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ACCA REVISION MOCK

Financial
Accounting
June 2011
QUESTION PAPER
Time allowed 2 hours
ALL questions are compulsory
Do not open this paper until instructed by the supervisor
This question paper must not be removed from the
examination hall
Kaplan Publishing/Kaplan Financial

Paper F3
(INT)
ACCA F3 (INT) Financial Accounting
2 KAPLAN PUBLISHING
© Kaplan Financial Limited, 2011
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Revision Mock Questions
KAPLAN PUBLISHING 3
ALL questions are compulsory
QUESTION 1
Which of the items listed below could appear in a company’s statement of
cash flows?
(i) Dividends received.
(ii) Bonus issue.
(iii) Irrecoverable debts.
(iv) Proceeds of a sale of a non-current asset.
(v) Surplus on the revaluation of a non-current asset.
A (i), (ii) and (iv)
B (i), (ii) and (iii)
C (i) and (iv)
D (ii) and (v) (2 marks)
QUESTION 2
The following bank reconciliation has been prepared by the company’s
bookkeeper as at
31 July 20X9:
$
Overdraft per bank statement 7,700
Add: Unpresented cheques 18,300
Less: Lodgements/deposits credited 30,600
––––––
Bank overdraft per cash book 4,600
––––––
What is the correct balance per the cash book?
A $4,600 overdraft
B $4,600 positive
C $20,000 positive
D $20,000 overdraft (2 marks)
ACCA F3 (INT) Financial Accounting
4 KAPLAN PUBLISHING
QUESTION 3
A company lets out a number of properties. The total rent received in the
year ended 31 July
20X9 was $902,400. The following amounts were received in advance or
were in arrears at
the dates shown:
31 July 20X9 1 August 20X8
$$
Rent received in advance 61,300 27,600
Rent in arrears ( all subsequently received ) 33,500 41,700
What amount of rental income should appear in the statement of
comprehensive income for
the year ended 31 July 20X9?
A $944,300
B $860,500
C $821,700
D $876,900 (2 marks)
QUESTION 4
At 1 August 20X8 a company had receivables of $26,000 and an allowance
for receivables of
$1,860. During the year ended 31 July 20X9 credit sales totalled $300,000,
payments from
credit customers were received amounting to $295,000 debts totalling
$6,800 were written
off. At 31 July 20X9 it was decided to write off further bad debts amounting to
$2,600. At
31 July 20X9 it was decided to make an allowance for receivables of 10% at
the year end.
What figure should appear in the company’s statement of comprehensive
income for the net
bad debt expense for the year ended 31 July 20X9?
A $11,260
B $11,560
C $9,700
D $9,100 (2 marks)
QUESTION 5
When a trade discount is received from a supplier the double entry is as
follows:
Dr Supplier
Cr Trade discount received
Is this statement true or false?
A True
B False (1 mark)
Revision Mock Questions
KAPLAN PUBLISHING 5
QUESTION 6
On 1 August 20X8 Ernie was owed $45,300 by his credit customers. During
the year Ernie’s
credit sales totalled $523,720. Discounts allowed totalled $3,500, returns
from customers
were $2,800 and dishonoured cheques amounted to $4,800. On 31 July 20X9
Eric was owed
$48,720 from his credit customers.
What was the amount received from credit customers during the year ended
31 July 20X9?
A $509,200
B $514,000
C $525,640
D $518,800 (2 marks)
QUESTION 7
Patel, a limited liability company, has provided the following details relating
to motor
vehicles for the year ended 31 August 20X9:
$
1 September 20X8 Opening balance at cost 280,000
1 November 20X8 Disposals of car at cost 48,000
1 January 20X9 Purchase for cash for new vehicles 60,000
1 March 20X9 Acquired a new vehicle details provided are:
− Part exchange allowance for an old car 18,000
− Cash paid 12,000
1 March 20X9 Cost of old car disposed 18,000
The company’s policy is to charge depreciation at 20% per year on the
straight line basis,
with proportionate depreciation in the years of purchase and disposal.
What should be the depreciation charge for the year ended 31 August 20X9?
