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PAPER F3 (INT) : FINANCIAL ACCOUNTING
Chapter 1 Introduction to accounting
Pudsey wishes to set up a management consultancy business. It is important to him that his financial information is not available to competitors. Which type of business structure is most appropriate for Erin on the basis of confidentiality of accounts? A B C D company sole trader either neither (1 mark)
Which of the following are true? A B C D Financial accounts are prepared primarily for the purposes of the calculation of tax by the relevant authorities Financial accounts are prepared primarily for the use of the management in making strategic decisions Financial accounts are more accurate than management accounts Financial accounts are mandatory accounts which only reflect past performance (1 mark)
LECTURER RESOURCE PACK – QUESTIONS
Chapter 2 Statement of financial position and income statement
Which of the following is an application of the business entity concept? A B C D A partner paying her child’s school fees from the business bank account accounts for it as drawings For accounting purposes, the Directors of a company are treated as employees Accounts are prepared on the basis that a business will continue for the foreseeable future Separate capital and current accounts are maintained for each partner (1 mark)
Esme started in business on 1 January 20X6, having won $250,000 on the lottery. She used $100,000 of this money to pay off her mortgage and then invested the remainder in the business. Esme took $100 per week from the business to cover living expenses, other than for 2 weeks in August when she took $500. At 31 December 20X6, the assets and liabilities of the business were as follows: $ Premises 45,000 Fixtures and fittings 75,000 Amounts owed by customers 2,300 Amounts owed to suppliers 10,000 Goods in stock 17,890 Gas bill outstanding 560 Cash at bank 1,200 What profit or loss did Esme make in her first year of trade? A B C D $12,970 profit $12,970 loss $13,170 loss $13,170 profit (2 marks)
Harry has prepared his draft financial statements for the year ended 31 May 20X7. He discovers that he has capitalised repairs to the delivery van amounting to $235. Ignoring depreciation, what is the effect of this error? A B C D Net assets and net current assets are $235 too high Profit and capital are $235 too high Net assets and capital are $235 too low Profit is $235 too low and net current assets are $235 too high (2 marks)
PAPER F3 (INT) : FINANCIAL ACCOUNTING
Chapter 3 Double entry bookkeeping
Dolores purchases goods for resale with a price of $700. As she is a regular customer, the supplier offers her a trade discount of 1%; she is also offered a settlement discount of 5% if she pays within 7 days, which she does. What amounts should be recorded in the income statement? Purchases A B C D $700 $693 $658 $658 Discounts received $42 $35 $42 $35 (2 marks)
The correct double entry to record goods returned from a credit customer is Dr A B C D Returns outwards Receivables Receivables Returns inwards Cr Receivables Returns outwards Returns inwards Receivables (1 mark)
A business has a bank overdraft balance of $190. What is the balance on Abby’s cash account after the following transactions? 1 2 A B C D Abby paid off the $600 balance on a suppliers’ account, taking advantage of a 3% settlement discount. $780 was received from a customer. They had taken advantage of a 2.5% cash discount. $388 Dr $8 Dr $11.50 Dr $368.50 Dr (2 marks)
LECTURER RESOURCE PACK – QUESTIONS
Which of the following is correct? A Dr balances include: Returns inwards Discounts allowed Carriage inwards B Returns outwards Discounts allowed Carriage outwards C Returns inwards Discounts received Purchases D Returns outwards Cash Land and buildings Cr balances include: Capital Sales Bank overdraft Capital Sales Bank loan Sales Returns outwards Accrued income Capital Returns inwards Accrued income (2 marks)
After the reporting date they were sold for $8 each. General administrative overheads. This total includes two inventory lines about which the inventory taker is uncertain. Remedial work after the reporting date cost $1. with selling expenses of $150. 2 and 4 only 2 and 3 only 1 and 3 only (2 marks) 6 KAPLAN PUBLISHING .800 $292. All four items 1.650 $283.PAPER F3 (INT) : FINANCIAL ACCOUNTING Chapter 4 Inventory The closing inventory of Epsilon amounted to $284. Storage costs of finished goods.500. 100 items which had cost $10 each.800 and they were then sold for $20 each.000 at 30 September 20X4. These items were found to have been defective at the reporting date. $283.150 $283. Selling expenses were $400. Foreman’s wages.950 (2 marks) 2 What figure should appear in Epsilon's statement of financial position for inventory? A B C D According to IAS 2 Inventories. which of the following costs should be included in valuing the inventories of a manufacturing company? 1 2 3 4 A B C D Carriage inwards. 1 500 items which had cost $15 each and which were included at $7. the reporting date.
What effect will any required adjustment have on Aurora’s profits? A B C D Profit decreases by $75 Profit decreases by $25 No change to profit Profit decreases by $50 (2 marks) Algernon starts trading on 1 July 20X6 and values inventory using AVCO on a periodic basis.LECTURER RESOURCE PACK – QUESTIONS Peanuts.010 $6. a company. During the year ended 30 April 20X7 the following transactions took place: 20X6 1 July 1 November 20X7 1 February 15 April A B C D $8.350 after incurring selling costs of $75.732 None of these figures (2 marks) Purchased Sold 45 widgets 72 widgets @ $130 each Purchased Sold 120 widgets 60 widgets @$120 each What is the value of the company’s inventory of engines at 30 April 20X7? Having prepared draft accounts. She discovers that some goods included at cost of $2.577 $1. What is the value of inventory at the end of July after the following purchases and sales? 3 July Purchases 6 July Sales 10 July Sales 16 July Purchases 23 July Sales A B C D $1.495 (2 marks) 200 units @ $12 each 50 units 75 units 100 units @ $15 each 60 units KAPLAN PUBLISHING 7 .360 $7. values its inventory using the first in first out method.680 $1. valued at $80 each.500 $1. At 1 May 20X6 the company had 30 widgets in inventory.300 can be sold for $2. Aurora reviews closing inventory.
75 Increase by $65.75 Increase by $38. a wine merchant.99 $4.20 Selling price per bottle $10.99 $12.PAPER F3 (INT) : FINANCIAL ACCOUNTING What are the correct journal entries to record inventory at the year end? Opening inventory A B C D Dr Inventory (B/S) Cr Income statement Dr Income statement Cr Inventory (B/S) – – Closing inventory Dr Income statement Cr Inventory (B/S) Dr Inventory (B/S) Cr Income statement Dr Inventory (B/S) Cr Income statement Dr Inventory (B/S) Cr Purchases (1 mark) In times of falling prices. FIFO profit is lower than AVCO profit.75 Costs to sell per bottle $0. What effect will any required adjustment have on profit and net assets? Profit A B C D Reduce by $65. All of them None of them 2 and 3 1 only (2 marks) Tipsee. Cost of sales using the FIFO method is greater than that using AVCO.75 $1.35 Increase by $38.75 Reduce by $65.35 Reduce by $38.35 Net assets Reduce by $65.20 – – Tipsee has currently included all wines in her financial statements at cost. provides the following information about wines held in store at the year end: Cost per bottle 100 bottles Rioja 250 bottles Merlot 75 bottles Chablis 500 bottles Pinot noir $2.90 $4.75 Increase by $38.50 $3. which of the following statements is true? 1 2 3 A B C D Closing inventory valued using FIFO is greater than that valued using AVCO.99 $3.65 $3.35 (2 marks) 8 KAPLAN PUBLISHING .
