FA - Final Mock-Exam

31.01.
2022 09:10 FA - Final Mock Exam
FA - Final Mock Exam

Chapter 1-26
This paper is divided into two sections:
Section A – ALL 35 questions are compulsory and MUST be attempted

Section B – BOTH questions are compulsory and MUST be attempted
Time allowed 2 hours
* Required
1. Email *
2. Name and surname *
3. Group name *
Section A
https://docs.google.com/forms/d/19GKfuYpty_HvrF6vopdh4daq5nUYK65KE_iQEq7buHM/edit 1/20
31.01.2022 09:10 FA - Final Mock Exam
4. 1. Which of the following are differences between sole traders and limited 2 points
liability companies
Mark only one oval.
2 and 3 only
1 and 3 only
1 and 2 only
1, 2, and 3
5. 2. The purpose of a statement of financial position is to show 2 points
Mark only one oval.
The assets of the business and the claims against those assets
A clear and definite estimate of what a business is really worth
The amount the business could be sold for in liquidation
The amount the business could be sold for as a going concern
6. 3. The separate entity concept requires that a business is treated as being 2 points
separate from its owners
Mark only one oval.
True
False
7. 4. A company receives rent from a large number of properties. The total 2 points
received in the year ended 30 April 2008 was $1,154,880. The following were
the amounts of rent in advance and in arrears at 30 April 2007 and 2008:
Mark only one oval.
$1,106,160
$1,203,600
$1,142,160
$1,167,600
8. 5. Vine sublets part of its office accommodation. The rent is received 2 points
quarterly in advance on 1 January, 1 April, 1 July, and 1 October each year.

The annual rent was $24,000, but was increased to $30,000 from 1 July
2005. What amounts for rent should appear in the company’s financial
statements for the year ended 31January 2006?
Mark only one oval.
Income $27.000; Advance $2.500
Income $27.500; Advance $5.000
Income $27.000; Accrued Income $2.500
Income $27.500; Accrued Income $5.000
9. 6. On 1 May 2010, Jonas paid a rent bill of $1,800 for the period to 30 April 2 points
2011. What is the expense in the Statement of profit or loss for the year
ended 30 November 2010?
10. 7. At 31 October 2013 a business had machines with a cost of $120,000 2 points
and with accumulated depreciation of $25,000. On 1 January 2014 they
sold a machine for $10,000. This machine had originally cost $30,000 on
1 April 2012. The business had a depreciation policy of charging straight-
line depreciation at the rate of 20% per annum, on a monthly basis. What
is the depreciation expense for the year ended 31 October 2014?
11. 8. What is the purpose of charging depreciation in accounts? 2 points
Mark only one oval.
To ensure that funds are available for the eventual replacement of the asset
To reduce the cost of the asset in the Statement of financial position to its
estimated market value
To replace the cost of the asset with its estimated replacement value
To allocate the cost less residual value of a non-current asset over the accounting
periods expected to benefit from its use
12. 9. A non-current asset was purchased at the beginning of year 1 for 2 points
$2,400 and depreciated by 20% per annum using the reducing balance
method. At the beginning of year 4 it was sold for $1,200 (Choose the
correct answers)
Mark only one oval.
Loss on disposal $28.80
Profit on disposal $28.80
Loss on disposal $240
Profit on disposl $240
13. 10. According to IAS2 Inventories, which of the following costs should be 2 points
included in valuing the inventories of a manufacturing company?
Check all that apply.
General administrative overheads

Carriage inwards
Depreciation of factory machines
Carriage outwards
14. 11. A business received a delivery of goods on 29 June 2013, which was 2 points
included in inventory at 30 June 2013. The invoice for the goods was
recorded in July 2013. What effect will this have had on the business?
Mark only one oval.
Inventory at 30 June will be understated
Inventory at 30 June 2013 will be overstated
Profit for the year ended 30 June 2013 will be overstated
Profit for the year ended 30 June 2014 will be overstated
15. 12. Apple has her own business selling dolls to stores. At 30 June 2013 she 2 points
has a balance on her trade receivables of 60,900. A balance of $2,000
due from X Co is considered irrecoverable and is to be written off. Y Co
was in financial difficulty and Apple wishes to provide an allowance for
60% of their balance of $1,600. She has also decided to make a general
allowance for receivables of 10% of her remaining trade receivables.
What is the allowance for receivables in her Statement of financial
position at 30 June 2013?
16. 13. At 30 June 2005, a company’s allowance for receivables was $39,000. 2 points
At 30 June 2006, trade receivables totaled $517,000 and it was decided