A $57,200
B $59,000
C $64,400
D $57,800 (2 marks)
QUESTION 8
Which of the following is the best description of an asset?
A A resource paid for by a business
B A resource controlled by a business
C A resource owed by a business (1 mark)
ACCA F3 (INT) Financial Accounting
6 KAPLAN PUBLISHING
QUESTION 9
A business carried out an inventory count on 8 August 20X9 and valued its
inventory at cost
of $17,800. During the period from 1 August and 8 August the following
transactions took
place:
Purchases $5,400
Sales $8,160
The mark up was 20% on cost.
What is the correct value of closing inventory at cost at 31 July 20X9?
A $19,200
B $20,560
C $18,928
D $16,400 (2 marks)
QUESTION 10
The following sales tax account has been provided by Bobby for the quarter
ended 31 July
20X9. The account was prepared by an inexperienced book keeper.
Sales tax account
Bal b/d (amount owing to the
tax authority)
45,800
Bank (part payment on account
to the tax authority) 20,800
Sales (sales tax element) 587,500 Purchases (sales tax element) 564,000
Purchases returns (sales tax
element) 19,975
––––––
Bal c/d 28,525
––––––
633,300
––––––
633,300
––––––
Bal b/d 28,525
What is the correct sales tax balance for the quarter ended 31 July 20X9?
A $21,475 debit
B $68,475 credit
C $28,525 credit
D $48,500 credit (2 marks)
Revision Mock Questions
KAPLAN PUBLISHING 7
QUESTION 11
A company had provided income tax for the previous year of $80,000
however, it paid
income tax of $77,000 this year. At the year-end, the company estimates
that $76,000 is
owed in relation to income tax for the current year.
What amount will be shown in the statement of comprehensive income for
the current yearend
in respect of the income tax?
A $79,000
B $76,000
C $73,000
D None of the above (2 marks)
QUESTION 12
Which of the following are computer packages?
(i) Database
(ii) Word processing
(iii) Spreadsheets
(iv) Memory stick
A All the above
B None of the above
C (i), (ii) and (iii)
D (i), (ii) and (iv) (2 marks)
QUESTION 13
A and B are in partnership, sharing profits in the ratio 1:1 and compiling their
financial
statements to 30 June each year.
On 1 January 20X9 C joined the partnership and it was agreed that the profit-
sharing
arrangement should become A 50%, B 30% and C 20%.
The profit for the year ended 30 June 20X9 was $1,440,000. Assume that the
profit accrues
evenly over the year.
What is A, B and C’s total profit share for the year ended 30 June 20X9?
ABC
A $720,000 360,000 360,000
B $720,000 576,000 288,000
C $720,000 360,000 144,000
D $720,000 576,000 144,000 (2 marks)
ACCA F3 (INT) Financial Accounting
8 KAPLAN PUBLISHING
QUESTION 14
Below are the extracts of the trial balance of Caroline, a limited liability
company, for the
year ended 31 August 20X9:
DR CR
Motor vehicles cost $80,000
Accumulated depreciation $28,800
The company depreciates motor vehicles at 20% per annum on a reducing
balance basis.
What should the depreciation charge for the year ended 31 August 20X9 be.
(1 mark)
QUESTION 15
Which of the following are books of prime entry?
(i) Cash book
(ii) Bank statements
(iii) The journal
(iv) Sales returns day book
(v) The general ledger
A All the above
B (i), (ii) and (iii) and (iv)
C (i), (iii) and (iv) and (v)
D (i), (iii) and (iv) (2 marks)
QUESTION 16
Which of the accounting standards listed below give guidance on tangible
and intangible
non-current assets?
A IAS 2 and IAS 16
B IAS 7 and IAS 10
C IAS 16 and IAS 38
D IAS 2 and IAS 7 (2 marks)
Revision Mock Questions
KAPLAN PUBLISHING 9
QUESTION 17
A company has provided the following balances:
Payables ledger control account $18,000
List of total individual payables $18,200
The book keeper has also provided the following additional information:
(i) A credit purchase invoice amounting to $100 was not recorded in the
books.
(ii) The purchase day book was undercast by $200.