Cr Sales tax $136. Bruce sells goods for $456.772 $32. He also recorded the following transactions in the month: Sales inclusive of sales tax Purchases exclusive of sales tax A B C D $11.500. Mikhail owed the tax authorities $12.174 Cr $14.5% sales tax and purchases goods for a tax inclusive price of $235.000 Dr Purchases $916. he paid $11.000 (2 marks) At the start of January 20X7.000. How should Chan record this transaction.626 Dr $21.500.000. Cr Payables $780. How much sales tax (to the nearest $) is payable by Bruce in respect of the quarter? A B C D $38. Cr Payables $780.5%? A B C D Dr Purchases $780.800 $157.000 exclusive of 17. Dr Sales tax $136.188.LECTURER RESOURCE PACK – QUESTIONS Chapter 5 Sales tax Which of the following statements is NOT true? A B C D Purchases are debited to the income statement net of sales tax If input tax exceeds output tax the difference is recoverable from the tax authorities Sales tax is charged on the selling price net of all discounts Sales tax is charged on all goods and services (1 mark) During the quarter ended 30 November 20X6.500 Dr Purchases $780. Cr Sales tax $136. assuming that he is registered for sales tax at 17.500.905 Cr $9.000.920 What is the balance on Mikhail’s tax account at the end of January 20X7? KAPLAN PUBLISHING 9 .890 in respect of sales tax.500 Dr Purchases $916.757 (2 marks) Chan purchased goods on credit for a net price of $780.000.642 $44.900. On 15th January. Cr Payables $780.000.500. Dr Sales tax $136.154 Dr (2 marks) $253. Cr Payables $916.887 $26.
000 $16.800 (2 marks) Rent paid on 1 October 20X2 for the year to 30 September 20X3 was $12.800 31 Dec 20X7 $ 2.000 (2 marks) A business compiling its accounts for the year to 31 January each year pays rent quarterly in advance on 1 January.500 $38.000 per year as from 1 July 20X3.200 rental income. Which of the following figures is the rent expense which should appear in the income statement for the year ended 31 January 20X4? A B C D $39.400 What figure for rental income should be recorded in the income statement for the year ended 31 December 20X8? A B C D $48. Horatio received $49. After remaining unchanged for some years. The amounts of rent received in advance and due in arrears were as follows: 31 Dec 20X8 $ Rent received in advance Rent due in arrears 2. 1 April. and rent paid on 1 October 20X3 for the year to 30 September 20X4 was $16.400 1.PAPER F3 (INT) : FINANCIAL ACCOUNTING Chapter 6 Accruals and prepayments In the year to 31 December 20X8.000.500 $37. 1 July and 1 October each year.600 1.000 per year to $42. What figure for rent expense should be shown in the income statement for the year ended 31 December 20X3? A B C D $12.400 $49.000 $15.000.500 $39. the rent was increased from $36.000 $13.000 (2 marks) 10 KAPLAN PUBLISHING .000 $49.600 $49.
He realises that he has not taken the following into account: There was an interest accrual at the end of the previous year for $270.000 in sundry payables $1. This has not been recorded in the accounts.900 $9. April.LECTURER RESOURCE PACK – QUESTIONS A company has sublet part of its offices and in the year ended 30 November 20X3 the rent receivable was: Until 30 June 20X3 From 1 July 20X3 $8.785 $129. On 29 December 20X7 an interest premium of $780 was paid to cover the period from 1 December 20X7 to 30 November 20X8.000 per year Rent was received quarterly in advance on 1 January.465 $130.000 in sundry payables $2.245 $130. This was not brought forward into the current year’s accounts. What amounts should appear in the company’s financial statements for the year ended 30 November 20X3? Income statement Rent receivable A B C D $9.400 per year $12. What is Oscar’s revised profit? A B C D $130.000 in sundry payables $1.200 $9. July.000 in sundry receivables (2 marks) Oscar’s draft income statement shows a profit of $129.900 Statement of financial position $2.800 for the year ended 31 December 20X7. and October each year.005 (2 marks) KAPLAN PUBLISHING 11 .900 $10.
PAPER F3 (INT) : FINANCIAL ACCOUNTING Ariadne pays her rent in advance and insurance premiums in arrears. July and October each year.111 $6.000 to her landlord and $6.800 $95. At 1 January 20X5.500 sundry payables $2.800 $88.250 to her insurer.000 pa $15.500 covering the period 1 December to 28 February. her rent account showed a debit balance of $12.500 sundry payables $1.250 sundry payables $2. rent receivable was: To 30 June 20X8 From 1 July 20X8 $12.300 $88. Ariadne paid $89.389 $6.000 paid to her landlord was a bill for $19. April.300 Insurance $6. What is the income statement charge for each of these items? Rent A B C D $95. Included in the $89.800 and her insurance account showed a credit balance of $450.111 (2 marks) A company has sublet part of its offices and in the year ended 30 November 20X8.000 pa Rent was received quarterly in arrears on 1 January. During the year ended 31 December 20X5. What amounts should appear in the company’s financial statements for the year ended 30 November 20X8? Income statement Rent receivable A B C D $13.500 $13. Ariadne received a bill for insurance for $589 to cover the month of December.250 $13. On 7 January.750 Statement of financial position $2.500 sundry receivables (2 marks) 12 KAPLAN PUBLISHING .389 $6.250 $13.
100 _________ _________ 11.LECTURER RESOURCE PACK – QUESTIONS Profucius has prepared the following light and heat account for the year ended 31 August 20X6: Light and heat expense $ Prepayment b/f 9.860 (2 marks) Ollivander provides the following detail about his electricity account for the year ended 30 April 20X7.950 1 December 20X6 – 28 February 20X7 2.500 $9.770 1 June 20X6 – 31 August 20X6 1.560 (2 marks) Which of the following is NOT true? A B C D Accrued income is a liability Deferred income decreases profit An accrual decreases profit A prepayment increases capital (1 mark) 13 KAPLAN PUBLISHING .940 $6.540 Income statement (β) 1.890 $7.760 _________ _________ Cash paid Accrual c/f $ 1. 30 April.200 10. What should be Profucius’ income statement charge for light and heat? A B C D $9.640.100 What cash amount did Ollivander pay for electricity during the year? A B C D $7.800 1 September 20X6 – 30 November 20X6 1. $ Opening balance 340 Prepayment Closing balance 500 Prepayment Bills covering periods: 1 March 20X6 – 31 May 20X6 1.830 $7. 31 July and 31 October The bill for the year ended 31 October 20X6 was eventually received in November amounted to $2.300 11.220 $11.300 Profucius has calculated the year end accrual based on the following information: Profucius changed his payment arrangements with the utility provider during the year and as of 1 March 20X6 now pays light and heat in arrears on 31 January.040 1 March 20X7 – 31 May 20X7 2.620 $12.
the company wishes to set the allowance at 5% of receivables. which was five per cent of the receivables at that date.500 of debts as irrecoverable and. based on past experience. The receivables balance at 31 October 20X2 was $120.500 (2 marks) The allowance for receivables in the accounts of Beluga at 31 October 20X1 was $9.000 (2 marks) Which of the following statements is NOT true? A B C D Credit limits help to reduce the risk of irrecoverable debts The provision of credit will improve the cash flow of a business An aged receivables analysis helps to keep track of overdue debts Creating an allowance for receivables is an application of the prudence concept. At 30 September 20X3 receivables totalled $868.000 were written off.000 $33.PAPER F3 (INT) : FINANCIAL ACCOUNTING Chapter 7 Irrecoverable debts and allowances for receivables At 30 September 20X2 a company’s allowance for receivables amounted to $38.925 $70.000.000 $3. to keep the allowance for receivables at 5% of receivables.500. What should be the charge in the income statement for the year ended 30 September 20X3 for the total of irrecoverable debts and the allowance for receivables? A B C D $42. During the year ended 31 October 20X2. irrecoverable debts of $5.000 $5. based on past experience. What is the total charge for irrecoverable debts and the allowance for receivables in the income statement for the year ended 31 October 20X2? A B C D $2.500 $32. (1 mark) 14 KAPLAN PUBLISHING .000 $8. It was decided to write off $28.000.000 and.
