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ACCA Paper F3: Financial Accounting (International)

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Practice Questions and Answers

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ACCA Paper F3: Financial Accounting (International)

ACCA Paper F3: FINANCIAL ACCOUNTING (INTERNATIONAL) Practice Questions and Answers
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uk 3 .uk/exam-material/how-to-buy Good luck with your studies. This condition is enforced to protect our digital rights.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) DOWNLOAD SAMPLE Welcome to our download sample of the Tony Surridge +AddVance E-book publication: ACCA Paper F3 – Financial Accounting (International) – Practice Questions and Answers Thanks for taking time to review a download extract of this Study Text publication which we have developed specially for the ACCA Paper F3: Financial Accounting (International). We hope you like our electronic study material and recognise that at an extremely low price from just £3 (plus VAT where applicable) the complete purchased and downloaded version represents true value for money. then you will need to purchase another computer license from our website. You may like to learn some details about the full version: (please note these details may vary slightly depending on which updated version you have purchased) Pages Diagnostic Questions and Answers: Syllabus: Questions and Answers 5 Diagnostic Tests : Questions and Answers 390 472 250 722 Hundreds of hyperlink connections It is important for you to know that each Tony Surridge +AddVance E-book can only be used on the computer which is licensed with your unique customer ID (given at point of purchase). the selection shown here is Tutorial 3 in full. as highlighted in the table of contents. taken directly from the full version. 2012 www. This is only a small sample. The E-book can. as long as the printer is recognised by our software and is connected via cable. be printed from the licensed computer. ©Tony Surridge Online Limited.tonysurridge. For further details on minimum computer requirements and our license restrictions please visit our webpage at www. For illustrative purposes. and activate on your second computer.co. If you wish to use this +AddVance Study Guide on two separate computers (such as a desktop and laptop). however. The data cannot be transferred to any portable memory or any other computer or electronic device.tonysurridge.co. All hyperlinks are fully functional only in the full downloaded version when purchased. and as such not all hyperlinks will be active.

tonysurridge.co. 2012 www. Voltaire ©Tony Surridge Online Limited.uk 4 .Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) No snowflake in an avalanche ever feels responsible.

“and go on till you come to the end: then stop.” the king said gravely.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) Main Page Copyright statement For the ladies only 10 Golden Rules for a Computer-based Examination Computer Based Exams ACCA Paper F3 Financial Accounting (International) +AddVance Practice Questions and Answers Syllabus The structure of the syllabus and study guide Level of assessments .Guided learning hours Guide to exam structure Guide to examination assessment Qualification structure Syllabus structure Aim Rationale Main capabilities Relational diagram of main capabilities Detailed syllabus Approach to examining the syllabus Study Guide A B C D E F G H The content and purpose of financial reporting The qualitative characteristics of financial information The use of double-entry and accounting systems Recording transactions and events Preparing a trial balance Preparing basic financial statements Preparing simple consolidated financial statements Interpretation of financial statements Your Study Material The syllabus outline and our Questions and Answers pathway through it Click here In ADDITION there are FOUR tests.” Lewis Carroll Through the Looking-Glass ©Tony Surridge Online Limited.co. 2012 www. Click below.tonysurridge.uk 5 . “Begin at the beginning. Tests Diagnostic Test – 1 Diagnostic Test – 2 Diagnostic Test – 3 Diagnostic Test – 4 ACCA Pilot Paper Questions Questions Questions Questions Questions Answers Answers Answers Answers Answers This free sample shows Diagnostic Test 1 and the first 16 answers “Where shall I begin. please your majesty?” he asked.Intellectual demand Value of assessments (based on UK frameworks) .

