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Which of the Following is Not an Asset Account
Chapter 22: MULTIPLE CHOICE QUESTIONS
Affiliate 2: Statement of fiscal position and income argument
| (one) | Which of the following is the accounting equation |
AAssets – Liabilities – Capital = Drawings + Profit
BAssets = Liabilities – Capital + Profit – Drawings
CAssets – Liabilities – Majuscule = Turn a profit – Drawings
DAssets + Liabilities = Capital letter + Turn a profit – Drawings
| (2) | Which of the following statements is true? |
AThe income statement illustrates a business’ financial position.
BThe income statement includes dividends paid
CThe income argument illustrates the business’ financial functioning
DThe income statement has to prove the results for one year
| (3) | What is included in the statement of financial position of a business? |
ACapital, drawings, avails and liabilities
BMajuscule, dividends paid, sales and assets
CAvails, liabilities, profit on disposals of non-current avails and introduced capital
DDividends paid, assets, discounts and liabilities
| (4) | Which of the following is incorrect? |
AThe statement of financial position and income statement form part of the financial statements of a business
BThe argument of fiscal position illustrates the accounting equation
CThe income statement illustrates the accounting equation
DThe statement of fiscal position and income statement illustrate the financial position and performance of the business
| (v) | Which argument is not true? |
AInventory is shown on the income argument and in the statement of financial position
BExpenses should exist included on the income statement
CInventory should exist included on the statement of fiscal position only
DReceivables are included in electric current avails on the argument of financial position
Chapter 3: Double entry bookkeeping
| (6) | Which of the following is right? |
| (7) | A credit balance on a ledger business relationship indicates: |
Aan asset or an expense
Ba liability or an expense
Can corporeality owing to the organisation
Da liability or revenue
| (8) | The double entry system of accounting normally results in which of the post-obit balances on the ledger accounts? |
| (9) | The main aim of accounting is to: |
Amaintain ledger accounts for every asset and liability
Bprovide financial information to users of such information
Cproduce a trial rest
Drecord every fiscal transaction individually
| (10) | A Debit entry could pb to: |
Aan increase in assets or a decrease in expenses
Ban increment in sales or an increase in liabilities
Ca decrease in sales or a subtract in assets
Da decrease in liabilities or an increase in expenses
| (eleven) | A credit entry could lead to: |
Aan increment in assets or increase in liabilities
Ban increment in expense or an increase in share capital letter
Can increase in liabilities or an increase in share uppercase
Dan increase in liabilities and a decrease in sales
Chapter 4: Inventory
| (12) | Tracey’southward business organization sells three products – A, B and C. The following data was available at the yr-end: |
The value of inventory at the year-end should be:
A$675
B$670
C$795
D$550
| (13) | An inventory record card shows the post-obit details: |
What is the value of inventory at 31 Jan using the FIFO method?
A$ane,125
B$725
C$975
D$1,000
| (14) | What would exist the effect on a business’ profit, which has been calculated including inventory at toll, of discovering that one of its inventory items which price $7,500 has a net realisable value of $8,500? |
Aan increase of $eight,500
Ban increase of $1,000
Cno result at all
Da decrease of $1,000
| (15) | Co-ordinate to IAS 2 Inventories, which of the following costs should be included in valuing the inventories of a manufacturing company? |
(1)Carriage outwards
(2)Depreciation of mill institute
(3)Wagon inward
(4)General administrative overheads
AAll four items
Bi, 3 and 4 only
C1 and 2 only
D2 and 3 but
| (16) | The closing inventory of X amounted to $116,400 excluding the following ii inventory lines: |
- 400 items which had price $4 each. All were sold subsequently the statement of financial position engagement for $3 each, with selling expenses of $200 for the batch.
- 200 different items which had cost $30 each. These items were found to be defective at the statement of financial position date. Rectification work afterward the argument of financial position amounted to $1,200, afterwards which they were sold for $35 each, with selling expenses totalling $300.
Which of the following total figures should appear in the statement of financial position of X for inventory?
A$122,300
B$121,900
C$122,900
D$123,300
Chapter v: Sales tax
| (17) | All the sales of Gail, a retailer, were made at a price inclusive of sales revenue enhancement at the standard charge per unit of 17.5% and all purchases and expenses diameter sales tax at the standard rate. For the iii months concluded 31 March 2005 gross sales were $23,500, purchases were $12,000 (net) and expenses $800 (net). |
How much is due to the revenue enhancement authority for the quarter?