162.205 $34.300 Irrecoverable debt written off 1.100 $21.400 6.100.00 (2 marks) The following is an extract from Jeremiah’s general ledger: Receivables $ 14.100 $37.715 What should be the receivables balance? A B C D $32.800 as irrecoverable At the year end Gabriela decided to make an allowance for 2% of outstanding receivables What amount is shown on Gabriela’s statement of financial position in respect of receivables. The following information is also relevant: • • • Credit customers paid her $298.777 Balance b/f Credit sales Contra Discount received ___________ ___________ ___________ ___________ 217.230 $7.700 She wrote off a debt of $7.750.355 Cash received 12.693 $33.540 51.370 (2 marks) After writing off irrecoverable debts.193 $31.080.070 $21.200 owing by Sharmini Ravinder also wishes to maintain a general allowance of 5% of outstanding receivables.760 13.715 217. Gabriela made credit sales of $328.705 (2 marks) KAPLAN PUBLISHING 15 . Ravinder has outstanding receivables of $238. and what is the charge to the income statement for irrecoverable debt expense? Receivables A B C D $37.542 $7. He identifies two specific amounts for which he wishes to make full allowance: • • $450 owing by Syed $1.LECTURER RESOURCE PACK – QUESTIONS During her first year of trading.250 1.500 Sales returns Increase in allowance for receivables Balance c/f $ 988 143.00 $237.00 $225.000.50 $225.245.070 Irrecoverable debt expense $8. What amount is shown on Ravinder’s statement of financial position in respect of receivables? A B C D $225.560 Interest charged for late payment 189.800 $8.
it is decided that the allowance for receivables should be $20. In the following year.000 owed from George. Louis’ receivables account shows a balance of $137.700 $339.500.000 Dr $1.700 (2 marks) $413.691 $4.500 $51.200 $391. he wrote off debts totalling $18. this debt was paid. What is the balance on the irrecoverable debts expense account at the year end. What entry should Alex make to record the receipt? A B C D Dr Cash Dr Cash Dr Receivables Dr Cash Cr Receivables Cr Irrecoverable debt expense Cr Irrecoverable debt expense Cr Sundry income (1 mark) At 30 September 20X0.700 $382.000. During the year ended 30 September 20X1.000 Cr (2 marks) At 1 January 20X6. Louis also wishes to make an allowance for 2% of outstanding debt and discovers that as a result the allowance is 10% greater than at the previous year end.000.500 $30. who has been declared bankrupt $450 from Tom. and at the end of the year.000.200 $413.500 $30.700 $360.000. What should be included in the income statement in respect of irrecoverable debt expense? A B C D $35.000 Dr $1.724 (2 marks) Alex wrote off a debt in the year ended 30 June 20X5. the balance on Leggo’s receivables account was $413.699 $4.200. Zach had an allowance for receivables of $37.000. It was decided to write off $22. What are the final amounts for inclusion in Leggo’s statement of financial position at 31 December 20X6? Trade receivables (gross) A B C D 16 Allowance $51.715 $4. At 31 December 20X6. to the nearest $? A B C D $4.200 $391.000 Dr $38. who has disappeared. He has identified the following amounts which he wishes to write off: $4. Leggo’s allowance for receivables was $21.200 KAPLAN PUBLISHING .000 of this amount and adjust the allowance for receivables to $30.500 Net balance $361.PAPER F3 (INT) : FINANCIAL ACCOUNTING At 31 May 20X6.
The car was traded in for a replacement vehicle on 1 August 20X4 for an agreed figure of $5.400 Loss $200 Profit $200 (2 marks) KAPLAN PUBLISHING 17 . What was the profit or loss on disposal? A B C D $360 loss $150 loss $104 loss $200 profit (2 marks) Bernard purchased some plant and equipment on 1 July 20X3 for $40.000. The accounting policy is to charge a full year’s depreciation in the year of purchase and no depreciation in the year of sale. assuming no residual value.200 during the last accounting year.000. Bernard's policy is to charge depreciation on the straight line basis. with a proportionate charge in the period of acquisition. with an expected residual value of $500. What should be the depreciation charge for the plant in Bernard's accounting period of twelve months to 30 September 20X3? A B C D $720 $600 $900 $675 (2 marks) A car was purchased by Tyron for $12.000. What was the profit or loss on the disposal of the vehicle for the year ended 31 December 20X4? A B C D Loss $2. and had been depreciated on the reducing balance basis. It had been purchased exactly three years earlier for $5.LECTURER RESOURCE PACK – QUESTIONS Chapter 8 Non-current assets A non-current asset was disposed of for $2. The scrap value of the plant in ten years' time was estimated to be $4.200 Loss $1.000 on 1 April 20X1 and has been depreciated at 20% each year straight line.000. at 20% per annum.
720 $10. What is the depreciation charge for the year ended 30 September 20X2? A B C D $74.040 $72.200 __________ The company’s policy is to charge depreciation at 20% per year on the straight line basis. After adjusting for the above errors. Depreciation on an item of plant bought on 1/1/20X5 for $6.200 __________ 399.000 has not been recorded in the register but correctly dealt with in the general ledger. what is the unexplained difference between the balances shown in the asset register and general ledger? A B C D $11.000. His general ledger shows a non-current asset balance of $203.200 __________ Balance b/f 1 December: Cash – addition 399.320 (2 marks) 18 KAPLAN PUBLISHING .PAPER F3 (INT) : FINANCIAL ACCOUNTING Fern’s plant and machinery ledger account for the year ended 30 September 20X2 was as follows: Plant and machinery – cost $ 381.640 $76.000 Balance c/f __________ $ 36.800 at 31 December 20X5.800 was credited to the repairs account in error. Tarbuck depreciates plant and machinery monthly at 10% straight line.000 363.200 1 June: Disposal account – cost of asset sold 18. the following errors are identified: A machine purchased on 1 May 20X5 at a cost of $12. After investigation.520 $11.840 (2 marks) Which one of the following should NOT be accounted for as capital expenditure? A B C D Labour costs of employees engaged in the construction of a new non-current asset The costs of testing a new fishing boat for seaworthiness The cost of replacing carpets throughout the head office Stamp duty paid on the acquisition of a new factory (1 mark) Tarbuck’s asset register has a balance of $179. with proportionate depreciation in years of purchase and sale.200 $11.440 $84.
The van had been purchased on 1 December 20X4 for $30.350.305 $10. the valuation must be reviewed each year If a company adopts a revaluation policy. this must be applied to all non-current assets (1 mark) 19 KAPLAN PUBLISHING . A B C D $10.500 10.200 $350.000 $12. What is the depreciation charge in respect of the asset for the year ended 31 December 20X6? James charges depreciation on a pro rata basis.650 (2 marks) Which of the following statements is correct? A B C D A surplus on revaluation should always be credited to the revaluation reserve The revaluation reserve is calculated by comparing the revalued amount with the book value of an asset at the revaluation date Where assets are revalued.700 $426.650 $8. What was the part exchange allowance given to Vernon? A B C D $27.650 $15.000 $370.000 16. making a loss on disposal of the old van of $2. Vernon traded in an old delivery van for a newer model.000 and was depreciated at 40% reducing balance.547 (2 marks) On 30 November 20X6.000 and commenced depreciating it at 20% straight line.450 $3.000 (2 marks) $ 340. James reviewed his depreciation methods and it was decided that the reducing balance method at a rate of 25% would give a fairer presentation of the machine’s use.700 20. The following costs were incurred: Purchase price Sales tax Delivery to factory Factory modifications required to install machine Extended 5 year warranty What amount should be capitalised in the financial statements of Diggers? A B C D $366. On 1 January 20X6.000 59.LECTURER RESOURCE PACK – QUESTIONS On 8 April 20X6.000 James acquired a machine on 30 June 20X3 for $100.500 $12. Diggers bought a machine for use in the production of farm equipment.
PAPER F3 (INT) : FINANCIAL ACCOUNTING Chapter 9 From trial balance to financial statements The following year end adjustments are required in Harvey’s accounts: • • • • Write off of an irrecoverable debt of $2.500.800. Creation of an allowance for receivables of $12. What are total assets and current assets after the adjustments? Total assets A B C D $365.800.030.120 $373.650 and current assets of $266. Charging depreciation of $34.170 $240.120 Current assets $274.150 $327. Harvey’s draft accounts show total assets of $399.800. Before making these adjustments.770 (2 marks) Which of the following statements is NOT true? A B C D A trial balance will identify all errors made in the preparation of the accounts A trial balance is a first step to preparing the financial statements A trial balance is extracted from the general ledger before year end adjustments are made A suspense account arises where the trial balance does not balance (1 mark) 20 KAPLAN PUBLISHING .270 $274.520 $373. Recording closing inventory of $22.770 $229.
