Professional Documents
Culture Documents
1. In a statement of financial position for a sole trader the balance of the
non-current assets are usually included at:
Cost
Book value
Scrap value
Replacement value
The correct answer was D. Purchases refer to trade items only, not
non-current assets or expense items.
The correct answer was C. All the others are tangible assets as they
can be touched.
The following information should be used to answer questions 6 to 9
A. SimonStatement of financial position as at 31 March 20Y0
ASSETS £ £ £
Non-current assets
Land and property 10,000 - 10,000
Plant and machinery 8,000 4,000 4,000
Motor vehicles 4,000 1,000 3,000
22,000 5,000 17,000
Current assets
Inventories 3,000
Trade receivables 1,000
Rates prepaid 100
Cash 250
4,350
Total assets 21,350
Owners equity and liabilities
Owner's capital
Balance at 1 Apr 20X9 12,000
Add: Profit for year 3,000
15,000
Less: Drawings 1,000
Balance at 31 Mar 20Y0 14,000
Non-current liabilities
Bank loan at 15% 5,000
Current liabilities
Trade payables 2,000
Rent due 100
Interest due 250
Total current liabilities 2,350
Total liabilities 7,350
Total equity and liabilities 21,350
(1) 4. The historical cost value of non-current assets is:
£5,000
£17,000
£22,000
£27,000
The correct answer was C. The inside column in the non-current assets
section contains the historic cost information (or fair value) in respect
of the assets held by the entity.
(0) 5. The owner's capital employed in the business at the date of the
statement of financial position is:
£12,000
→ £14,000
£19,000
£21,350
The correct answer was B. The relevant balance is the closing balance
from the owner's capital section.
(1) 6. The accumulated depreciation on non-current assets is:
£5,000
£17,000
£22,000
£27,000
The correct answer was A. The middle column records the amount of
depreciation that has been released from the cost of the assets to the
income statement. This is called the accumulated depreciation
account.
(1) 7. The book value of non-current assets is:
£5,000
£17,000
£22,000
£27,000
The correct answer was B. This is obtained from the outside column
and represents the historic cost less the total accumulated depreciation,
which is shown in the middle column.
(1) 8. Which of the following is not a liability?
Bank loan
Bank deposit account
Trade payables
Tax owing
The correct answer was B. See chapter 1 for more information on the
definition of a liability.
(1) 9. Which of the following is correct?
A statement of financial position has the following sub-headings:
Non-current assets, Current assets, Owners' capital,
Non-current liabilities, Current liabilities
Current assets, Income, Non-current assets, Owners'
capital, Non-current liabilities
Owners capital, Non-current liabilities, Current
liabilities, Current assets,
Liabilities, Assets, Non-current income, Non-current
expenditure, Owners capital
The correct answer was A. See chapter 1 for more information on the
contents of a statement of financial position.
(1) 10. 12.Which order should the following items appear in the statement of
financial position?
Inventory
Cash
Trade receivables
Prepayments
2, 4, 3, 1
4, 2, 3, 1
1, 2, 3, 4
1, 3, 4, 2
→ Fixtures
Rates
The correct answer is C. The other items are expenses which should
appear in the income statement, fixtures are capital items that appear
in the statement of financial position.
(1) 13. Which of the following should appear in the statement of financial
position?
Wages
Drawings
Purchases
Heat and light
The correct answer is B. Owner drawings represent a withdrawal of
capital from the business. Capital is part of the financing of the
business hence is included in the statement of financial position.