tonysurridge.uk 6 .co. 2012 www.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) The syllabus outline and our pathway through it …. Syllabus section A B C D E F G H Main topic Pages Questions The context and purpose of financial reporting The qualitative characteristics of financial information The use of double-entry and accounting systems Recording transactions and events Preparing a trial balance Preparing basic financial statements Preparing simple consolidated financial statements Interpretation of financial statements Diagnostic Test 1 Diagnostic Test 2 Diagnostic Test 3 Diagnostic Test 4 ACCA Pilot Paper Answers 23 46 51 85 144 191 230 239 250 274 302 322 361 37 49 71 120 169 214 236 246 268 292 314 343 380 This free sample shows Diagnostic Test 1 and the first 16 answers ©Tony Surridge Online Limited.

co.uk Paper F3 7 .tonysurridge.1 QUESTION PAPER Time allowed: 2 hours All FIFTY questions are compulsory and MUST be attempted Each question is worth 2 marks Do NOT attempt this test until you are ready for the test. ©Tony Surridge Online Limited. 2012 www.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) +AddVance Financial Accounting (International) DIAGNOSTIC TEST .

500 $97.000 and to adjust the allowance for receivables to the equivalent of 5 per cent of the trade receivables based on past events.690 21. neutrality and prudence.000.000 $23. What total figure should appear in profit or loss for bad debts and allowance for receivables. accruals and going concern. comparability and accruals.860 9. Which of the following are examples of those qualitative characteristics? A B C D Neutrality.000.000 $61.500 A (2 marks) 4 The IASB’s Framework for the preparation and presentation of financial statements gives qualitative characteristics that make financial information reliable. At 30 June 2011 trade receivables totaled $517.300 16. A (2 marks) 5 The following bank reconciliation statement has been prepared by a trainee accountant: $ 3.500 $33.500 and it was decided to write off balances totalling $43. At 31 December 2011 the company’s trade receivables were $1.000.850 A (2 marks) 3 At 1 January 2011 a company had an allowance for receivables of $66. Neutrality. comparability and true and fair view.500 as irrecoverable.713 $55. based on past experience. In addition it was decided to adjust the allowance for receivables to 5% of the remaining receivables. for the year to 31 December 2010? A B C D $31.uk 8 .160 5. It was decided to write off debts totaling $37. 2012 www. What figure should appear in the income statement for the year ended 30 June 2011 for these items? A B C D $24.990 (The question continues on the next screen) A Overdraft per bank statement less: Outstanding cheques add: Deposits credited after date Cash at bank as calculated above ©Tony Surridge Online Limited.850 $22.123.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 1 Should details of material adjusting or material non-adjusting events after the statement of financial position date be disclosed in the notes to financial statements according to IAS 10 Events After the statement of financial position Date? A B Non-Adjusting events Adjusting events A ( 2 marks) 2 At 30 June 2010 a company’s allowance for receivables was $39.tonysurridge.co. Prudence. Faithful Representation.

Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) What should be the correct balance per the cash book? A B C D 6 $3. he must be. A receipt of $800 for commission receivable has been omitted from the records.tonysurridge. as opposed to treating them as a 'bag of symptoms.990 balance at bank as stated A (2 marks) Which of the following calculates a trader’s net profit for a period? A A B C D 7 Closing net assets – drawings + capital introduced – opening net assets Closing net assets + drawings + capital introduced – opening net assets Closing net assets + drawings – capital introduced – opening net assets Closing net assets – drawings – capital introduced – opening net assets (2 marks) A sole trader took some goods costing $800 from inventory for his own use. Brooklyn College.co. 2012 www. He stressed the importance of focusing on the positive qualities in people.600. Which of the following journal entries would correctly record this? Dr $ 1. a poet must write. (2 marks) A A musician must make music. an artist must paint. The petty cash balance of $800 has been omitted from the trial balance.670 balance at bank $11. Abraham Maslow Abraham Harold Maslow (1908 – 1970) was an American professor of psychology at Brandeis University.390 balance at bank $3. New School for Social Research and Columbia University who created Maslow's hierarchy of needs. $400 paid for plant maintenance has been correctly entered in the cash book and credited to the plant asset account.670 overdrawn $21. The normal selling price of the goods is $1. if he to be at peace with himself.600 A A B C Sales account Drawings account Drawings account Inventory account Drawings account Purchases account 8 The debit side of a company’s trial balance totals $800 more than the credit side. Which one of the following errors would fully account for the difference? A B C D Discount received $400 has been debited to discount allowed account.600 800 800 800 800 (2 marks) Cr $ 1. What a man can be.uk 9 .‘ Abraham Maslow ©Tony Surridge Online Limited.