to write of debts totaling $37,000 as irrecoverable. It was also decided to
adjust the allowance for receivables to 5% of the remaining trade
receivables. What expense should appear in the Statement of profit or
loss for the year ended 30 June 2006?
17. 14. At 1 July 2010, a company’s receivables amount $838,000. It was 2 points
decided to write off $72,000 of these debts as irrecoverable and to
adjust the allowance for receivables to $60,000. What are the final
amounts for inclusion in the company’s statement of financial position at
30 June 2011?
Mark only one oval.
$706,000
$730,000
$658,000
$778,000
18. 15. Which of the following statements are correct? 2 points
A company must disclose its significant accounting policies by way of a note to its
financial statements
A company’s statement of changes in equity must include the proceeds of any share
issue during the period
A company’s issued share capital must be included in its published Statement of
financial position as part of shareholders’ funds
If a company makes a bonus issue of ordinary shares, the total shareholders interest
(share capital plus reserves) remains unchanged
19. 16. Which of the following may appear as liabilities in a company’s 2 points
statement of financial position?
Tax payable
Allowance for receivables
Loan due for repayment within one year
Trade payables
20. 17. 2 points
Mark only one oval.
Share Capital $875,000; Share Premium $285.000
21. 18. Which of the following statement regarding the Statement of profit or 2 points
loss for a limited company, is correct?
Accounting standards define the expenses which are reported under ‘cost of sales’
‘Depreciation’ appears as a separate heading
Irrecoverable debts written off will be included under one of the statutory expense
headings (usually administrative expenses)
Interest payable is subtracted from the profit after taxation
22. 19. Which of the following statements about bank reconciliations are correct? 2 points
Mark only one oval.
2 and 3
1 and 3
2 and 4
1 and 4
23. 20. Which of the following accounts would be expected to have a debit 2 points
balance at the end of the year?
Payables
Capital
Discounts allowed
Purchases
Sales
Returns inwards
24. 21. The cash account shows a balance of $$13,620 overdrawn at 30 2 points
September 2015. It is later discovered that a standing order for $300 has
been entered twice, and that a dishonoured cheque for $1,080 has been
debited in the cash account instead of credited. What is the correct
balance?
Mark only one oval.
$15,480 overdrawn
$15,000 overdrawn
$12,240 overdrawn
$14,400 overdrawn
25. 22. Silver Co made sales of $193,200 during the year ended 31 August X1. 2 points
Inventory decreased by $13,200 over the year and all sales were made at
a mark up of 42%. What was the cost of purchases during the year, to the
nearest $1,000?
Mark only one oval.
$149,000
$123,000
$109,000
$136,000
26. 23. The credit column of a trial balance is $1,200 more than the debit 2 points
column. Which of the following errors would fully account for the
difference?
Mark only one oval.
No entries had been made for the purchase of goods costing $1,200
The debit side of the cash account had been over-added by $1,200
Cash sales of $600 had been correctly entered in the sales account, and credited to
the cash account
A payments of 1,200 for electricity had been correctly, and credited to the
electricity account
27. 24. Which of the following correctly describes the entry in the 2 points
receivables account for a sale by a trader who is registered for sales tax?
Mark only one oval.
Credit with the total of sales made, including sales tax
Debit with the total of sales made, excluding sales tax
Credit with the total of sales made, excluding sales tax
Debit with the total of sales made, including sales tax
28. 25. Alison is not registered for sales tax purposes. She has recently 2 points
received an invoice for goods for resale which cost $500 before sales
tax, which is charged at 15%. The total cost was therefore $575. What is
the correct entry to be made in Alison’s ledger in respect of this invoice?
Mark only one oval.
DR Purchases $575; CR Payables $575
DR Purchase $575; CR Sales tax $75; CR Payables $500
DR Purchases $500; CR Payables $500
DR Purchases $500; DR Sales tax $75; CR Payables $575
29. 26. Which of the following material events after the reporting period and 2 points
before the financial statements are approved are adjusting events?
A customer owing $200,000 went bankrupt