A$1,260
B$ane,400
C$1,594
D$1,873
| (18) | The sales business relationship is: |
Acredited with the total of sales made, including sales tax
Bcredited with the total of sales fabricated, excluding sales tax
Cdebited with the total of sales made, including sales tax
Ddebited with the total of sales made, excluding sales tax
| (19) | If sales (including sales tax) amounted to $27,612.fifty and purchases (excluding sales taxation) amounted to $eighteen,000, the residue on the sales tax account, assuming all items are subject area to sales tax at 17.5%, would be: |
A$962.fifty debit
B$962.50 credit
C$i,682.10 debit
D$i,682.10 credit
| (20) | A business commenced with capital in cash of $1,000. Inventory costing $800 net of sales taxation at 17.5% is purchased on credit. Half of this inventory is so sold for $1,000 plus sales revenue enhancement, the client paying promptly in cash. |
The accounting equation after these transactions would testify:
Aassets $1,775 less liabilities $175 equals capital $i,600
Bassets $two,775 less liabilities $975 equals capital $1,200
Cavails $ii,575 less liabilities $800 equals capital letter $1,775
Dassets $2,575 less liabilities $975 equals capital $1,600
Chapter 6: Accruals and prepayments
| (21) | The electricity account for the year concluded xxx April 2005 was equally follows: |
Which of the post-obit is the appropriate entry for electricity?
| (22) | The yr terminate of Lansdown is 31 December. The company pays for its electricity by a continuing club of $100 per month. On 1 January 2005 the statement from the electricity supplier showed that the company had overpaid by $25. Lansdown received electricity bills for the four quarters starting on one January 2005 and ending on 31 Dec 2005 for $350, $375, $275 and $300 respectively. |
Which of the following is the correct entry forelectricity in Lansdown’s income argument and statement of financialposition for the year ending 31 Dec 2005?
| (23) | At one January 2005, Michael had a prepayment of $200 in respect of rent. He paid $ane,200 on 1 March 2005 in respect of the twelvemonth ended 28 February 2006 |
What is the charge to the income statement in respect of rent for the year ended 31 December 2005?
A
$ane,400
B
$1,200
C
$1,100
D
$i,300
| (24) | At 31 December 2003, Tony had accrued $240 in respect of lite and heat for the quarter ending 31 Dec 2003. In Jan 2004 he discovered that he had under-accrued by $10. |
The bills for the next four quarters were as follows (q.e. = quarter ended):
Tony always accrues for expenses based on the concluding beak.
What is the charge to the income statement in respect of low-cal and rut for the 15-calendar month flow ended 31 March 2005?
A
$one,160
B
$one,150
C
$930
D
$920
| (25) | Stationery paid for during the twelvemonth amounted to $1,350. At the start of the year there was an inventory of stationery on hand of $165 and an outstanding jotter invoice for $lxxx. At the cease of the twelvemonth there was an inventory of stationery on hand of $140 and an outstanding stationery invoice for $seventy. |
The stationery figure to be shown in the income statement for the yr is:
A
$1,195
B
$1,335
C
$ane,365
D
$1,505
Chapter 7: Irrecoverable debts and allowances for receivables
| (26) | At 30 April 2005, Gareth has a receivables balance of $fifty,000 and an assart for receivables of $800. Post-obit a review of receivables, Gareth wishes to write off an irrecoverable debt of $1,000 and suit his allowance to 5% of receivables. |
What will exist the adjusted balance of the allowance for receivables?
A
$1,650
B
$two,450
C
$2,500
D
$3,450
| (27) | Equally at 31 March, Phil had receivables of $82,500. Following a review of receivables, Phil has decided to write off the following irrecoverable debts: |
Phil would like to provide confronting a specific debt of $250 andbased on past experience, make a general allowance at 2% of receivables.The current residuum on the assart for receivables account is $2,000.Phil too received $300 from a debt that had been previously beenwritten off.
What is the charge to the income statement in respectof irrecoverable debt expense and the entry on the argument offinancial position for cyberspace receivables at 31 March?
| (28) | At the start of the year Joe had an assart of $700 against receivables. During the yr $450 of this corporeality went bad and $150 was received; the balance remained unpaid at the year terminate. Some other corporeality of $170 went bad. At the year-end information technology was decided to provide for a new debt of $240. |
What was the total irrecoverable debt expense for the yr?
A
$170
B
$260
C
$410
D$710
| (29) | Doris currently has a receivables balance of $47,800 and an assart for receivables of $one,250. She has received $150 in respect of half of a debt that she had provided confronting. She now believes the other half of the debt to be bad and wishes to write it off. She also wishes to maintain her allowance at ii% receivables. |
What is the total charge to the income statement in respect of these items?