100 A (2 marks) 10 Should dividends paid appear on the face of a company’s income statement? A A B 11 No Yes (2 marks) The following control account has been prepared by a trainee accountant: Receivables ledger control account $ Opening balance 308.100 $101. It was later found that $18. What is the depreciation charge for the year ended 31 December 2011 and the revaluation reserve balance as at 1 January 2011? Depreciation charge for year ended 31 December 2011 $ 25. Closing balance 555. It is the company’s policy to depreciate motor vans at 25 per cent per year on the straight line basis.000 200. What would the net profit be after adjusting for this error? A B C D $70.600. a limited liability company.100 $97.100 $395. On 1 January 2011 a revaluation to $1.800 396.600 Cash received from credit customers Credit sales 154.900 2.800 555.400 2. owned a building that cost $800.000 was recognised.co.000 on 1 January 2001.500 A $ 147. It was being depreciated at two per cent per year.000 200.000 paid for the purchase of a motor van had been debited to the motor expenses account.300 (2 marks) 12 At 31 December 2010 Q.000 A A B C D (2 marks) ©Tony Surridge Online Limited.000.600 $106. with a full year’s charge in the year of acquisition.000 20.500 $307. 2012 www.000 360.tonysurridge.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 9 A company’s income statement for the year ended 31 December 2011 showed a net profit of $83.000 20.600 Allowances for receivables .000 Revaluation reserve as at 1 January 2011 $ 360.200 1.100 Interest charged on overdue accounts Contras against credit Bad debts written off balances in payables ledger 4.500 What should the closing balance be when all the errors made in preparing the receivables ledger control account have been corrected? A B C D $309.200 Discounts allowed to credit customers Cash sales 88.200 $304.uk 10 .000 25. At this date the building had a remaining useful life of 40 years.400 4.

Carriage outwards.000 B Income statement Inventory account Inventory account Income statement C Inventory account Income statement Income statement Inventory account D Inventory account Purchases account 86.co.uk A (2 marks) ©Tony Surridge Online Limited. The amount of the adjustment in the current period and in comparative information for prior periods. 2 and 3 1 and 2 only 1 and 3 only 2 and 3 only A (2 marks) 15 According to IAS 2 Inventories.000 96.000 96.400 86.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 13 A business had an opening inventory of $86.400 86. 2 and 3 only 1 and 3 only All four items 1. Which of the following disclosures are required by IAS 8 Accounting policies. Depreciation of factory plant.000 86. An estimate of the effect of the change on the next five accounting periods.000 96.000 (2 marks) A 14 A company has made a material change to an accounting policy in preparing its current financial statements.000 96. 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.000 Inventory account 96.tonysurridge. 1.400 96. 2 and 4 only www. Which of the following entries for the opening and closing inventory figures are made as yearend adjustments for inventory? Dr Cr $ $ A Purchases account 96. 2012 11 . General administrative overheads.000 in its financial statements for the year ended 30 September 2011.400 96. changes in accounting estimates and errors in the financial statements? 1 2 3 A B C D The reasons for the change.400 and a closing inventory of $96.