Some inventory valued in the statement of financial position at $300,000 was sold for
$250,000
A factory with a value of $1,000,000 was destroyed by fire
The company issued 2,000,000 ordinary shares
30. 27. What is the role of the International Financial Reporting Interpretations 2 points
Committee?
Mark only one oval.
To issue guidance on the application of International Financial Reporting

Standards
To create a set of global accounting standards
31. 28. Should details of material adjusting or material non-adjusting events 2 points
after the Statement of Financial Position date be disclosed in the notes to
financial statements according to IAS10.
Mark only one oval.
Adjusting events
Non-adjustung events
32. 29. Which of the following statements are correct? 2 points
Mark only one oval.
1 only
2 only
3 only
1, 2 and 3
33. 30. The accounts of Lola plc for year ended 31 December 2010 include the 2 points
following information:
Mark only one oval.
1.18
1.34
0.75
0.49
34. 31. Part of a company’s Statement of cash flows is shown below: 2 points
Proceeds of sale of non-current assets should not appear in this part of the Statement of
cash flows
Increase in payables should have been subtracted, not added
Increase in inventory should have been added, not subtracted
Depreciation charges should have been added, not subtracted
35. 32. The accounts of Lola plc. for year ended 31 December 2010 include the 2 points
following information:
Mark only one oval.
211 days
32 days
95 days
49 days
The following information is for questions 33-35
On 1 January 2009, X paid $21,600 to acquire 90% of the ordinary shares of y which
was incorporated on that date. At 31 December 2010 the statements of financial
position of the each of the two companies were as follows:
36. 33. What amount should appear for goodwill in the consolidated 2 points
Mark only one oval.
$21,600
$24,000
$ nil
$19,500
37. 34. What amount should appear for retained earnings in the consolidated 2 points
38. 35. What amount should appear for non-controlling interest in the 2 points
consolidated statement of financial position?
The Statements of financial position of both Alice and Bertha at 30 June 2014
Alice $'000
Bertha $'000
Non-current assets:
Property, plant and equipment 240
72
Investment in Bertha, at cost 85
0
Current assets:
Inventory 22
48
Receivables 264
60
Cash at bank 24
12
Total Assets 635

192
Equity:
Share Capital 36
Section
12
B - Part Retained earnings 189
72
1
Total Equity 225
84
Non-current liabilities 290

70
Current Liabilities 120
38
Total Liabilities 410

108
Additional information:
1)Alice bought 90% of the equity share capital of Bertha two years ago on 1 July 2012,
when the retained earnings of Bertha stood at $12,000.
2)During the year Alice had transferred goods to Bertha for $45,000 – this figure includes
a mark-up of 50%. Two thirds of these goods remained in inventory at the year end.
3)The balance on the current account between Alice and Bertha was $53,000 at the year
end.
4)The fair value of the non-controlling interest at the date of acquisition was $10,000
You are required to prepare a consolidated statement of financial position.
39. 1. What is the amount of Goodwill on consolidation?('000) (4 marks) 4 points
40. 2. What figure will appear for Retained earnings?('000) (4 marks) 4 points
41. 3. What figure will appear for Receivables?('000) (1 marks) 1 point
42. 4. What amount will appear for Share capital? ('000) (1 marks) 1 point
43. 5. What amount will appear for Non-controlling interest? ('000) (4 marks) 4 points
44. 6. What is the value of inventory?('000) (1 marks) 1 point
The following financial statements of Downton llc for the year ended 31 December
2013
Statement of financial position as at 31 December 2013
2013 $'000
2012 $'000
Non-current assets 84.000

32.000
Current assets:
Inventory 7.200
11.400
Receivables 10.500
9.200
Cash 4.100
2.600
Total assets 105.800

55.200
Equity:
Ordinary share capital 20.000
15.000
Retained earnings 39.700
15.900
Revaluation reserve 8.000
0
Section B - Total Equity 67.700