A
$150 debit
B
$150 credit
C
$300 debit
D
$300 credit
| (xxx) | At the year finish, Harold has a receivables balance of $100,000 and an allowance for receivables of $5,000. He has not withal accounted for a receipt of $500 in respect of a debt which he had previously provided against or a receipt of $1,000 in respect of a debt which had been written off in the previous year. Harold wishes to maintain his assart for receivables at 7% of receivables. |
What balances will exist shown in hisstatement of financial position at the year-end for receivables and theallowance for receivables?
| (31) | James has been advised that ane of his customers has ceased trading and that it is almost sure that he will non recover the residue of $720 owed by this customer. |
What entry should James make in his general ledger?
| (32) | Gordon’due south receivables owe a full of $fourscore,000 at the twelvemonth terminate. These include $900 of long-overdue debts that might nonetheless be recoverable, but for which Gordon has created an assart for receivables. Gordon has also provided an allowance of $one,582, which is the equivalent of two% of the other receivables’ balances. |
What best describes Gordon’s allowance for receivables as at his twelvemonth end?
A
a specific allowance of $900 and an additional allowance of $one,582 based on past history
B
a specific allowance of $ane,582 and an additional assart of $900 based on past history
C
a specific allowance of $ii,482
D
a general assart of $two,482
Chapter 8: Noncurrent assets
| (33) | At ane January 2005, Mary has motor vehicles which cost $15,000. On 31 August 2005 she sells a motor vehicle for $5,000 which had originally cost $8,000 and which had a NBV of $4,000 at the date of disposal. She purchased a new motor vehicle which price $x,000 on thirty November 2005. |
Her policy is to depreciate motor vehicles at arate of 25% pa on the straight-line footing, based on the number ofmonths’ ownership.
What is the depreciation charge for the year ended 31 December 2005?
A
$three,750
B
$3,291
C
$4,250
D
$3,500
| (34) | Which of the following best explains what is meant past ‘uppercase expenditure’? |
Aexpenditure on non-electric current avails, including repairs and maintenance
Bexpenditure on expensive assets
Cexpenditure relating to the result of share capital
Dexpenditure relating to the conquering or improvement of noncurrent assets
| (35) | A non-current asset was purchased at the beginning of Year 1 for $2,400 and depreciated by 20% pa past the reducing-residual method. At the beginning of Twelvemonth 4 information technology was sold for $1,200. |
The result of this was:
A
a loss on disposal of $240.00
B
a loss on disposal of $28.80
C
a profit on disposal of $28.80
D
a profit on disposal of $240.00
| (36) | Giles bought a new machine from away. The machine cost $100,000 and delivery and installation costs were $7,000. Testing it amounted to $5,000. Training employees on how to use the automobile price of $1,000. |
What should exist the cost of the machine in the company’s statement of financial position?
A
$100,000
B
$107,000
C
$112,000
D
$113,000
| (37) | Joseph’due south mechanism price account showed a residuum of $5,000 at 1 Jan 2005. During the year he had the following transactions: |
Joseph depreciates machines at a charge per unit of 10% pa on the direct-line footing based on the number of months’ ownership.
What is the depreciation accuse in respect of machinery for the year concluded 31 December 2005?
A
$545
B
$540
C
$510
D
$630
| (38) | B acquired a lorry on i May 20X0 at a price of $xxx,000. The lorry has an estimated useful life of 4 years, and an estimated resale value at the end of that fourth dimension of $vi,000. B charges depreciation on the straight-line basis, with a proportionate charge in the period of acquisition. |
What will the depreciation charge for the lorry be in B’s x-month accounting period to 30 September 20X0?
A
$3,000
B
$2,500
C
$2,000
D
$5,000
Chapter 9: From trial balance to financial statements
The post-obit is the extract of Jessie’s trial balance as at 31 December 2005:
The following notes are provided:
(i)
Buildings are depreciated at 2% pa on a straight-line ground.
(ii)
Plant and mechanism is depreciated at 25% pa on a reducing residual basis.
(iii)Boosted irrecoverabledebts of $iii,200 were discovered at the year stop. Information technology has been decided tomake an allowance for receivables of 5% on the adjusted receivables atthe year finish.
(iv)The monthly rental accuse is $3,000.
(v)The insurance accuse for the year is $24,000.