Only companies have capital invested into the business. not added.opening capital Opening capital .drawings + capital introduced .closing capital Closing capital .capital introduced . A sole trader is fully and personally liable for any losses that the business might make.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 16 Part of a company’s cash flow statement is shown below: Operating profit Depreciation charges Increase in inventory Increase in accounts payable The following criticisms of the extract have been made: (1) (2) (3) Depreciation charges should have been added. Increase in inventory should have been added.640 (2. 2012 www.drawings + capital introduced .capital introduced .co. Increase in accounts payable should have been deducted. a company’s shareholders are not personally liable for any losses that the company might make. not deducted.opening capital Closing capital + drawings . 1 and 3 only 1 and 2 only 1.tonysurridge. $’000 8.uk 12 . 2 and 3 2 and 3 only A (2) (3) A B C D (2 marks) ©Tony Surridge Online Limited.closing capital A (2 marks) 18 Which of the following are differences between sole traders and limited liability companies? (1) A sole traders’ financial statements are private.160) (330) 440 A Which of the criticisms are valid? A B C D 1 and 3 only 2 only 2 and 3 only 1 only (2 marks) 17 The profit of a business may be calculated by using which of the following formula? A B C D Opening capital + drawings . a company’s financial statements are sent to shareholders and may be publicly filed. not deducted.

000 as an outof-court settlement.000 400.000 Rent received account 18.000 The company’s policy is to charge depreciation at 20% per year on the straight line basis. the most likely outcome is that the company will lose the case and will be required to pay $500.000 $1.000 A (2 marks) 21 Which of the following journal entries are correct.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 19 Which of the following documents should accompany a payment made to a supplier? A B C Purchase invoice Supplier statement Remittance advice A (2 marks) 20 A company is in a legal dispute with a supplier.000 31 Dec Balance 340.000 400.000 2 Share premium account 400.000 Share capital account 1 for 3 bonus issue on share capital of 1. The company’s lawyers have advised that if the case goes to court. The company has denied any liability but has offered $150. The supplier is making a claim for losses suffered as a result of an alleged breach of contract by the company.000 31 March Transfer disposal account 60.co. with proportionate depreciation in the years of purchase and disposal.200. according to their narratives? Dr CR $ $ 1 Suspense account 18.000 Correction of error in posting $24.000. The supplier is claiming $1 million.000 500. (The question continues on the next screen) A ©Tony Surridge Online Limited. because there is only a contingent liability $150.000 3 250.000 $500.000 A B C D 22 (2 marks) The plant and machinery account (at cost) of a business for the year ended 31 December 2011 was as follows: Plant and machinery – cost 2011 2011 $ $ 1 Jan Balance 240.000 30 June Cash – purchase of plant 160.uk 13 .tonysurridge.50 per share in exchange for shares in X 1 only 3 only 1 and 2 only 2 and 3 only A 400.000 50¢ shares issued at $1. What amount should be provided in respect of the claim by the supplier? A B C D Nothing. 2012 www.000 cash received for rent to the rent received account as $42.000 50¢ shares Trade investment in X 750.000 Share capital account Share premium account 500.000 in compensation to the supplier.

000 A (2 marks) 23 Which of the following should appear in a company’s statement of changes in equity? 1 2 3 A B C D Profit for the financial year.000 $68.400 A (2 marks) ©Tony Surridge Online Limited.tonysurridge.000 Inventory in good condition at 30 September 214. what is the value of the inventory lost? A B C D $271.000 $55.co. The following information is available: $ Inventory 1 September 318.000 $96. research expenditure must be recognised as an intangible asset.000 $57. Based on this information.000 Purchases for September 412.000 $64. If certain criteria are met. Amortisation of capitalised development costs.uk 14 .000 $26. Surplus on revaluation of non-current assets. Capitalised development costs are shown in the statement of financial position under the heading of Non-current Assets.000 Standard gross profit percentage on sales is 25%. 1 only 2 only 1 and 3 only 2 and 3 only A (2) (3) A B C D (2 marks) 25 A fire on 30 September destroyed some of a company’s inventory and its inventory records. 2012 www.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) What should be the depreciation charge for the year ended 31 December 2011? A B C D $61.000 Sales for September 612. 1 and 3 only 1 and 2 only All three items 2 and 3 only A (2 marks) 24 Which of the following statements are correct? (1) Capitalised development expenditure must be amortised over a period not exceeding five years.