(iii) Debit balances totalling $100 were not included in the list of the total
individual
payables balances.
What is the corrected balance on the payables ledger control account and the
list of total
individual payables balances?
Payables ledger Total individual
control account payables balances
A $18,300 $18,300
B $18,300 $18,200
C $17,900 $18,400
D $18,200 $18,200 (2 marks)
QUESTION 18
Which of the items below would be included in the statement of changes in
equity?
(i) Opening balance of the share premium account.
(ii) The profit after tax.
(iii) Dividends proposed after the year end,
(iv) Revaluation surplus.
(v) Issue of shares.
A All the above
B (i), (ii) and (iii) and (iv)
C (i), (ii) and (iv) and (v)
D (i), (iii) and (iv) and (v) (2 marks)
ACCA F3 (INT) Financial Accounting
10 KAPLAN PUBLISHING
QUESTION 19
The following errors have been discovered in the records of Ami, a limited
liability company:
(i) The rent account was credited with a payment of rent amounting to
$3,000. The bank
account was correctly recorded.
(ii) Credit sales totaling $2,000 was not recorded in the books.
(iii) A payment of $89 was correctly recorded in the bank account but was
debited in the
payables as $98.
What was the original suspense account figure before the above errors were
discovered?
(2 marks)
QUESTION 20
Sara, a limited liability company, depreciates its plant and machinery at 20%
per annum on
the reducing balance, on assets held at the statement of financial position
date. On
1 January 20X9 it held a machine which had cost $20,000 in the year ended
31 December
20X7. In the year ended 31 December 20X9 the company part-exchanged
this machine for a
new machine. The amount paid for the new machine was $17,000 and a part
exchange
allowance of $13,000 was allowed for the old machine.
What is the profit or loss on disposal of the old machine?
A Profit $800
B Profit $3,000
C Loss $200
D Profit $200 (2 marks)
QUESTION 21
The International Accounting Standards Council (IASC) is the supervisory
body for the
regulatory framework of accounting.
A True
B False (1 mark)
Revision Mock Questions
KAPLAN PUBLISHING 11
QUESTION 22
William, a limited liability company, has the following building in its financial
statements as
at 30 June 20X9:
Cost $1,200,000
Accumulated depreciation $(300,000)
–––––––––
Net book value $900,000
–––––––––
It has been decided to revalue the property to $1,800,000 on 1 July 20X9.
What is the double entry to record the above revaluation?
$
A Dr Cost 600,000
Dr Accumulated depreciation 300,000
Cr Revaluation reserve 900,000
B Dr Cost 900,000
Cr Revaluation reserve 900,000
C Dr Cost 600,000
Cr Revaluation reserve 600,000
D Dr Revaluation reserve 900,000
Cr Cost 600,000
Cr Accumulated depreciation 300,000 (2 marks)
QUESTION 23
The following items are listed in the company’s financial statements as at 31
August 20X9:
$
Payables 20,000
Cash 2,000
Buildings 80,000
Receivables 15,000
Inventory 21,000
Bank overdraft 5,000
What is the capital at 31 August 20X9?
(2 marks)
ACCA F3 (INT) Financial Accounting
12 KAPLAN PUBLISHING
QUESTION 24
Which of the following statements is incorrect?
A Under the consistency concept items must always be treated in the same
way even if
circumstances change
B According to the money measurement concept only items which can be
objectively
expressed in monetary terms should be included in the financial statements
C The prudence concept involves an exercise of caution when making
estimates in
financial statements. It therefore ensures that assets and income are not
overstated
and losses and liabilities are not understated
D According to the materiality concept an item is material if its omission or
misstatement might reasonably be expected to influence the economic
decisions of
the users
(2 marks)
QUESTION 25
A company made a profit of $250,000 for the year after charging depreciation
of $28,000.
During the year it paid off a loan of $50,000, made payments for non-current
assets totalling
$90,000, issued shares for $100,000 and had an increase in inventories of
$18,000.
What will be the increase in cash and bank balances at the end of the year?