600 Receivables 23.900 Discounts received 10.200 Discounts allowed 2. What amount has Lawrence withdrawn from the business? A B C D $55.000 Drawings ? Lawrence is unsure of the exact amount that he withdrew from the business.070 $15.030 $3.400 Inventory 20.600 Non-current assets – depreciation 35.600 Bank overdraft 14.800 Carriage in 10.270 (2 marks) Which of the following items appear on the same side of the trial balance? A B C D Returns inwards and rental income Drawings and deferred income Opening inventory and returns outwards Carriage out and accrued income (2 marks) KAPLAN PUBLISHING 21 .980 Returns out 8.600 Capital 56.400 Expenses 95. although he is sure that no errors have been made in his general ledger.000 Purchases 177.LECTURER RESOURCE PACK – QUESTIONS The following balances have been extracted from the accounts of Lawrence: $ Sales 340.430 Non-current assets – cost 120.220 Payables 18.870 $33.
800 Sales returns 4.115 (2 marks) 22 KAPLAN PUBLISHING .115 $315 $1.PAPER F3 (INT) : FINANCIAL ACCOUNTING Chapter 10 Books of prime entry and control accounts The following receivables ledger control account has been prepared by a trainee accountant: $ $ 1 Jan Balance b/f 284.115 Debit 315 1.920 Balance c/f 303.180 484.590 __________ __________ __________ __________ 484.790 Discounts allowed 3.180 What should the closing balance on the account be when the errors in it are corrected? A B C D $290.115 $1.660 Contras 800 Irrecoverable debts written off 1.680 31 Dec Cash received from 31 Dec Credit sales 189.800 Credit A B C D PLCA PLCA Sales tax Purchases Purchases Sales tax $2.830 $284.115 $1.120 credit customers 179.800 $2.430 (2 marks) What is the correct entry in the accounts arising from the following page from a purchase day book? Gross $ 940 705 470 Sales tax $ 140 105 70 ________ ________ Ives Shelton Allister ________ ________ ________ ________ Net $ 800 600 400 2.800 $315 Sales tax Purchases Purchases Sales tax PLCA PLCA $315 $1.430 $282.800 $2.150 $286.800 $315 $2.
The discounts column in the cash payments book for the month of October totals $2.00 $5.80 $32. or as notification of payment’. A B C D Statement Debit note Remittance advice Receipt (1 mark) Freddie maintains separate cash receipts and cash payments books.LECTURER RESOURCE PACK – QUESTIONS Which of the following result in a debit entry to the pavables ledger control account? 1 2 3 4 A B C D Interest charged on late payment Discounts received Purchase returns Contra with receivables All of them 1 and 2 2 and 4 2.80 cash Expense vouchers totalling $32.60 (1 mark) What is the imprest amount? KAPLAN PUBLISHING 23 .450. How should Freddie record this? A B C D Dr Discounts allowed Dr Pavables ledger control account Dr Discounts received Cr Receivables ledger control account Cr Discounts received Cr Payables ledger control account (1 mark) Dr Receivables ledger control account Cr Discounts allowed Marco’s petty cash tin on 18 August contains the following: • • A B C D $37. 3 and 4 (2 marks) What item of business documentation does the following best describe? ‘A document sent to the supplier with.20 $37.20 $70.
What cheque was drawn for petty cash during the period? A B C D $19. The following details are relevant: Float Voucher #1 – travel expenses Voucher #2 – tea and coffee for staff kitchen Voucher #3 – cheque cashed for employee $10 was also received from an employee for postage.500 Elias operates an imprest system for petty cash.677 29.980 348.953 $59.30 $64.60 6.200 33.30 $54.347 (2 marks) $ 32.750 276.400 17.70 45.147 $24.30 (2 marks) $ 200 12.347 $91.30 $9.PAPER F3 (INT) : FINANCIAL ACCOUNTING Which of the following is NOT true A B C D The total of the discounts column in the cash receipts book is posted to the discounts received account The total from the purchase day book is posted to the payables control account in the general ledger The total of the sales tax column in the sales returns day book is debited to the sales tax account Each invoice in the sales day book is posted to the individual accounts in the receivables ledger (1 mark) You are provided with the following amounts for purchases and payables: Payables at 1 April 20X6 Payables at 31 March 20X7 Credit purchases during year Cash paid to suppliers Contra with receivables ledger control account Discounts received What was the value of purchase returns? A B C D $18.00 24 KAPLAN PUBLISHING .
LECTURER RESOURCE PACK – QUESTIONS Chapter 11 Control account reconciliations Sonny is a supplier to Amie’s jewellery business. How should this be corrected? A B C D Credit the receivables ledger control account with $25 and increase the ledger total by $25 Debit the receivables ledger control account with $25 and increase the sales ledger total by $25 Credit the receivables ledger control account with $25 and decrease the ledger total by $25 Debit the sales ledger account with $25 and decrease the ledger total by $25 (1 mark) In reconciling the payables ledger control account to the payables ledger. Sonny’s account in Amie’s records showed a balance of $7. On the same date. A credit note for $15 received from a supplier had been credited to the supplier’s account in the payables ledger.500.300. the following errors were identified: 1 2 The purchase day book had been overcast by $30. One of errors discovered was that an invoice of $25 issued to Shwartz was not recorded in the sales day book. Which of the following could account for the difference in full? A B C D The debit side of Sonny’s account in Amie’s ledger has been undercast by $200 An invoice for $100 from Sonny has been treated as a credit note by Amie Sonny has issued a credit note to Amie for $200 but Amie has not yet received it The credit side of Sonny’s account in Amie’s ledger has been overcast by $200 (2 marks) The balance on Anne’s receivables ledger control account does not agree with the total of the individual accounts in the sales ledger. At 31 August Sonny sent a statement to Amie showing a balance due of $7. Credit control account with $30 and decrease the total ledger balances by $45 Credit control account with $15 and decrease the total ledger balances by $15 Debit control account with $45 and decrease the total ledger balances by $60 Debit control account with $30 and decrease the total ledger balances by $30 (2 marks) How should these errors be corrected? A B C D KAPLAN PUBLISHING 25 .
Cash refunds to customers. Barolo. 4 and 7 3.180 has not been allowed for by Barolo.840 $840 $1. $11. Goods returned by Amadeus $380 have not been recorded by Barolo.600 The sales day book being overcast by $5. Irrecoverable debts written off. Credit notes for goods returned by customers. 2. Investigation reveals the following: 1 2 3 A B C D Cash paid to Barolo $5. The difference may be explained by: A B C D The cash receipts book being undercast by $5.PAPER F3 (INT) : FINANCIAL ACCOUNTING A receivables ledger control account shows a balance of $345.080 (2 marks) What is the discrepancy between Amadeus’ and Barolo’s records after allowing for these items? Which of the following items could appear on the credit side of a receivables ledger control account? 1 2 3 4 5 6 7 A B C D Cash received from customers. Amadeus’ payables ledger account for Barolo shows a balance due to Barolo of $3.800 issued to a customer being debited to her account in the sales ledger A discount allowed of $2. Amadeus has not recorded a credit note for $120 issued by Barolo.760. 5 and 6 5 and 7 (2 marks) 26 KAPLAN PUBLISHING . 4. 2. 1. Sales. 4 and 6 1.800 being recorded as a credit in the customer’s account (2 marks) Amadeus received a statement of account from a supplier.200. showing a balance to be paid of $9.600 A credit note for $2. Increase in allowance for receivables.600 (Dr). Discounts allowed.440 $1. The total of the accounts in the sales ledger is $351.240.
988 What difference still requires explanation after adjusting for the above? Ines has accidentally recorded a supplier invoice for $450 as $45 in the purchase day adjustment is required to amend this? Payables ledger control account A B C D Dr $405 Cr $405 Cr $405 Dr $405 Purchase ledger total Increase by $405 Increase by $405 No adjustment No adjustment book. The balances on each are as follows: Control account List of balances She finds the following: 1 2 3 A B C D A cash payment listed correctly in the cash book at $279 has been transferred to the payables ledger as $297.811 $1. Arkwright’s account showing a balance of $2.890 has been omitted from the list of balances. What (2 marks) Which of the following will explain the balance on the receivables ledger control account being lower than the total of the list of sales ledger balances? A B C D The sales day book was overcast The discounts column in the cash receipts book was overcast An invoice was not listed in the sales day book The debit side of the control account was overcast (1 mark) KAPLAN PUBLISHING 27 .975 (2 marks) $32.LECTURER RESOURCE PACK – QUESTIONS Kenzie is reconciling her payables ledger control account to the list of individual balances in the purchase ledger. The credit side of the control account has been overcast by $100.011 $1.775 $2.771 $27. $1.