Outstanding cheques $1.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 26 At 31 December 2010 a company’s capital structure was as follows: Ordinary share capital (500. Between 31 May and 4 June 2011. Cheque paid in by the company and dishonoured $400. Direct debit $350.000 212.000 225.200.000 A In the year ended 31 December 2011 the company made a rights issue of 1 share for every 2 held at $1 per share and this was taken up in full.co.500 A B C D 27 (2 marks) The inventory value for the financial statements of Q for the year ended 31 May 2011 was based on an inventory count on 4 June 2011.100 $818.000 225. Later in the year the company made a bonus issue of 1 share for every 5 held. using the share premium account for the purpose.000 100. the following items are causing the difference between the cash book balance and the bank statement balance: (1) (2) (3) (4) (5) (6) Bank charges $380.600 14.000 (cheque incorrectly debited to the account).tonysurridge. 5 and 6 2.500 250.900 $834.000 shares of 25¢ each) Share premium account $ 125.000 262.uk 15 . the following transactions took place: Purchases of goods Sales of goods (profit margin 30% on sales) Goods returned by Q to supplier $ 8. which gave a total inventory value of $836.475.500 (2 marks) In preparing a company’s bank reconciliation statement at March 2012. What was the company’s capital structure at 31 December 2011? Ordinary share account $ 450.000 700 A What adjusted figure should be included in the financial statements for inventories at 31 May 2011? A B C D 28 $853.000 262.500 Share premium account $ 125.580. Error by bank $1. 2012 www. 2 and 3 1. A Which of these items will require an entry in the cash book? A B C D 3. 4 and 5 1. Lodgements not credited $4.300 $838. 4 and 6 (2 marks) ©Tony Surridge Online Limited.

and was married to Marilyn Monroe. Sale of inventory held at the statement of financial position date for less than cost.000 12.240 NIL D 10. repayable on 1 January 2012.000 covering the six months to 31 December 2011.000 to an employee.240 NIL (2 marks) 30 How should a contingent liability be included in a company’s financial statements if the likelihood of a transfer of economic benefits to settle it is remote? A B 31 No disclosure or provision is required. particularly during the late 1940s. 2012 16 . received the Pulitzer Prize for Drama and the Prince of Asturias Award. charging interest at 2 per cent per year. covering the year ending 31 August 2012.240 C 22. On the due date she repaid the loan and paid the whole of the interest due on the loan to that date. 2 and 4 only 1.co. 1.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 29 At 31 December 2011 the following require inclusion in a company’s financial statements: (1) On 1 January 2011 the company made a loan of $12.tonysurridge. A (2 marks) Which of the following material events after the statement of financial position date and before the financial statements are approved are adjusting events? (1) (2) (3) (4) A valuation of property providing evidence of impairment in value at the statement of financial position date. and it ticks. writing dramas. The insolvency of a customer with a debt owing at the statement of financial position date which is still outstanding.000 B 10. Miller was often in the public eye. www. Arthur Miller Arthur Asher Miller (1915 – 2005) was an American playwright and essayist. Disclosed by note with no provision being made. and 3 only 3 and 4 only 1. A (2) (3) For these items. Discovery of fraud or error affecting the financial statements. a period during which he testified before the House Un-American Activities Committee. In January 2012 the company received rent from a tenant $4.240 6.000 in 2010. 3 and 4 A A B C D (2 marks) The word "now" is like a bomb thrown through the window. what total figures should be included in the company’s statement of financial position at 31 December 2011? Current assets Current liabilities $ $ A 16. 2.uk Arthur Miller ©Tony Surridge Online Limited. The company has paid insurance $9. 1950s and early 1960s. He was a prominent figure in American theatre. 2.