A $256,000
B $192,000
C $220,000
D $260,000 (2 marks)
Revision Mock Questions
KAPLAN PUBLISHING 13
QUESTION 26
Handy, a limited liability company, has the following balances in its
statement of financial
position as at 30 June 20X8 and 30 June 20X9:
30 June
20X9
30 June
20X8
$$
Current liabilities
Taxation payable 16,000 10,000
Proposed dividends (declared before the year end) 4,000 2,000
Non-current liabilities
10% Loan notes 70,000 70,000
Capital and reserves
Accumulated profits 105,000 55,000
What is the profit before interest and tax of Handy for the year ended 30 June
20X9?
A $82,000
B $78,000
C $77,000
D $28,000 (2 marks)
QUESTION 27
An error of original entry will result in the disagreement of the trial balance
totals.
Is this statement true or false?
A True
B False (1 mark)
QUESTION 28
X, Y and Z are in partnership. The profit of the partnership for the year ended
31 July 20X9 is
$378,000. The partnership agreement provides that the partners are entitled
to a salary and
interest on capital as follows:
Salary Interest on capital
X $12,000 $5,000
Y $18,000 $7,000
Z $24,000 $12,000
The profit sharing ratio for X, Y and Z is 5:4:1. The partnership agreement
states that X is
entitled to a guaranteed minimum profit share of $170,000. What is the total
share of the
profits that each partner is entitled to for the year ended 31 July 20X9?
XYZ
A $167,000 $145,000 $66,000
B $170,000 $147,400 $66,600
C $170,000 $145,000 $66,000
D $170,000 $142,600 $65,400 (2 marks)
ACCA F3 (INT) Financial Accounting
14 KAPLAN PUBLISHING
QUESTION 29
Which of the following statements is correct?
A All research and development expenditure must be written off in the period
during
which the expenditure is incurred
B Dividends proposed after the year end must be accrued in the accounts
C Contingent liabilities should always be provided in the accounts
D A change in an accounting policy will result in a prior period adjustment (2
marks)
QUESTION 30
The following information relates to Barbara’s business for the year ended 30
June 20X9:
$
Sales 800,000
Returns outwards 12,000
Opening inventory 60,000
Carriage outwards 3,800
Carriage inwards 4,500
Purchases 780,000
Goods withdrawn by the owner 1,600
Closing inventory 62,000
Discounts received 5,500
What is the expected gross profit for the year?
A $31,100
B $7,100
C $62,455
D $70,000 (2 marks)
QUESTION 31
It has been established that there is a possibility of a transfer of economic
benefits to settle
a contingent liability. How should this be dealt in the financial statements?
A It should be ignored
B It should be disclosed (1 mark)
Revision Mock Questions
KAPLAN PUBLISHING 15
QUESTION 32
Loon and Noon are in partnership sharing profits and losses in the ratio of
2:3. Moon joins
the partnership on 1June 20X7and it was decided to make the following
changes:
The profit share ratio is to be revised to 4:4:2.
Property to be revalued upwards by $80,000.
Goodwill to be valued at $35,000. It has been decided to maintain the
goodwill
account after the admission of Moon.
Noon’s capital account had a balance of $70,000 credit before the above
changes.
What is the capital account of Noon after the above adjustments?
A $125,000 Cr
B $105,800 Cr
C $116,000 Cr
D $139,000 Cr (2 marks)
QUESTION 33
Sarah, a limited liability company, has a balance on a development project at
the beginning
of the year amounting to $720,000. During the year ended 30 June 20X9
further costs of
$120,000 were incurred. The project was completed during the year and
production and
sales started on 1 April 20X9. The project is expected to last for 4 years from
1 April 20X9.
How much of the costs should be charged to the statement of comprehensive
income (SOCI)
for the year ended 30 June 20X9 and how much should be capitalised in the
statement of
financial position (SOFP) as at 30 June 20X9?
(SOCI) (SOFP)
$$
A 210,000 630,000
B 45,000 795,000
C 52,500 785,500
D None 840,000 (2 marks)
ACCA F3 (INT) Financial Accounting
16 KAPLAN PUBLISHING
QUESTION 34
On 31 August, the cash book balance of Alex, a limited liability company,
shows a credit
balance of $550. It was discovered that bank charges of $80 and an amount
received from a
customer directly into the bank of 400 was not yet recorded. There were
unpresented
cheques of $800 and lodgements/deposits of $300 at the year end. The bank
had deducted
in error from Alex’s account a payment of $60 relating to another customer.