800 167. 3 and 5 only (2 marks) The following bank reconciliation statement has been prepared for Omega by a junior clerk: Overdraft per bank statement Add: Deposits not credited Less: Outstanding cheques Overdraft per cash book $ 68.500 __________ __________ Which of the following should be the correct balance per the cash book? A B C D $167. 4 and 6 only 1.500 overdrawn as stated $31. Standing order payment entered in the bank statement. 2.900 overdrawn (2 marks) Which of the following can be described as an unrecorded difference? A B C D An error made by the bank An uncleared lodgement A cheque issued to a supplier but not yet paid in to their bank A cheque issued by a customer which has been marked ‘return to drawer’ (1 mark) 28 KAPLAN PUBLISHING .300 41.200 __________ 209. 2. Deposits credited after the date of the bank statement. which of the following items could require a subsequent entry in the cash book? 1 2 3 4 5 6 A B C D Cheques presented after the date of the bank statement. 5 and 6 only 2.300 overdrawn $31. A cheque from a customer which was dishonoured.300 cash at bank $114. 3. An error by the bank. Bank charges.PAPER F3 (INT) : FINANCIAL ACCOUNTING Chapter 12 Bank reconciliations In reconciling a business' cash book with the bank statement. 4 and 6 only 1.100 141.
Bank charges for November amounted to $30. Aarti received a cheque for $78 from a customer on 31 July and paid it into the bank immediately but it has not yet appeared on the bank statement.117 Dr $2. What entry should be made for this in the bank reconciliation process? A B C D Debit to cash book Credit to cash book Increase to balance per bank statement Decrease to balance per bank statement (1 mark) KAPLAN PUBLISHING 29 . Investigation reveals the following: 1 2 3 4 A B C D The bank has accidentally credited Samuel’s account with a cheque for $230 made payable to Sammel. $2.670 Cr. A cheque paid to a supplier for $1. the cash book shows a revised balance of $1. $1.330 $1. A cheque for $70 was entered as a payment in the cash book instead of a receipt.400 (2 marks) What was the balance on Samuel’s cash ledger account before any adjustments? Aarti is preparing her bank reconciliation at the end of July.661 Dr $1.117 Cr (2 marks) What balance was shown on Aarti’s bank statement at 31 July? Lily has received notification from the bank of a direct credit to her bank account. Having adjusted for all unrecorded differences.LECTURER RESOURCE PACK – QUESTIONS Samuel’s bank statement showed a balance on 30 November of $2.330 $1. Aarti has also identified that adjustment is required in the bank reconciliation for the following items: 1 2 3 A B C D The bank has accidentally charged Aarti an overdraft arrangement fee of $50 which relates to another customer. A cheque paid to a supplier for $900 remains unpresented.270 $3.000 has not yet appeared on the bank statement.661 Cr $1.889 Cr.
Which of the following will explain the difference in full? A B C D An unpresented cheque of $270.PAPER F3 (INT) : FINANCIAL ACCOUNTING Felix’s cash at bank account shows a balance on 31 December 20X8 of $15.233. A cheque received for $2.381 $12. an uncleared lodgement of $380 and the misposting of $75 bankings from the till to the wrong side of the ledger account Unpresented cheques of $270. Cheques received but not yet banked amounted to $487.868 $13.200 has been dishonoured by the bank. an uncleared lodgement of $340 and the misposting of $75 bankings from the till to the wrong side of the ledger account An uncleared lodgement of $380 and the misposting of $150 bankings from the till to the wrong side of the ledger account (2 marks) 30 KAPLAN PUBLISHING . Felix finds the following: 1 2 3 4 A monthly standing order for $250 has not been recorded in the accounts for the past two months. $12. Upon investigation.371 $12. His bank statement shows a balance of $60 Cr on the same date. The cashier has recorded the $76 replenishment of the imprest amount on the wrong side of the cash at bank account.381 (2 marks) What amount should Felix report for cash at bank in his statement of financial position? A B C D Ravinder’s bank ledger account shows a balance of $20 Cr. an uncleared lodgement of $340 and the misposting of $150 bankings from the till to the wrong side of the ledger account An unpresented cheque of $270.
One error relates to the mis-posting of an amount of $200.000 $4. What is his revised profit? A B C D $102. This was recorded on the wrong side of the discounts account.230 $103.LECTURER RESOURCE PACK – QUESTIONS Chapter 13 Correction of errors and suspense accounts A trial balance has been extracted and a suspense account opened.780. To correct the misposting of carriage in costs To correct an error in the recording of a cash receipt.200 $4.430 $106.430 (2 marks) The following are errors made by Luisa in the preparation of her year end accounts. Cr Discounts account $200 Dr Discounts account $400. Cr Suspense account $400 Dr Suspense account $400. What will be the correcting journal entry? A B C D Dr Discounts account $200. being discounts received from suppliers.000 To correct the undercasting of the purchase returns day book. Prior to recording these journals. Gordon’s profit was $102.200 $1. Which of them will not result in an entry to the suspense account? A B C D The payment of wages has been credited to the staff costs account The opening balance on the rent account was not brought down The balance on the receivables account has been incorrectly extracted for inclusion in the trial balance A cash sale has been recorded by debiting sales and crediting cash (1 mark) KAPLAN PUBLISHING 31 . Cr Suspense account $200 Dr Suspense account $200.130 $99. Cr Discounts account $400 (2 marks) Gordon has posted the following journals to his accounts at the year end: Dr Cr Dr Cr Dr Cr Payables ledger control account Purchase returns Carriage in Carriage out Cash Suspense $650 $650 $1.
278 $2.420 Which one of the following errors could fully account for the difference? A B C D The omission from the trial balance of the insurance account balance.602 Credit $808.182 The returns outwards total of $3. has recorded the purchase of stationery by debiting non-current assets and crediting cash. being $7.434 $2. $2.PAPER F3 (INT) : FINANCIAL ACCOUNTING Raj.900 and total credits of $141. A cash payment of $22 was debited to the cash account. An opening prepayment of $280 has been omitted from the insurance account. After adjusting for the following errors. the totals being: Debit $815.591 debited in error to the discount received account No entries made in the records for cash sales totalling $7.780. a doctor. what is the balance on the suspense account? 1 2 3 A B C D A discount allowed of $78 was debited to the discounts received account. What type of error is this? A B C D Error of original entry Error of commission Error of principle Extraction error (1 mark) A trial balance shows total debits of $143.356 (2 marks) Cassidy’s trial balance failed to agree.182 Dr Discount allowed $3.378 $2.591 was included in the trial balance as a debit balance (2 marks) 32 KAPLAN PUBLISHING .
What is the revised profit after correcting the errors? A B C D $98. Returns outwards of $3. Prior to correcting these errors.390 (2 marks) KAPLAN PUBLISHING 33 . Malbec’s accounts showed a draft profit of $102.190 $99.900.LECTURER RESOURCE PACK – QUESTIONS The following errors have been identified in the preparation of Simpson’s accounts: 1 2 A cash sale of $340 has been credited to the cash account.890 $103. A discount allowed of $1.780 has been correctly recorded in the receivables ledger control account but credited to the discounts received account. A receipt from a customer of $230 has been recorded in the accounts as $23 Dr A B C D Cash Cash Suspense Cash Suspense 887 887 680 207 680 Cr Suspense Receivables Sales Receivables Sales Receivables Cash Receivables 680 207 680 207 680 207 473 207 (2 marks) What journal will correct both errors? Upon review of his accounts.400 were debited to the receivables ledger control account.790 $96. Malbec finds the following errors: • • • A rent accrual of $450 was not brought forward at the start of the year.
