Started on Sunday, 24 March 2024, 8:32 PM

State Finished
Completed on Sunday, 24 March 2024, 8:35 PM
Time taken 2 mins 10 secs
Marks 2.00/20.00
Grade 1.00 out of 10.00 (10%)

Question 1 Which of the following is not deducted in arriving at a company's operating profit?
Correct

Mark 1.00 out of Select one:

1.00
a. Taxation 
b. Distribution Costs
c. Cost of sales
d. Administration Expenses

The correct answer is: Taxation

Question 2 Which of the following items would not form part of the shareholders’ equity of a company on the statement of financial position?
Incorrect

Mark 0.00 out of Select one:

1.00
a. Share Premium
b. Retained Profits
c. Trade Payables
d. Ordinary share capital 

The correct answer is: Trade Payables

Question 3 Which one of the following would not be included in a full set of company financial statements?
Incorrect

Mark 0.00 out of Select one:

1.00
a. Statement of Financial Position 
b. Cash Budget
c. The Statement of Profit and Loss
d. The Statement of Changes in Equity

The correct answer is: Cash Budget

Question 4 Which of the following statements is likely to be true, for a company making profits?
Incorrect

Mark 0.00 out of Select one:

1.00
a. The profit for the year will be greater than the gross profit.
b. Retained profits at the year-end will be greater than retained profits at the beginning of the year.
c. The operating profit will be less than the profit for the year. 
d. Retained profits at the year-end will be greater than shareholders' equity.

The correct answer is: Retained profits at the year-end will be greater than retained profits at the beginning of the year.
Question 5 Issa plc issues 30,000 £1 shares at £1.30 for each share. Which of the following statements is true?
Incorrect

Mark 0.00 out of Select one:

1.00
a. Ordinary share capital will increase by £30,000 and share premium will increase by £39,000. 
b. Ordinary share capital will increase by £30,000 and share premium will increase by £9,000.
c. Ordinary share capital will increase by £39,000 and share premium will be unaffected.
d. Ordinary share capital will increase by £39,000 and share premium will increase by £9,000.

The correct answer is: Ordinary share capital will increase by £30,000 and share premium will increase by £9,000.

Question 6 Sheba Ltd.’s statement of financial position shows ordinary share capital of £150,000 and share premium of £50,000 at the beginning of a financial year. If the ordinary share capital is £250,000 and share premium is £120,000 at the end of the financial
Incorrect year, how much did the ordinary share issue raise?
Mark 0.00 out of
1.00 Select one:
subtract share premium, then subtract share capital. Then add ans.
a. £370,000 
b. £250,000
c. £100,000
d. £170,000

The correct answer is: £170,000

Question 7 Twisters Ltd made a profit for the year ended 31 March 2020 of £30,000. During that year the company had paid preference dividends on 100,000 5% preference shares. In addition, an ordinary dividend of 4 pence per share was paid on 200,000
Incorrect ordinary shares. What was the retained profit for the year ended 31 March 2020?
Mark 0.00 out of
1.00 Select one:

a. £17,000
b. £25,000
(100,000*0.05) + (0.04*200,000) -30,000
c. £22,000 
d. £30,000

The correct answer is: £17,000

Question 8 Junior plc is a company that, during the year ended 31 December 2020, paid $25,000 debenture interest and paid an ordinary dividend of 8 pence per share on 1 million £1 ordinary shares. The retained profit for the year was $160,000. What was
Incorrect Junior plc's profit for the year?
Mark 0.00 out of
1.00 Select one:

a. $265,000
b. $80,000  0.08*1,000,000 +160,000
c. $240,000
d. $215,000

The correct answer is: $240,000

Question 9 Which of the following would be an entry in the statement of changes in equity?
Incorrect

Mark 0.00 out of Select one:

1.00
a. Long term loans 
b. Revaluation reserve
c. Taxation
d. Revaluation gain

The correct answer is: Revaluation gain

Question 10 During the year ended 30 June 2021, a company's revaluation reserve increased from £300,000 to £380,000 as a result of a property revaluation. At the start of that financial year, the company's property had been valued at £810,000. Assuming that
Correct no property was disposed of during the year, which of the following statements is true?
Mark 1.00 out of
1.00 Select one:

a. The property's revalued amount was £890,000. 

b. The property's revalued amount was £1,190,000.
380,000-300,000 = 80,000 +810,000
c. The property's revalued amount was £1,310,000.
d. The property's revalued amount was £380,000.