Using the above data endeavour the following questions.
| (39) | The depreciation charge for buildings for the year and the net volume value (NBV) at the yr-stop will exist: |
| (40) | The depreciation charge for plant and mechanism for the twelvemonth and the NBV at the year-end will be: |
| (41) | The total irrecoverable debt expense for the year and the closing net receivable residue volition be: |
| (42) | What is the charge for hire and insurance for the twelvemonth and the endmost accrual and prepayment? |
Affiliate x: Books of prime entry and control accounts
| (43) | Which of the following is not the purpose of a receivables ledger control business relationship? |
A
A receivables ledger control business relationship provides a cheque on the arithmetic accuracy of the personal ledger
B
A receivables ledger control account helps to locate errors in the trial balance
C
A receivables ledger control account ensures that there are no errors in the personal ledger
D
Control accounts deter fraud
| (44) | Which one of the following is a book of prime number entry and role of the double-entry system? |
A
the journal
B
the little cash book
C
the sales solar day book
D
the purchase ledger
| (45) | On 1 January 2005 the balance of receivables was $22,000. Summate the closing receivables after taking the following into consideration: |
A
$30,000
B
$23,000
C
$12,000
D
$28,000
Chapter 11: Control business relationship reconciliations
| (46) | A receivables ledger control account had a endmost balance of $viii,500. It contained a contra to the purchase ledger of $400, only this had been entered on the wrong side of the control account. |
The right remainder on the control account should be:
A
$7,700 debit
B
$8,100 debit
C
$eight,400 debit
D
$8,900 debit
| (47) | The receivables ledger control account at 1 May had balances of $32,750 debit and $1,275 credit. During May sales of $125,000 were fabricated on credit. Receipts from receivables amounted to $122,500 and greenbacks discounts of $550 were allowed. Refunds of $1,300 were fabricated to customers. The closing credit rest is $2,000. |
The closing debit balances at 31 May should be:
A
$35,175
B
$35,675
C
$36,725
D
$34,725
| (48) | A supplier sends you a statement showing a balance outstanding of $fourteen,350. Your own records show a balance outstanding of $14,500. |
The reason for this departure could be that:
A
The supplier sent an invoice for $150 which you have not yet received
B
The supplier has immune you $150 cash discount which you had omitted to enter in your ledgers
C
You have paid the supplier $150 which he has not nevertheless deemed for
D
Yous have returned goods worth $150 which the supplier has not yet accounted for
| (49) | A credit residuum of $917 brought frontward on Y’s business relationship in the books of X means that: |
A
X owes Y $917
B
Y owes X $917
C
Ten has paid Y $917
D
10 is owed $917 by Y
| (50) | In a receivables ledger command account, which of the following lists is composed only of items which would appear on the credit side of the account? |
A
Greenbacks received fromcustomers, sales returns, irrecoverable debts written off, contrasagainst amounts due to suppliers in the accounts payable ledger
B
Sales, cash refunds to customers, irrecoverable debts written off, discounts immune
C
Cash received from customers, discounts allowed, involvement charged on overdue accounts, irrecoverable debts written off
D
Sales, cash refunds tocustomers, interest charged on overdue accounts, contras against amountsdue to suppliers in the accounts payable ledger
Affiliate 12: Bank reconciliations
| (51) | The following information relates to a banking concern reconciliation. |
(i)The depository financial institution balance in the cash book before taking the items below into account was $5,670 overdrawn.
(two)Banking company charges of $250 on the banking company argument have non been entered in the greenbacks volume.
(three)The bank has credited the business relationship in error with $40 which belongs to some other customer.
(iv)Cheque payments totalling $325 have been correctly entered in the cash book only accept not been presented for payment.
(v)Cheques totalling $545 have been correctly entered on the debit side of the cash book but accept not been paid in at the bank.
What was the remainder as shown past the bank statement earlier taking the items to a higher place into business relationship?
A
$5,670 overdrawn
B
$five,600 overdrawn
C
$5,740 overdrawn
D
$half dozen,100 overdrawn
| (52) | At 31 August 2005 the balance on the company’s cash book was $iii,600 credit. Exam of the bank statements revealed the following: |
- Standing orders amounting to $180 had not been recorded in the cash book.
- Cheques paid to suppliers of $1,420 did non announced on the bank statements.
What was the balance on the bank statement at 31 August 2005?
A
$5,200 overdrawn
B
$5,020 overdrawn
C
$2,360 overdrawn
D
$3,780 overdrawn
| (53) | An organisation’s cash book has an operating balance of $485 credit. The following transactions then took place: |
- cash sales $1,450 including sales tax of $150
- receipts from customers of debts of $two,400
- payments to payables of debts of $1,800 less 5% cash disbelieve
- dishonoured cheques from customers amounting to $250.