000 $16. Alpha’s payables ledger account for Beta shows a balance due to Beta of $4. 2012 www.140. What rent expense and end of year prepayment should be included in the financial statements for the year ended 30 April 2012? Expense $94.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 32 Alpha received a statement of account from a supplier Beta. The company pays rent for its premises quarterly in advance on 1 January. Alpha’s ledger account has not been adjusted for $40 of cash discount disallowed by Beta. Proposed dividend.uk 17 . A What discrepancy remains between Alpha’s and Beta’s records after allowing for these items? A B C D 33 $9. Is this statement true or false? A B False True A (2 marks) 34 Theta prepares its financial statements for the year to 30 April each year.080 has not been allowed for by Beta. The annual rent was $84. showing a balance to be paid of $8. Dividends received.000 $ 8.000 per year.tonysurridge. Proceeds of issue of shares. 1 July and 1 October each year.000 A A B C D 35 (2 marks) Which of the following items could appear in a company’s cash flow statement? (1) (2) (3) (4) A B C D Surplus on revaluation of non-current assets.000 $93.000 $93.000 Prepayment $ 8. 1 April.850 (2 marks) The business entity concept requires that a business is treated as being separate from its owners.930 $690 $770 $9. 2 and 4 1 and 3 1 and 2 3 and 4 A (2 marks) ©Tony Surridge Online Limited. It was increased from that date to $96.000 $94. Investigation reveals the following: (1) (2) Cash paid to Beta $4.000 $16.co.000 per year until 30 June 2011.950.

co.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 36 What is the role of the International Financial Reporting Interpretations Committee? A B To issue guidance on the application of International Financial Reporting Standards.uk 18 .925 $235. The petty cash book balance $500 had been omitted from the trial balance. A (2) (3) (4) Which of the errors will require an entry to the suspense account to correct them? A B C D 2 and 3 only 1.925 $200.000 $211. 2. Hill receives a 10% trade discount from Mountain and a further 5% settlement discount if goods are paid for within 14 days.000 from Mountain. What amount should be included in Mountain’s receivables ledger for this transaction? A A B C D $209. Sales tax is at 17.800 paid for plant repairs was correctly accounted for in the cash book but was credited to the plant asset account. Cash $2. 2 and 4 only 1.500 (2 marks) 39 A computerised accounting system operates using the principle of double entry accounting.000 was credited to the ordinary share capital account as $330. The following errors were found in Q’s accounting records: (1) In recording an issue of shares at par. (2 marks) A 37 Q’s trial balance failed to agree and a suspense account was opened for the difference. Hill bought goods with a list price of $200. 2012 www. A cheque for $78.400 paid for the purchase of a motor car was debited to the motor vehicles account as $87. Is this statement true or false? A B True False A (2 marks) ©Tony Surridge Online Limited. cash received of $333. Q does not keep receivables and payables control accounts.000. 3 and 4 1 and 4 only (2 marks) 38 Mountain sells goods on credit to Hill.tonysurridge.400.5%. To create a set of global accounting standards.

Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 40 A company receives rent from a large number of properties.500 (2 marks) 41 Annie is a sole trader who does not keep full accounting records.900 $501.960 Contra between payables and receivables ledgers 2.000 Trade receivables.uk 19 . 30 June 2011 84.000 Trade payables.400 Cash paid to suppliers 302.700 Rent in arrears (all subsequently received) 21.000 What figure should appear in Annie’s income statement for the year ended 30 June 2011 for purchases? A B C D $283. 2012 www. The following details relate to her transactions with credit customers and suppliers for the year ended 30 June 2011: $ Trade receivables.tonysurridge. 1 July 2010 130. The following were the amounts of rent in advance and in arrears at 30 April 2010 and 2011: 30 April 2011 $ Rent received in advance 28. The total received in the year ended 30 April 2012 was $481.200.760 $330.760 $331.400 A What amount of rental income should appear in the company’s income statement for the year ended 30 April 2012? A B C D $475.200 30 April 2012 $ 31.000 Trade payables.800 A (2 marks) ©Tony Surridge Online Limited.500 $460.co. 30 June 2011 181.900 $486.800 Discounts allowed 1.200 18.400 Discounts received 2.200 $740. 1 July 2010 60.000 Cash received from customers 686.