30.900
Part 2
Non-current liabilities 22.100
14.000
Current liabilities:
Trade payables 8.400
6.200
Taxation 7.600
4.100
Total Liabilities 38.100

24.300
Statement of profit or loss for the year ended 31 December 2013
$'000
Profit before tax 32.300

Taxation 8.500
Profit after tax 23.800
Additional information:
1)The depreciation expense for the year was $8,200,000.
2)No dividend was paid during the year.
You are required to prepare the Statement of cash flows for the year ended 31
December 2013
45. Task 1. What figure will appear on the Statement in respect of tax paid? 2 points
('000)
Task 2. Complete followings:
46. 2.1 Profit before tax: 32.300.000 4 points

Profit before tax: 32.300.000
Mark only one oval per row.
Add Less
Depreciation
Change in inventory
Change in receivables
Change in payables
47. 2.2 Cash generated from operations: ('000) 2 points
48. Task 3. What is the figure for ‘acquisition of non-current assets’ to appear 2 points
in the Statement? ('000)
49. Task 4. Under which heading on the Statement of cash flows will 1 point
‘acquisition of non-current assets appear?
Mark only one oval.
Operation Activities
Investing Activities
Financing Activities
None of them
Task 5. Complete the followings: Cash Flow from Financing Activities
50. 5.1 Issue of shares: ('000) 1 point
51. 5.2 Loan: ('000) 1 point
52. Task 6. In preparation of this Statement of cash flows, we have used the 2 points
________ method in arriving at the cash generated from operations. Had
we used the alternative method, we would have arrived at the _______
answer
Mark only one oval.
Direct; Same
Direct; Different
Indirect; Same
Indirect; Different
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31.01.

2022 09:10 FA - Final Mock Exam

FA - Final Mock Exam

This paper is divided into two sections:

Section A – ALL 35 questions are compulsory and MUST be attempted

Time allowed 2 hours

2. Name and surname *

Mark only one oval.

5. 2. The purpose of a statement of financial position is to show 2 points

Mark only one oval.

A clear and definite estimate of what a business is really worth

The amount the business could be sold for in liquidation

The amount the business could be sold for as a going concern

Mark only one oval.

Mark only one oval.

quarterly in advance on 1 January, 1 April, 1 July, and 1 October each year.

Mark only one oval.

Income $27.000; Advance $2.500

Income $27.500; Advance $5.000

Income $27.000; Accrued Income $2.500

Income $27.500; Accrued Income $5.000

11. 8. What is the purpose of charging depreciation in accounts? 2 points

Mark only one oval.

Mark only one oval.

Loss on disposal $28.80

Profit on disposal $28.80

Loss on disposal $240

Profit on disposl $240

Check all that apply.

General administrative overheads

Mark only one oval.

Inventory at 30 June will be understated

Inventory at 30 June 2013 will be overstated

Profit for the year ended 30 June 2013 will be overstated

Profit for the year ended 30 June 2014 will be overstated

At 30 June 2006, trade receivables totaled $517,000 and it was decided

Mark only one oval.

18. 15. Which of the following statements are correct? 2 points

Check all that apply.

Check all that apply.

20. 17. 2 points

Mark only one oval.

Share Capital $875,000; Share Premium $285.000

Share Capital $875,000; Share Premium $310.000

Share Capital $750,000; Share Premium $285.000

Share Capital $750,000; Share Premium $310.000

Check all that apply.

Mark only one oval.

Check all that apply.

Mark only one oval.

Mark only one oval.

Mark only one oval.

Mark only one oval.

Credit with the total of sales made, including sales tax

Debit with the total of sales made, excluding sales tax

Credit with the total of sales made, excluding sales tax

Debit with the total of sales made, including sales tax

Mark only one oval.

DR Purchases $575; CR Payables $575

DR Purchase $575; CR Sales tax $75; CR Payables $500

DR Purchases $500; CR Payables $500

DR Purchases $500; DR Sales tax $75; CR Payables $575

Check all that apply.

A customer owing $200,000 went bankrupt