The resulting balance in the bank column of the cash book should exist:
A
$i,255 debit
B
$ane,405 debit
C
$one,905 credit
D
$2,375 credit
| (54) | The greenbacks volume shows a bank balance of $5,675 overdrawn at 31 March 2005. It is subsequently discovered that a standing order for $125 has been entered twice and that a dishonoured cheque for $450 has been debited in the cash volume instead of credited. |
The correct bank residue should exist:
A
$5,100 overdrawn
B
$6,000 overdrawn
C
$6,250 overdrawn
D
$vi,450 overdrawn
| (55) | The try below at a bank reconciliation statement has been prepared by Q Limited. Assuming the banking concern argument balance of $38,600 to be correct, what should the cash book remainder be? |
A
$76,500 overdrawn, as stated
B
$5,900 overdrawn
C
$700 overdrawn
D
$v,900 cash at banking company
| (56) | Afterward checking a business organization cash volume confronting the banking concern statement, which of the following items could crave an entry in the cash book? |
(1)Depository financial institution charges
(two)A cheque from a customer which was dishonoured
(three)Cheque not presented
(four)Deposits not credited
(5)Credit transfer entered in bank statement
(half-dozen)Standing social club entered in bank statement.
A
i, 2, 5 and 6
B
iii and iv
C
1, three, 4 and 6
D
3, 4, 5 and 6
Affiliate 13: Correction of errors and suspense accounts
| (57) | Faulty goods costing $210 were returned to a supplier merely this was recorded as $120 in the ledger accounts. |
What is the journal entry necessary to correct the error?
| (58) | A suspense account was opened when a trial balance failed to agree. The following errors were later discovered: |
- a gas beak of $420 had been recorded in the gas account equally $240
- discount of $l given to a client had been credited to discounts received
- interest received of $70 had been entered in the depository financial institution business relationship only.
The original balance on the suspense account was:
A
debit $210
B
credit $210
C
debit $160
D
credit $160
| (59) | Molly starts up in business as a florist on 1 April 2004. For the outset six months, she has a draft profit of $12,355. |
On investigation you discover the post-obit:
- Rent paid for the 12 months ending 31 March 2005 of $800 has non been recorded in the accounts.
- Closing inventory in the accounts at a cost of $i,000 has a cyberspace realisable value of $800.
What is the adjusted profit for the flow?
A
$eleven,355
B
$11,755
C
$12,155
D
$12,555
| (60) | In an accounting arrangement where individual receivables and payables ledger accounts are maintained every bit an integral office of the double entry, which of the post-obit errors will non be identified by a trial balance? |
A
overcasting of the sales day volume
B
undercasting of the analysed cash book
C
failure to transfer a non-current nugget to the disposal business relationship when sold
D
transposition error in an individual receivables account
| (61) | A trial residue has been extracted and a suspense account opened. One error relates to the misposting of an amount of $400, being discount received from suppliers, which was posted to the incorrect side of the disbelieve received account |
What is the correcting periodical entry?
| (62) | A company, Y, purchased some establish on 1 January 20X0 for $38,000. The payment for the found was correctly entered in the cash volume only was entered on the debit side of plant repairs account. |
Y charges depreciation on the direct-linebasis at xx% pa, with a proportionate accuse in the year of acquisitionand assuming no scrap value at the end of the life of the asset.
How will Y’due south profit for the twelvemonth ended 31 March 20X0 exist affected by the error?
A
Understated by $30,400
B
Understated by $36,100
C
Understated past $38,000
D
Overstated past $1,900
| (63) | The trial balance of Z failed to concur, the totals being: |
A suspense account was opened for the corporeality of the difference and the following errors were found and corrected:
(i)The totals of the cashdiscount columns in the cash volume had non been posted to the discountaccounts. The figures were discount immune $3,900 and discount received$five,100.
(ii)A cheque for $xix,000received from a customer was correctly entered in the cash book but wasposted to the customer’due south business relationship every bit $9,100.
What will the remaining balance on the suspense account be after the correction of these errors?
A
$25,300 credit
B
$7,700 credit
C
$27,700 credit
D
$v,400 credit
| (64) | The trial residual of C did not agree, and a suspense account was opened for the difference. Checking in the accounting organization revealed a number of errors. |
(1)$4,600 paid for motor van repairs was correctly treated in the cash book but was credited to motor vehicles nugget account.
(2)$360 received from B, a client, was credited in error to the account of BB.
(3)$9,500 paid for rent was debited to the hire account every bit $5,900.
(four)The total of the disbelieve immune column in the cash volume had been debited in error to the discounts received account.
(5)No entries had been made to tape a greenbacks auction of $100.