Which journal entry will correct the errors? DR A Discounts allowed Discounts received Suspense account Discounts allowed Discounts received Discounts allowed Discounts received Suspense account Discounts allowed Discounts received Suspense account $880 $880 $1.840 $2. The money measurement concept is that only items capable of being measured in monetary terms can be recognised in financial statements.680 $5.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 42 The bookkeeper of Field made the following mistakes: Discounts allowed $3.960 was debited to the discounts allowed account. Discounts received $2. The following errors were discovered: 1 A contra entry of $980 was recorded in the payables ledger control account.900 at 30 June 2011.000. The substance over form convention means that the legal form of a transaction must always be shown in financial statements even if this differs from the commercial effect.tonysurridge.800 $3.434.co.760 $6. 1 only 3 only 2 only 1. 2 and 3 A (2) (3) A B C D (2 marks) 44 The total of the list of balances in Valley’s payables ledger was $438. (The question continues on the next screen) www.344 was posted to the supplier’s account as $4. The total of the purchase returns daybook was undercast by $1.800 $6.920 $1.960 $880 $7.840 was credited to the discounts received account. This balance did not agree with Valley’s payables ledger control account balance. An invoice for $4.760 (2 marks) CR A B C D 43 Which of the following statements are correct? (1) Materiality means that only items having a physical existence may be recognised as assets.uk A 2 3 ©Tony Surridge Online Limited. but not in the payables ledger. 2012 20 .

010 $436. The invoice for the computer showed the following costs related to the purchase: $ Computer 890 Additional memory 95 Delivery 10 Installation 20 Maintenance (1 year) 25 1. A surplus on revaluation of a non-current asset will not appear as an item in a cash flow statement.015 $1.790 A (2 marks) Which of the following statements are correct? (1) A cash flow statement prepared using the direct method produces a different figure for operating cash flow from that produced if the indirect method is used.co.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) What amount should Valley report in its statement of financial position as accounts payable at 30 June 2011? A B C D 45 $438. 2012 www.040 A (2 marks) ©Tony Surridge Online Limited.040 Sales tax (17. A profit on the sale of a non-current asset will appear as an item under Cash Flows from Investing Activities in a cash flow statement.830 $437. 3 only 2 and 4 1 and 4 2 and 3 A (2) (3) (4) A B C D (2 marks) 46 Gareth.5%) 182 Total 1.830 $439.222 $1.222 How much should Gareth capitalise as a non-current asset in relation to the purchase? A B C D $890 $1.tonysurridge.uk 21 . a sales tax registered trader purchased a computer for use in his business. Rights issues of shares do not feature in cash flow statements.

000 $21. The valuation of work in progress must include some fixed and variable production overhead cost.120. 2012 22 .920.000 $21.800 13. including the cost formula used.024.000.000 www.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 47 Which of the following statements about inventory valuation are correct. the fair value of Bond’s non-current assets was $1.440 On 1 January 2009. What is the total amount for non-current assets that will appear on the consolidated statement of financial position at 31 December 2011? A B C D $19.uk (2 marks) ©Tony Surridge Online Limited. Inventory should be valued at the lowest of cost. net realisable value and replacement cost.000 greater than the book value.440 Equity and reserves Share capital Retained earnings Current liabilities 7. for the purpose of financial reporting? 1 2 3 4 It might be acceptable for inventory to be valued at selling price minus gross profit margin. A company’s financial statements must disclose the accounting policies that have been used for inventory valuation. Bond’s statement of financial position at 31 December 2011 is as follows: $’000 Non-current assets Property.360 13. at book value of $10.736. 1.000.440.640 4.560. 3 and 4 only are correct 2 and 4 only are correct All four statements are correct A A B C D (2 marks) 48 What is the correct double entry to record the depreciation charge for a period? A DR CR DR CR Accumulated depreciation Depreciation expense Depreciation expense Accumulated depreciation A B (2 marks) 49 James acquired 100% of the ordinary share capital of Bond on 1 January 2009 when Bond’s retained earnings stood at $1.co. 2 and 4 only are correct 1.200. plant and equipment Current assets A 8.400 3. James had non-current assets at 31 December 2011.tonysurridge.000 $20.680 2.