1 and 2 2 and 3 2 and 4 3 and 4 (2 marks) Which two of the following possible errors could. The balance on the motor expenses account $27.640 $1. cause the trial balance to agree? 34 KAPLAN PUBLISHING .520 on the rent receivable account has been omitted from the trial balance.026.680 has been incorrectly listed in the trial balance as a credit.160 proceeds of sale of a motor vehicle has been posted to the debit of the motor vehicle asset account. when corrected. $6.160 for payment of rent has not been entered in the rent payable account. The balance of $21.PAPER F3 (INT) : FINANCIAL ACCOUNTING The trial balance totals of Gamma at 30 September 20X6 are: Debit Credit 1 2 3 4 A B C D $992.480 An item in the cash book $6.
Human error is not completely eliminated.LECTURER RESOURCE PACK – QUESTIONS Chapter 14 Applications of information technology Which of the following are disadvantages of computerised accounting systems? 1 2 3 4 A B C D Initial capital outlay is high. 2 and 4 1 and 4 1 and 3 All of them (2 marks) KAPLAN PUBLISHING 35 . Accounts staff are still required to perform reconciliations and certain types of analysis. Running costs are high.
500 137.600 542.600 B C D $506.360 $32.600 $64.200 $578.700 From the following information.800 30% Based on this information.200 27.200 989. which of the following is the amount of inventory destroyed? A business has compiled the following information for the year ended 31 October 20X2: Opening inventory Purchases Closing inventory The gross profit as a percentage of sales is always 40% Based on these figures.400 $523.500 $1.800 36 KAPLAN PUBLISHING .333.971 $19.300 13.381.000 422. calculate the value of purchases: Opening payables Cash paid to suppliers Discounts received Goods returned Closing payables A $302.587.640 $40. what is the sales revenue for the year? A B C D $1.440 (2 marks) $28.250 The sales revenue figure cannot be calculated from this information (2 marks) $ 386.500 $2.400 $49. The following information is available: 1 2 3 4 A B C D Inventory at 1 December 20X3 at cost Purchases for December 20X3 Sales for December 20X3 Standard gross profit percentage on sales revenue $45.200 (2 marks) $ 142.PAPER F3 (INT) : FINANCIAL ACCOUNTING Chapter 15 Incomplete records On 31 December 20X3 the inventory of V was completely destroyed by fire.
how much do Grubb and Grouse owe? Grubb A B C D $26. although two .640. Grubb owed $21. Other than Grubb and Grouse. and is trying to identify how much each customer owes him.000 $51.700 $19.700 Grouse $3. customers have confirmed balances totalling $69.500.200 $26.000.000 Max also remembers paying his income tax bill of $24.000 15.000 $58. Invoices made out to Grubb for the year total $136.500 and discounts given of $4. Most of the customers have confirmed their balance.040 can’t calculate from information available $9. A review of the cash receipts book shows amounts received from Grubb of $126. credit notes total $6. however been able to provide the following information: Capital at 1 June 20X5 Capital at 31 May 20X6 During the year ended 31 May 20X6: Cash withdrawn from the business Bingo winnings paid into business bank account Goods taken from the business by Max – cost – selling price What is Max’s profit for the year? A B C D $27. Assuming that the receivables ledger control account balance is correct.200 $19.000 from the business bank account.000 90. Westville has lost his sales ledger. Westville has identified that: • • • • • The total balance on the receivables ledger control account is $98.000 406.000 $34.000 (2 marks) $ 334.000 at the start of the year.540 can’t calculate from information available (2 marks) KAPLAN PUBLISHING 37 .400.000 22. He has.000 150.LECTURER RESOURCE PACK – QUESTIONS Max has kept no accounting records for the year ended 31 May 20X6.Grubb and Grouse are not sure off theirs.300.
380 $1.200 Sales of $48.000 and a gross profit of $9.400 $78.000 per week $85.400 $9.840 $7.670 1.200 Cost of sales of $24.300 $1.800 $88. He has established the following with respect to his ledger accounts: 1 January X5 31 December X5 $ $ 230 300 12. retaining a float of $300.900 $80.600 Sales of $32.670 $14. (2 marks) Kiera makes all of her sales for cash using a 25% gross margin.000 and a gross profit of $7.200 (2 marks) 38 KAPLAN PUBLISHING .000 and cost of sales of $19.PAPER F3 (INT) : FINANCIAL ACCOUNTING Farmer is unsure of how much cash he took out of the farm shop till for his own use during the year ended 31 December 20X5.000 per month Cash in till Cash at bank Sales (all for cash) Wages paid in cash Cheques paid to suppliers Discounts received Standing order for rent What were Farmer’s cash drawings during the period? A B C D $14.800 Which of the following represents a mark up of 40%? A B C D Sales of $18.100 $2.000 and a gross profit of $19.400 $4. She has provided the following information: Cash in till at start of the year Cash in till at end of year Cash banked Wages paid from till Money taken by Kiera Inventory at start of year Inventory at end of year What is Kiera’s purchases figure to the nearest $? A B C D $85.770 $11.010 The cash in till is banked weekly.430 $3.200 $8.200 (2 marks) $2.900 $5.100 $84.780 165.
000 Q $ 162.000 (1 mark) KAPLAN PUBLISHING 39 . after providing for salaries for Q and R as follows: Q $20.800 and total liabilities of $130. Their statement of financial position shows total assets of $340.212 $245.988 $95. What are the partners’ total profit shares for the year ended 30 June 20X2? P $ A B C D 256.000 166.000 156. The business has recently been valued at $245.000.000.000 66.000 R $ 62.000 248.000 168.000 264. accruing evenly over the year.000 64. Q 25% and R 25%.000 (2 marks) Which of the following is a debit entry to a partner’s current account? A B C D Interest on capital Share of profit Drawings Salary (1 mark) Tom and Jerry are partners in a design business.000 60.800 $114.000 264. What is the value of goodwill in the business? A B C D $34. and from that date the profit-sharing ratio became P 50%. sharing profits in the ratio 3:2 and compiling their accounts to 30 June each year.000 per year R $12.LECTURER RESOURCE PACK – QUESTIONS Chapter 16 Partnerships P and Q are in partnership.788.000 per year The partnership profit for the year ended 30 June 20X2 was $480. On 1 January 20X2 R joined the partnership.
accruing evenly over the year.000 Horace $ 104.000 for an irrecoverable debt relating to trading before 1 July 20X2 which it was agreed that Priya should bear entirely. How is the profit for the year to be divided between Priya and Soraya? P $000 A B C D 245 250 270 255 S $000 95 90 90 85 (2 marks) 40 KAPLAN PUBLISHING . On 1 January 20X4 they agreed to change the profit sharing ratio to 3:2:1 and to discontinue Horace’s salary.000.000 per year each for Horace and Ivor.667 89.333 Ivor $ 84. entered into partnership with Soraya on 1 July 20X2. The partnership profit for the year ended 30 June 20X4 was $380. sharing profits equally.000 profit be divided among the partners? Goran $ A B C D 192. accruing evenly over the year. sharing profits in the ratio 3:1:1. after having been a sole trader for some years. How should the $380.000 84. The business profit for the year ended 31 December 20X2 was $340.000. after charging salaries of $20.000 103.500 209.000 209. apart from a charge of $20.667 (2 marks) Priya.333 101. Horace and Ivor are in partnership.000 192. Ivor’s salary continued unchanged.PAPER F3 (INT) : FINANCIAL ACCOUNTING Goran.167 69.333 111.