Which of the errors above would require an entry to the suspense account every bit part of the procedure of correcting them?
A
iii and 4
B
ane and three
C
ii and 5
D
2 and 3
Chapter 14: Incomplete records
| (65) | Ashley started a business concern on 1 January 2005. He caused the following avails: |
He likewise opened a business depository financial institution business relationship and paid in $4,000. At the end of the first year of trading, he had the following:
He had drawn $1,000 in greenbacks during the menstruation.
What was Ashley’south profit or loss for the year?
A
$140 loss
B
$140 profit
C
$one,860 loss
D
$1,860 profit
| (66) | George started a business by investing $10,000 into a business bank account. At the stop of his first year’s trading he had earned a profit of $5,000 and had the following assets and liabilities: |
During the twelvemonth he had withdrawn $two,000 from the business concern.
How much further majuscule had he introduced in the twelvemonth?
A
$twenty,000
B
$24,000
C
$10,000
D
$14,000
| (67) | If Harry’s mark-up on cost of sales is 15%, what is his gross profit margin? |
A
12.5%
B
13.04%
C
fifteen%
D
17.65%
| (68) | A sole trader had opening majuscule of $10,000 and endmost upper-case letter of $iv,500. During the menstruum the owner introduced capital of $4,000 and withdrew $8,000 for her own use. |
Her profit or loss during the catamenia was:
A
$9,500 loss
B
$1,500 loss
C
$7,500 profit
D
$17,500 profit
| (69) | From the post-obit information, summate the value of purchases: |
A
$302,600
B
$506,400
C
$523,200
D
$578,200
| (70) | Ballad owns a shop. The just information available for the twelvemonth concluded 31 December 2005 is as follows: |
What were the purchases of the shop for the year?
A
$eleven,450
B
$12,750
C
$14,900
D
$x,600
| (71) | The post-obit information is relevant to the calculation of the sales figure for Blastoff, a sole trader who does not keep proper accounting records: |
The effigy which should appear in Alpha’s income statement for sales is:
A
$525,300
B
$511,700
C
$529,500
D
$510,900
| (72) | A sole trader who does not keep total bookkeeping records wishes to calculate her sales acquirement for the year. |
The information available is:
Which of the post-obit is the sales acquirement figure for the year calculated from these figures?
A
$117,600
B
$108,000
C
$210,000
D
$140,000
| (73) | A business compiling its accounts for the year to 31 January each year pays rent quarterly in advance on i January, ane April, one July and 1 Oct each year. Later on remaining unchanged for some years, the rent was increased from $24,000 per year to $30,000 per year equally from i July 20X0. |
Which of the following figures is the rentexpense which should appear in the income argument for the year ended31 January 20X1?
A
$27,500
B
$29,500
C
$28,000
D
$29,000
| (74) | On 31 Dec 20X0 the inventory of V was completely destroyed past fire. The post-obit information is available: |
(1)Inventory at 1 December 20X0 at cost $28,400.
(ii)Purchases for December 20X0 $49,600.
(3)Sales for December 20X0 $64,800.
(4)Standard gross profit percentage on sales acquirement 30%.
Based on this information, which of the following is the amount of inventory destroyed?
A
$45,360
B
$32,640
C
$40,971
D
$19,440
Chapter xv: Company accounts
| (75) | Geese’south trial balance shows an overprovision in respect of income tax for the year ended 31 Dec 2004 of $five,000. Geese estimates that tax liability in respect of the year concluded 31 December 2005 will be $23,000. |
What is the tax accuse in Geese’s incomestatement and the statement of financial position entry for the yearended 31 December 2005?
| (76) | The correct periodical entry to tape the outcome of 100,000 50c shares (fully paid) at an effect price of $ii.50 a share is: |
| (77) | A company has the post-obit share capital letter: |
In addition to providing for the year’s preference dividend, an ordinary dividend of 2c per share is to be paid.
What are total dividends for the year?
A
$140,000
B
$380,000
C
$440,000
D
$760,000
| (78) | Acquirement reserves are: |
A
accumulated and undistributed profits of a company
B
amounts which cannot be distributed every bit dividends
C
amounts set aside out of profits to replace revenue items
D
amounts set up aside out of profits for a specific purpose
| (79) | On 1 Apr 2004 the rest on B’s accumulated profit account was $l,000 credit. The residual on 31 March 2005 was $100,000 credit. On 10 March 2005 dividends of $fifty,000 were declared in respect of the year ended 31 March 2005, payable on 31 May 2005. |
Based on this information, profit after taxation (but earlier dividends) for the year ended 31 March 2005 was:
A
Aught
B
$fifty,000
C
$100,000
D
$150,000
Chapter xvi: Accounting standards
| (80) | Jackson’s yr end is 31 December 2005. In February 2006 a major credit customer went into liquidation and the directors believe that they will not be able to recover the $450,000 owed to them. |
How should this item be treated in the financial statements of Jackson for the year concluded 31 December 2005?