000 2.000 Statement of comprehensive income for the year ended 31 December 2011 Sales revenue Interest expense Net profit Ignore taxation.6% 11.500.2% 75% 65.000 (2 marks) ©Tony Surridge Online Limited.200. Ashford Company Statement of financial position at 31 December 2011 Non-current assets Current assets Total assets Equity and liabilities Equity Shareholders' capital: issued capital reserves Total equity Non-current liabilities Long-term debt Current liabilities Net assets employed Total equity and liabilities A $ 3.1% Return on net assets 10.000.2% 75% Net profit margin 7.500.000 5.uk 23 .6% 10.1% 6% 6% 7.300.000 2.8% 15% 7. The appropriate ratios are: Debt/equity A B C D 65.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 50 A statement of financial position and other financial data for Ashford Company appear below.co.000 ` 2.000 5.000 1. 2012 www.000.000 80.000.000.000 1.000 2.700.000.000 450.000 300.tonysurridge.

Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) THE END OF DIAGNOSTIC TEST 1 ©Tony Surridge Online Limited.tonysurridge. 2012 www.uk 24 .co.

2012 www.co.uk Paper F3 25 .1 ANSWER GUIDE (PILOT PAPER) Each question is worth 2 marks ©Tony Surridge Online Limited.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) +AddVance Financial Accounting (International) DIAGNOSTIC TEST .tonysurridge.

uk 26 .co. 2012 www.tonysurridge.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) OVERVIEW OF ANSWERS FOR DIAGNOSTIC TEST 1 (PILOT PAPER) Question number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Marks available 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 100 2 hours Answer Question number 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Marks available 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Answer Total marks available : Time allowed : SCROLL SCREEN BY SCREEN TO SEE EACH ANSWER INDIVIDUALLY ©Tony Surridge Online Limited.

000 – 37.000 – (800.000) (12.200 1.200 Q 12 A 1.000.000 + ((517.000) 31.000 Q Q Q Q 13 B 14 B 15 16 B D The answers are continued in the full edition www.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) 1 2 3 A C A $ Irrecoverable debts written off Allowance at end of year 5% × $(1.tonysurridge.200 Cash received 2.600 147.000 x 25%) = 97.000.400 Discounts allowed Bad debts Closing balance 465.160 + 16.670 Q Q Q Q Q Q Q $ 4.000) x 5%) – 39.690 = 3. 2012 .123.100 -3.uk Q 27 ©Tony Surridge Online Limited.200 83. 1.000.500 – 43.500) Allowance at beginning of year Reduction in allowance for irrecoverable debts Total charge for the year 54.co.500 37.000 Q Q Q 4 5 6 7 8 9 10 11 D A C C A D A B Opening balance Credit sales Interest charged Receivables ledger control account $ 308.860 .000/40years = 25.500 $ 43.600 +18.600 Contras 154.100 465.000 – (18.000 x 2% x 10years)) = 360.900 307.400 4.9.000 – (800.000) = 22.000 (66.

uk 28 .co.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) It’s not quite the end Please go to the next screen ©Tony Surridge Online Limited.tonysurridge. 2012 www.

uk “Dedicated to the Accountancy and Finance Profession” ©Tony Surridge Online Limited.tonysurridge. But that link will not work in this free sample copy. To buy the full 722 Practice Questions and Answers version.Practice Questions and Answers MAIN PAGE ACCA Paper F3: Financial Accounting (International) Sorry.uk 29 . complete with all links. please go to www. 2012 www.. for your ACCA F3 studies.tonysurridge.co..co.

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