000 Dr 9. The following information relates to the year ended 30 June 20X7: Pat $ 20. and Oliver withdrew $6. Ajay and Ted are in partnership running a tea shop in Greendale.100 $45. On 1 July.000 11.000 to the business. with an agreed interest rate of 6%.000 profit for the year ended 31 December 20X6 is appropriated to Oliver? A B C D $44. Both partners had a balance of $50.900 (2 marks) KAPLAN PUBLISHING 41 . Oliver loaned $50.000 from the business.000 on their capital account throughout the period.200 Capital account b/f Current account b/f Drawings The partnership agreement states that • • • Pat and Ajay receive an annual salary of $6.767 $3. How much of the $102. On 1 January 20X6.989 $25.700 Ajay $ 30. What is the credit balance on Pat’s current account at 30 June 20X7.600? A B C D $23.600 Cr 15.000 18.000 12.000 Interest on capital to be awarded at 3% pa Interest on drawings to be charged at 5% pa Residual profits to be shared equally.500 Cr 12. if profits for the year amount to $95.050 $44.000 Ted $ 50.767 $5.767 (2 marks) Oliver and Isabel are in partnership. The terms of their partnership agreement are as follows: • • • • Isabel to receive an annual salary of $12.000 Interest on capital is provided at 5% Residual profits are shared in the ratio 2:3:4.LECTURER RESOURCE PACK – QUESTIONS Pat.000. Isabel withdrew $10.950 $45.
667 $10. Johnnie would like to spend less time working in order to pursue his painting hobby and to reflect his lesser involvement. Sorrel.PAPER F3 (INT) : FINANCIAL ACCOUNTING Johnnie.000 credit $18. The value of the goodwill is $144. sharing profits in the ratio 4:1:3. the profit sharing ratio is to be changed to 2:1:3.000 for a sixth of the business. What is the net impact of the transaction on Jerome’s capital balance as a result of the transaction if no goodwill account is maintained? A B C D $18.000. to their business.000 $60.000.000 debit $54. What is the value of the goodwill in the business? A B C D $nil $1.000 debit (2 marks) Spencer and Sanjit have decided to admit a new partner.000 credit $54.000 (2 marks) 42 KAPLAN PUBLISHING . The net assets of the business at the admission date are $300. Sorrell has agreed to pay $60. Jacinta and Jerome have been in partnership for several years.
000 $60. in full.000 $140.000 shares of 50c each Share premium account 250.000 In the year ended 30 June 20X3 the company made a rights issue of 1 share for every 2 held at $1. would be: A Dr share capital account Cr share premium Cr bank account B Dr bank account Cr share capital account Cr share premium C Dr share capital account Dr share premium Cr bank account D Dr bank account Dr share premium Cr share capital account $200. and paid for by cheque.000 (2 marks) KAPLAN PUBLISHING 43 .000 450.000 $60. What was the company’s capital structure at 30 June 20X3? Ordinary share capital $ A B C D 425.500 (2 marks) The correct ledger entries needed to record the issue of 200.000 450.000 $200. using the share premium account for the purpose.000 $260.000 $260.000 Share premium $ 237.500 337.25 per share and this was taken up in full.500 362.000 $200.000 425.500 262.LECTURER RESOURCE PACK – QUESTIONS Chapter 17 Company accounts At 30 June 20X2 a company’s capital structure was as follows: $ Ordinary share capital 500.000 $200.000 $60.000 $60. Later in the year the company made a bonus issue of 1 share for every 5 held.000 $260.000 150.000 $1 shares at a premium of 30c.
3 and 4 only All four items (2 marks) The following is an extract from the ledger accounts of Forklift.000 Income tax payable $ 29. What amounts should be disclosed in the 20X7 financial statements in respect of tax? Income statement tax charge $ 29. the company has paid the preference dividend for the year and an interim dividend of 2c per share on the ordinary shares. at the 31 May 20X7 year end: Income tax $ $ 1 March 20X7 Cash 25. A final ordinary dividend of 3c per share is proposed.000.000 (2 marks) Which of the following items must be disclosed in a company’s published financial statements (including notes) if material according to IAS 1 Presentation of financial statements? 1 2 3 4 A B C D Finance costs. 1 and 3 only 1. What is the total amount of dividends relating to the year ended 31 October 20X6? A B C D $240. a limited liability company is as follows: Ordinary 10c shares 8% 50c preference shares $ 1.000 31.000 In the year ended 31 October 20X6. Depreciation expense. a company.000 29.000 $90. 2 and 4 only 2.000 31.000 $540.PAPER F3 (INT) : FINANCIAL ACCOUNTING The issued share capital of Amadeus. Movements on share capital.000 31.000 $60.000 500.000.600 The estimated tax payable for the year ended 31 May 20X7 is $31.000 (2 marks) A B C D 44 KAPLAN PUBLISHING .600 31 May 20X6 Income statement 27.000 31. Staff costs.000 29.
SGL made a profit on disposal of shares in another company. they may be offset. An ordinary dividend of 2c per share was proposed. preference shares are always redeemable Ordinary shareholders receive a dividend at the directors’ discretion. 1 and 3 1. redeemable preference shares are presented as a liability Ordinary shares carry voting rights.000 were issued. preference shareholders receive a fixed dividend An ordinary dividend is paid in priority to a preference dividend. Loan notes of $200.LECTURER RESOURCE PACK – QUESTIONS Which of the following statements are true with regard to IAS 1: 1 2 A B C D Current assets are those assets that will be settled within 24 months of the reporting date. 4 and 5 (2 marks) Which of these should be disclosed in the statement of changes in equity? Which of the following is correct? A B C D Ordinary shares do not carry voting rights. The final preference dividend was accrued. preference shares may be cumulative or non-cumulative (2 marks) KAPLAN PUBLISHING 45 . Both of them Neither of them 1 only 2 only (2 marks) The following items relate to SGL’ Ltd year ended 31 December 20X6: 1 2 3 4 5 A B C D A property was revalued to its current market value. If an item of income and an item of expense relate to the same item. 3 and 5 1 only 3. 2.
The tax payable account shows a debit balance of $2. An interim dividend totalling $20.200 $452.500 was declared on 12 December 20X5 and paid on 3 January 20X6 What is the balance on Sydney’s retained earnings account at 31 October 20X6? A B C D $453.000 Share capital account $37.500 Share capital account $25.000 Share capital account $25.700.500.800 $457. The cash received was correctly recorded.450.000 (2 marks) 46 KAPLAN PUBLISHING . makes a profit before tax in the year ended 31 October 20X6 of $214. 20X5’s final dividend of $14. A final dividend for 20X6 of $15.000 ordinary shares of 25c each at a premium of 50c per share.000 $37. Which of the following journal entries is needed to correct this error? Dr A B C D Share premium $25. but the full amount was credited to the ordinary share capital account. The following information is also relevant: The estimated tax charge for the year is $35.450. a company.000 Cr Share capital account Share premium Share premium Cash $25.000 has been paid. At the start of the year its retained earnings were $311.500 $25.PAPER F3 (INT) : FINANCIAL ACCOUNTING Sydney.000 $25.000 has been proposed.300 $458.700 (2 marks) A company issued 50.
other than capital expenditure on research facilities. it is necessary to consider whether there will be adequate finance available to complete the project. (1 mark) On what basis may a company change its accounting policies? A B C D Only if required by an accounting standard Only if required by an accounting standard or to achieve greater relevance and reliability. In deciding whether development expenditure qualifies to be recognised as an asset. Dividends should be recognised when the right to receive payment is established. Only if required by an accounting standard or local legislation. Development expenditure recognised as an asset should be amortised over a period not exceeding five years. Only if required by an accounting standard or on application to the IASB.LECTURER RESOURCE PACK – QUESTIONS Chapter 18 Accounting standards Which of the following statements about research and development expenditure are correct? 1 2 3 A B C D Research expenditure. 2 and 3 1 and 2 only 1 and 3 only 2 and 3 only (2 marks) Which of the following is NOT true in terms of recognising revenue? A B C D Interest should be recognised on a time proportion basis. 1. Revenue from services should be recognised according to the stage of completion of the service. should be recognised as an expense as incurred. Royalties should be recognised when received. (1 mark) KAPLAN PUBLISHING 47 .