A
The irrecoverable debt should exist disclosed past annotation
B
The financial statements are non affected
C
The debt should be provided against
D
The fiscal statements should exist adjusted to reverberate the irrecoverable debt
| (81) | A one-time employee is challenge compensation of $50,000 from Harriot, a express liability visitor. The company’s solicitors have stated that they believe that the claim is unlikely to succeed. The legal costs relating to the claim are likely to be in the region of $v,000 and will be incurred regardless of whether or not the merits is successful. |
How should these items be treated in the financial statements of Harriot Ltd?
A
Provision should be made for $55,000
B
Provision should exist made for $50,000 and the legal costs should exist disclosed by note
C
Provision should be made for $5,000 and the compensation of $50,000 should exist disclosed by note
D
No provisions should be fabricated only both items should be disclosed by annotation
| (82) | Cowper has spent $xx,000 researching new cleaning chemicals in the year concluded 31 December 2005. It has also spent $twoscore,000 developing a new cleaning production which will non become into commercial production until next twelvemonth. The development projection meets the criteria laid down in IAS 38. |
How should these costs be treated in the financial statements of Cowper for the year concluded 31 December 2005?
A
$lx,000 should be capitalised as an intangible asset on the statement of financial position
B
$40,000 should becapitalised as an intangible asset and should be amortised; $20,000should exist written off to the income statement
C
$xl,000 should becapitalised equally an intangible asset and should not be amortised; $xx,000should be written off to the income argument
D
$60,000 should be written off to the income statement
| (83) | The directors of ABC estimated that inventory which had toll $l,000 had a cyberspace realisable value of $twoscore,000 at 30 June 2005 and recorded it in the financial statements for the year concluded thirty June 2005 at this lower value in accordance with IAS 2. They have since constitute out that the net realisable value of the inventory is only likely to exist $30,000. |
What adjustments, if whatsoever, should be made in the financial statements in respect of this inventory?
A
No adjustments required
B
Increase the value of inventory by $10,000
C
Decrease the value of inventory by $ten,000
D
Decrease the value of inventory by $20,000
| (84) | Which of the following items are not-adjusting items per IAS 10? |
(a)the upshot of new share or loan capital letter
(b)financial consequences of losses of non-electric current assets or inventory as a issue of fires or floods
(c)information regarding the value of inventory sold at less than cost thus resulting in a reduction in the value of inventory
(d)mergers and acquisitions
(e)bankruptcy of a credit customer.
A
(a), (b) and (d)
B
(c) and (e)
C
(a), (d) and (e)
D
(b), (c) and (e)
| (85) | Which of the following correctly describes how inquiry and development expenditure should be treated in accord with IAS 38? |
A
Research and development expenditure must be written off to the income statement as incurred
B
Enquiry and development expenditure should be capitalised every bit an intangible asset on the statement of financial position
C
Research expenditureshould be written off to the income statement; development expendituremust exist capitalised as an intangible nugget provided that certaincriteria are met
D
Research expenditureshould be capitalised as an intangible asset provided that certaincriteria are met; development expenditure should be written off to theincome argument
| (86) | Who bug International Fiscal Reporting Standards? |
A
The Auditing Practices Lath
B
The Stock Exchange
C
The International Accounting Standards Board
D
The authorities
| (87) | Which of the post-obit statements concerning the bookkeeping treatment of inquiry and development expenditure are true, according to IAS 38 Intangible Avails? |
(one)If certain criteria are met, research expenditure may be recognised as an asset.
(2)Research expenditure, other than uppercase expenditure on research facilities, should be recognised as an expense as incurred.
(3)In deciding whetherdevelopment expenditure qualifies to be recognised as an asset, it isnecessary to consider whether there volition be adequate finance availableto complete the project.
(four)Evolution expenditure recognised equally an asset must be amortised over a period non exceeding five years.
(five)The financial statementsshould disclose the total amount of research and development expenditurerecognised as an expense during the period.
A
ane, 4 and 5
B
2, 4 and five
C
2, 3 and 4
D
2, 3 and 5
| (88) | IAS10 Events after the reporting menses regulates the extent to which events later the reporting menstruation engagement should exist reflected in financial statements. |
Which of the post-obit lists of such eventsconsists but of items that, according to IAS10 should unremarkably beclassified as non-adjusting?