What is the balance in the bank statement?
A $210 Cr
B $670 Dr
C $1,310 Cr
D $230 Dr (2 marks)
QUESTION 35
Hilary, a limited liability company, has the following capital structure:
$
100,000 Ordinary shares of 50c each 50,000
10,000 20% Preference Shares of $1 each 10,000
The preference shareholders have had their dividend paid during the year.
The following information has been provided for ordinary shareholders:
(i) Dividends declared before the year end was 5 cents per share.
(ii) Dividends declared after the year end was 3%.
What are the dividends that should be included in the statement of changes
in equity
(SOCIE) and the statement of financial position (SOFP) for the year ended
31 March 20X9?
(SOCIE) (SOFP)
$$
A 8,500 6,500
B 7,000 5,000
C 7,000 6,500
D 2,000 Nil (2 marks)
Revision Mock Questions
KAPLAN PUBLISHING 17
QUESTION 36
Yvette, a limited liability company, has had the following changes in its share
capital and
loans during the year.
(i) A bonus issue of $70,000.
(ii) A rights issue of $120,000.
(iii) A repayment of $80,000 10% loan notes.
(iv) A receipt of $130,000 8% loan notes.
What amount would appear under the financing activities heading of the
statement of cash
flows?
A $240,000 net inflow
B $120,000 net inflow
C $50,000 net inflow
D $170,000 net inflow (2 marks)
QUESTION 37
At 1 September 20X8 a company had a receivables balance of $540,000 and
an allowance for
receivables of $5,400. During the year ended 31 August 20X7 credit sales
were $2,500,000
and amounts received from credit customers totalled $2,485,000. It was
decided to adjust
for the following:
(i) To write off debts of $55,000.
(ii) To make a specific allowance of $10,000.
(iii) To make a general allowance of 10%.
What figure will appear in the company’s statement of financial position for
net receivables
at 31 August 20X9 after adjusting for the above items?
A $500,000
B $490,000
C $441,000
D $450,000 (2 marks)
QUESTION 38
IAS 2 states that inventory should be valued at the lower of cost and net
realisable value.
Which of the following concepts is this in accordance with?
A Accruals
B Prudence (1 mark)
ACCA F3 (INT) Financial Accounting
18 KAPLAN PUBLISHING
QUESTION 39
Ban, Can and Dan are in partnership. During the year ended 30 June 20X9,
the partnership
made a profit of $207,000. The partnership agreement stated that profits
were to be shared
in the ratio of 2:2:1 after providing for interest on capital of 10% for each of
the partners.
Other information provided is as follows:
Ban Can Dan
$$$
Capital balances b/f 30,000 25,000 15,000
Current balances b/f 3,000 Dr 5,800 Cr 3,200 Cr
Drawings during the year 48,000 56,000 42,000
What is the balance on Ban’s current account at 30 June 20X9?
A $32,000 Cr
B $32,000 Dr
C $38,000 Cr
D $38,000 Dr (2 marks)
QUESTION 40
Which of the following best describes an accrued expense?
A An expense that has been incurred in this accounting period but will be
paid for in the
next accounting period
B An expense that has been incurred in this accounting period but that was
paid for in
the last accounting period (1 mark)
QUESTION 41
The following details have been provided for a business:
$
Opening payables 35,800
Credit purchases 400,000
Cash purchases 58,000
Payments to credit suppliers 348,000
Discounts allowed 32,000
Discounts received 28,000
Sales ledger contra 14,000
Returns inwards 3,500
Returns outwards 5,800
What should be the closing balance on the payables control account at the
year end?
A $38,300 credit
B $68,000 credit
C $40,000 credit
D $98,000 credit (2 marks)
Revision Mock Questions
KAPLAN PUBLISHING 19
QUESTION 42
The statement of financial position of Robert, a limited liability company, as
at 31 December
20X8 and 20X9 showed proposed dividends declared before the year end of
$60,000 and
$65,000 respectively. The statement of changes in equity for the year ended
31 December
20X9 showed dividends of $100,000.
