the cost of inventories of finished goods.

Which of the following statements about the IAS 2 requirements in this area are correct? (select all those which are correct)

15. Which of the following items may appear in a company's statement of changes in equity, according to IAS 1 Presentation of Financial Statements? (select all those which are correct)

16. Which THREE from the following are the purposes of receivables ledger control account?

17. A limited liability company's trial balance does not balance. The totals are:

DEBIT      $384,030
CREDIT    $398,580

A suspense account is opened for the difference.

Which of the following pairs of errors could clear the balance on the suspense account when corrected?

18. At 1 July 20X4 a limited liability company's capital structure was as follows:

Share capital 1,000,000 shares of 50c each --> $500,000
Share premium account --> $400,000

In the year ended 30 June 20X5 the company made the following share issues:

1 January 20X5:

A bonus issue of one share for every four in issue at that date, using the share premium account.

1 April 20X5

A rights issue of one share for every ten in issue at that date, at $1.50 per share.

What will be the balances on the company's share capital and share premium accounts at 30 June 20X5 as a result of these issues?

19. A company's trial balance failed to agree, and a suspense account was opened for the difference.

Subsequent checking revealed that sales returns of $130 had been credited to the purchases returns account and an entry on the credit side of the cash book for the purchase of some machinery $18,000 had not been posted to the plant and machinery account.

Which TWO of the following journal entries would correct the errors?

20. Which of the following statements about intangible assets are correct?

1. If certain criteria are met, research expenditure must be recognised as an intangible asset.
2. The notes to the financial statements should disclose the gross carrying amount and the accumulated amortisation at the beginning and the end of the period for each class of intangible asset.
3. Intangible assets must be amortised over their useful life.