PAPER F3 (INT) : FINANCIAL ACCOUNTING At 31 August 20X7. Allidale’s legal team has suggested that there is a 55% chance that the client will win the case and Allidale will have to pay damages. Allidale are suing a supplier. 1 2 3 If all conditions specified in IAS 38 are met. Announcing a plan to discontinue an operation is a non-adjusting event. Equity dividends proposed before the year end but not declared until the post reporting period should be treated as a liability in the year end accounts. the financial statements should be prepared on a break up basis. 1 A B C D Disclose a contingent liability Recognise a provision Disclose a contingent liability Recognise a provision 2 Recognise an asset Recognise an asset Disclose a contingent asset Disclose a contingent asset (2 marks) 2 How should these issues be accounted for? Which of the following statements are correct? 1 2 3 4 A B C D IAS 10 requires all non-adjusting events to be disclosed by note. Where a non-adjusting event impacts going concern. 1 and 4 2 and 4 1 and 3 2 and 3 (2 marks) IAS 38 Intangible assets governs the accounting treatment of expenditure on research and development. development expenditure may be capitalised if the directors decide to do so. Capitalised development costs are shown in the statement of financial position under the heading of non-current assets Amortisation of capitalised development expenditure will appear as an item in a company’s statement of changes in equity. The legal team has advised that in this case the action is virtually certain to succeed. As a result of another incident. The following statements about the provisions of IAS 38 may or may not be correct. Allidale had the following issues: 1 A client has commenced legal action against the company as a result of faulty goods. All of them 1 and 2 2 only 2 and 3 (2 marks) Which of these statements are correct? A B C D 48 KAPLAN PUBLISHING .
A digger owned by Redbrick is sold on 16 December for significantly less than its carrying value.000 to $17. Legal advisers have confirmed that there is a 51% chance that Oxenhope will have to pay damages of $20. $14. In the intervening period.400 decrease to profit $5.600 decrease to profit $25.LECTURER RESOURCE PACK – QUESTIONS Redbrick is a company specialising in the construction of office blocks. The case is settled on 31 January 20X6.400 decrease to profit (2 marks) What impact will these events have on Oxenhope’s profit for the year? A B C D KAPLAN PUBLISHING 49 . Adjusting A B C D 1 and 2 – 1 2 Non-adjusting – 1 and 2 2 1 (2 marks) Are these adjusting or non-adjusting events? The following issues relate to Oxenhope at the year end: 1 2 The provision for warranties is to be decreased from $23.600 as the result of a drop in sales. the following occur: 1 2 Redbrick is sued by an employee who was injured on site as the result of an accident on 5 December 20X5. A claim has been made against the company for injuries suffered by a customer as the result of faulty goods.400 increase to profit $5. The accounts for the year ended 30 November 20X5 are to be approved on 26 February 20X6.000.
800 $52.PAPER F3 (INT) : FINANCIAL ACCOUNTING Chapter 19 Statement of cash flows Bagz.000 Interest paid 12.com is preparing its statement of cash flowfor the year ended 30 June 20X7.000.000 outflow $160.000 $104.000 outflow $150.000 $39.000 How much cash has been generated from operations? A B C D $86.400. Non-current asset purchases during the year amounted to $17.000 Increase in cash and cash equivalents 24.500 and trade payables increased by $900.800 (2 marks) The following amounts have been calculated for inclusion in the statement of cash flowof House: $ Net cash inflow from financing activities 145.000 inflow $160. During the year.800 $50.700. receivables decreased by $600.000 $116.300 and there was a loss on disposal of non-current assets of $3.800 $46.000 outflow (2 marks) The profits of Grove Trading were $63. What was the increase in cash balances during the year? A B C D $40. inventories increased by $2. The following is reported in the statement of financial position: 20X7 20X6 $000 $000 8% Loan notes 270 430 Share capital 130 120 Share premium 430 440 What is the net cash flow from financing activities? A B C D $140. This was after charging depreciation of $2.000 (2 marks) 50 KAPLAN PUBLISHING .000 Net cash outflow from investing activities 160.000 Income taxes paid 65.
LECTURER RESOURCE PACK – QUESTIONS Which of the following about statement of cash flows are true? 1 2 3 4 A B C D Statement of cash flows provide a good indication of the liquidity of a business.338 $413.700 12. Cash equivalents are all investments which are readily convertible to known amounts of cash.700 20X6 $ 212.340 25.500 12.600 399.400 14. All of them 1 only 1 and 2 2 and 4 (2 marks) The following are extracts from the financial statements of Park: 20X7 $ 234. What amount of cash has been generated from operations? A B C D $412. The concept of accruals underpins the preparation of the statement of cash flow.938 $387.000.462 $385. although a new machine was purchased mid-year at a cost of $35.668 23.210 Non-current assets Receivables Inventories Payables Operating profit There were no disposals of non-current assets during the year.062 (2 marks) KAPLAN PUBLISHING 51 .120 13. A surplus on revaluation is disclosed within the investing activities section of the statement of cash flow.
000 240.000 130.000 98.000 100. a company: B/f $ 569.760 How much cash has been invested in non-current assets during the year? (2 marks) Greengrass inc. How is this transaction treated in Greengrass’ statement of cash flow? Proceeds of sale A B C D Cash inflow from investing activities Cash inflow from investing activities Cash inflow from operating activities Cash inflow from operating activities Profit on disposal Added to profit in the calculation of cash from operating activities Deducted from profit in the calculation of cash from operating activities Added to profit in the calculation of cash from operating activities Deducted from profit in the calculation of cash from operating activities (2 marks) In the course of preparing a company’s statement of cash flow.000 addition to operating profit $990.000 addition to operating profit $890.760 $161.000 52 KAPLAN PUBLISHING .000 40.000 80.000 186. Depreciation charges Profit on sale of non-current assets Increase in inventories Decrease in receivables Increase in payables What will the net effect of these items be in the statement of cash flow? A B C D $890. the following figures are to be included in the calculation of net cash from operating activities.760 50.070.000 – C/f $ 578.000 Carrying value Revaluation reserve Disposals at cost Accumulated depreciation on disposals Depreciation charge for the year A B C D $249.000 addition to operating profit (2 marks) $ 980. sold a non-current asset at a profit during the year ended 31 May 20X7.000 subtraction from operating profit $1.760 $111.PAPER F3 (INT) : FINANCIAL ACCOUNTING The following information is available about the non-current assets of River.760 $199.
LECTURER RESOURCE PACK – QUESTIONS Chapter 20 The regulatory and conceptual framework Which of the following explanations of prudence most closely follows that in IASB’s Framework for the Preparation and Presentation of Financial Statements? A B C D The application of a degree of caution in exercising judgement under conditions of uncertainty Revenue and profits are not recognised until realised. A B C D Both of them Neither of them 1 only 2 only (2 marks) KAPLAN PUBLISHING 53 . and provision is made for all known liabilities All legislation and accounting standards have been complied with Understatement of assets or gains and overstatement of liabilities or losses (1 mark) The accounting basis or convention which. in times of rising prices. tends to understate asset values and overstate profits. is the: A B C D going concern basis prudence convention realisation convention historical cost convention (1 mark) Which of the following bodies deals with any uncertainty as to how IFRS’s should be applied? A B C D IASCF SAC IFRIC IASB (1 mark) Which of the following statements are true? The legal form of transactions must always be reflected in accounting treatment. Information is reliable if it has the ability to influence decisions.
What are the missing words? 1 A B C D Going concern Going concern Historical cost concept Historical cost concept 2 Understandability Materiality Understandability Materiality (2 marks) Development costs are only capitalised when certain criteria are met. It helps accountants to decide on accounting treatment of an item where no relevant standard exists. It defines the qualitative characteristics of financial statements. It provides the underlying concepts which should be reflected in all accounting standards. This is an example of: A B C D Understandability Comparability Reliabilty Relevance (1 mark) 54 KAPLAN PUBLISHING . 3 and 4 2 and 4 1 and 3 (2 marks) ______1________ requires that assets and liabilities are valued on the assumption that a business will continue in operation for the foreseeable future.PAPER F3 (INT) : FINANCIAL ACCOUNTING An asset is a resource ____1____ by an enterprise as a result of ______2_____ and from which future _____3_____ are expected to flow to the enterprise. ______2________ is a threshold quality that is demanded of all information given in the financial statements. All 4 2. What are the missing words or phrases? 1 A B C D Controlled Owned Controlled Owned 2 A transaction A transaction Past events Past events 3 Revenues Economic benefits Economic benefits Revenues (2 marks) Which of the following statements about the Framework are true? 1 2 3 4 A B C D The Framework is not an accounting standard.
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