How much should be shown in the statement of cash flows of Robert for the
year ended
31 December 20X9 relating to the dividends paid?
A $100,000
B $40,000
C $105,000
D $95,000 (2 marks)
QUESTION 43
At 30 April 20X9 James had three items of closing inventory that had been
valued as follows:
Cost NRV
Product A $560 $550
Product B $1,400 $1,600
Product C $320 $296
The correct value of closing inventory to be included in James financial
statements should
be:
(1 mark)
QUESTION 44
A company’s trial balance totals were:
Debit $42,333
Credit $27,689
A suspense account was opened for the difference.
Which one of the following errors would have the effect of increasing
difference when
corrected?
A No entry has been made in the accounting records for cash sales of $2,795
B The cash in hand balance of $1,000 was omitted from the trial balance
C $8,000 paid for a motor van has been correctly recorded in the cash book
and debited
to the motor expenses account
D $6,000 received from a credit customer has been correctly recorded in the
cash book
and debited to the payables account (2 marks)
ACCA F3 (INT) Financial Accounting
20 KAPLAN PUBLISHING
QUESTION 45
During the year ended 31 March 20X9, Jonathan recorded a sales return of
$686 in the sales
returns day book as $868. Control accounts are maintained as integral part of
double entry
by the business.
What is the journal entry required to correct this error?
Debit Credit
A Sales ledger control $182 Sales returns $182
B Sales returns $182 Sales ledger control $182
C Suspense $182 Sales returns $182
D Sales returns $182 Suspense $182 (2 marks)
QUESTION 46
The following information relates to a business for the year ended 31 March
20X9:
Purchases $170,000
Opening inventory $20,000
Closing inventory $18,000
Sales returns $4,000
Purchase returns $3,500
Carriage inwards $600
Carriage outwards $200
Goods withdrawn by the owner $700
What is the cost of sales for the business for the year ended 31 March 20X9?
A $169,100
B $168,000
C $168,400
D $170,400 (2 marks)
Revision Mock Questions
KAPLAN PUBLISHING 21
QUESTION 47
Which of the following is correct?
A A debit entry increases assets
A debit entry increases drawings
A credit entry decreases profit
B A credit entry decreases liabilities
A credit entry increases capital
A credit entry increases profit
C A credit entry decreases assets
A debit entry increases drawings
A debit entry increases profit
D A credit entry increases liabilities
A credit entry increases capital
A credit entry increases profit (2 marks)
QUESTION 48
Which of the following lists comprises the qualitative characteristics that
financial
information should possess according to the IASB's Framework for the
Preparation and
Presentation of Financial Statements?
A Relevance, reliability, comparability, understandability
B Relevance, reliability, prudence, understandability (1 mark)
QUESTION 49
Andrew’s business is renting premises at a cost of $24,000 per annum.
However, on 1 July
20X9 the landlord increased the rent by 10%. At 1 January 20X9 Andrew had
a prepaid
expense of $750 in respect of rent, and during the year ended 31 December
20X6 Andrew
had paid a total of $25,700 to his landlord.
What amounts will appear in the statement of comprehensive income (SOCI)
for the year
ended 31 December 20X9, and in the statement of financial position (SOFP)
as at
31 December 20X9 in respect of rent?
(SOCI) (SOFP)
A $25,200 $1,250 accrual
B $25,200 $1,250 prepayment
C $25,700 $1,250 prepayment
D $24,850 $750 prepayment (2 marks)
ACCA F3 (INT) Financial Accounting
22 KAPLAN PUBLISHING
QUESTION 50
At 30 April 20X9, Phoenix, a limited liability company, was being sued by an
ex-employee for
wrongful dismissal. Phoenix has been advised that the claim is 95% likely to
succeed, and
that damages of $200,000 will be payable if the claim does succeed.
How should this matter be treated in the financial statements of Phoenix for
the year ended
30 April 20X9?
A The matter should be ignored
B The matter should be disclosed by note
C A provision should be made for $190,000
D A provision should be made for $200,000 (2 marks)

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