The correct answer is: The property's revalued amount was £890,000.

Question 11 Which of the following is not a financial asset?

Incorrect

Mark 0.00 out of Select one:

1.00
a. Inventory
b. Cash
c. Receivables
d. Equity investment 

The correct answer is: Inventory

Question 12 Debt investments not held for collection are reported at

Incorrect

Mark 0.00 out of Select one:

1.00
a. amortized cost. 
b. net realizable value.
c. the lower of amortized cost or fair value.
d. fair value

The correct answer is: fair value

Question 13 Debt investments that meet the business model and contractual cash flow tests are reported at
Incorrect

Mark 0.00 out of Select one:

1.00
a. the lower of amortized cost or fair value.
b. fair value.
c. amortized cost.
d. net realizable value. 

The correct answer is: amortized cost.

Question 14 Which of the following are reported at fair value?

Incorrect

Mark 0.00 out of Select one:

1.00
a. None of these. 
b. Equity investments.
c. Debt investments.
d. Both debt and equity investments.

The correct answer is: Both debt and equity investments.

Question 15 Kern Company purchased bonds with a face amount of $400,000. Kern purchased the bonds at 102 and paid brokerage costs of $6,000. The amount to record as the cost of this debt investment is
Incorrect

Mark 0.00 out of Select one:

1.00
a. $400,000.
b. $408,000.
c. $406,000.  (400,000 x 1.02) + 6,000
d. $414,000.

The correct answer is: $414,000.

Question 16 Use the following information for questions 16 and 17.

Incorrect
Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying $376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton
Mark 0.00 out of
Company uses the effective-interest method and holds these bonds for collection.
1.00
16. On July 1, 2011, Patton Company should increase its Debt Investments account for the Scott Co. bonds by

Select one:

a. $2,392.
b. $1,371. 
c. $1,196. = Interest revenue - Interest received = ($376,100*11%*6/12) - ($400,000*10%*6/12) = $20,686 - $20,000 =
d. $686. $686

The correct answer is: $686.

Question 17 For the year ended December 31, 2011, Patton Company should report interest revenue from the Scott Co. bonds of:
Incorrect

Mark 0.00 out of Select one:

1.00
a. $42,392.
b. $40,000. 
c. $41,368 [0.1*400,000 *6/12 + 686 ] $20,686 + $20,228 = $40,914
d. $41,409

The correct answer is: $41,409

Question 18 Use the following information for questions 18 and 19.

Incorrect
Carsen Company purchased $200,000 of 10% bonds of Garrison Co. on January 1, 2012, paying $211,950. The bonds mature January 1, 2022; interest is payable each July 1 and January 1. The discount of $11,950 provides an effective yield of 9%.
Mark 0.00 out of
Carsen’s objective is to hold the bonds to collect the contractual cash flows. Carsen Company uses the effective interest method.
1.00
18. On July 1, 2012, Carsen Company should decrease its Held-for-collection Debt Investments account for the Garrison Co. bonds by:

Select one:

a. $1,598. 
b. $462. 200,000 * (0.05) + 211,950 *(4.5) ^(9/2)
c. $924.
d. $808

The correct answer is: $462.

Question 19 For the year ended December 31, 2012, Carsen Company should report interest revenue from the Garrison Co. bonds at:
Incorrect

Mark 0.00 out of Select one:

1.00
a. $19,076.
b. $19,055.
c. $19,037.
d. $20,000. 

The correct answer is: $19,055.

Question 20 Held-for-collection investments are reported at

Incorrect

Mark 0.00 out of Select one:

1.00
a. amortized cost
b. fair value
c. maturity value. 
d. acquisition cost

The correct answer is: amortized cost