A
Insolvency of a debtorwhose account receivable was outstanding at the statement of financialposition engagement, issue of shares or loan notes, a major merger withanother company
B
Consequence of shares or loan notes, changes in strange substitution rates, major purchases of non-electric current avails
C
A major merger withanother visitor, destruction of a major non-current asset by fire,discovery of fraud or error which shows that the fiscal statementswere wrong
D
Sale of inventory givingevidence about its value at the statement of financial position engagement,issue of shares or loan notes, devastation of a major non-current assetby fire
Chapter 17: Statement of cash flows
| (89) | In the year ended 31 December 2005, Lamb bought new vehicles from Warwick Motors with a listing price of $100,000 for $70,000 cash and an allowance against old motor vehicles of $30,000. The value of the vehicles taken in part exchange was $27,000. |
Lamb sold other vehicles with a net volume value of $12,000 for $xv,000 greenbacks.
In Lamb’south argument of cash menstruation for the yearended 31 December 2005, how would the higher up transactions exist presentedunder the heading ‘Investing activities’?
| (90) | Baldrick has the following balances in its statement of financial position as at 30 June 2004 and xxx June 2005: |
In the year concluded 30 June 2005 tax of $550 was paid. The additional loan notes were issued on thirty June 2005.
What is the operating turn a profit of Baldrick for the year ended 30 June 2005?
A
$27,250
B
$26,450
C
$28,050
D
$27,100
| (91) | At 31 Dec 2004, Topaz had provided $50,000 in respect of income tax. At 31 Dec 2005, the company estimated that its income tax bill in respect of the year would be $57,000. The amount charged in the income statement for the year ended 31 Dec 2005 in respect of income tax was $60,000. |
How much will announced in the statement of cash flows for the year ended 31 December 2005 in respect of income tax?
A
$50,000
B
$53,000
C
$57,000
D
$60,000
| (92) | Evans had the following balances in its statement of financial positions every bit at thirty June 2004 and 2005: |
How much volition appear in the greenbacks flow statement for the year concluded 30 June 2005 under the heading of ‘Financing activities’?
A
$nil
B
$10,000 inflow
C
$30,000 inflow
D
$40,000 inflow
The following data relates to Questions 93 and 94.
Scents had the post-obit balances in its statement of financial positions every bit at 30 September 2004 and 2005:
| (93) | How much will appear in the statement of cash flows for the year ended 30 September 2005 for the loan interest and preference dividend paid? |
A
$10,000
B
$12,000
C
$sixteen,000
D
$32,000
| (94) | How much will appear in the statement of cash flows for the year concluded 30 September 2005 for the ordinary dividend paid? |
A
$xx,000
B
$24,000
C
$25,000
D
$29,000
| (95) | IAS seven Statement of greenbacks flows requires the statement of cash flows prepared using the indirect method to include the adding of net cash from operating activities. |
Which of the following lists consists only of items which could announced in such a calculation?
A
Depreciation, increase in receivables, subtract in payables, proceeds of auction of plant
B
Increase in payables, decrease in inventories, turn a profit on sale of plant, depreciation
C
Increase in payables, depreciation, decrease in receivables, proceeds of sale of found
D
Depreciation, interest paid, equity dividends paid, purchase of plant
Affiliate 18: Consolidated statement of financial position
| (96) | At the 1 Jan 20X2 Y acquired 75% of the share upper-case letter of Z for $400,000. At that date the share capital of Z consisted of 600,000 ordinary shares of 50c each and its reserves were $50,000. |
The fair value of NCI at the date of acquisition was $100,000.
In the consolidated statement of financialposition of Y and its subsidiary Z at 31 December 20X6, what amountshould appear for goodwill?
A
$150,000
B
$137,500
C
$55,000
D
$110,000
| (97) | Skinny acquired 75% of the share capital Coltart for $35,000 on the ane January 20X4. Details of the share capital and reserves of Skinny and Coltart at 31 December 20X6 are every bit follows: |
At the engagement of conquering Coltart had reserves of $ten,000.
What figure should appear in the consolidatedstatement of fiscal position of Skinny and its subsidiary Coltart forreserves as at 31 December 20X6?
A
$41,250
B
$42,750
C
$43,250
D
$43,750
| (98) | Austen acquired sixty% of the share upper-case letter of Dicken for $300,000 on ane January 20X5. Details of the share capital and reserves of Austen and Dickens at 31 December 20X6 are as follows: |
At the date of acquisition Dickens had reserves of $lx,000. The off-white value of NCI at conquering was $80,000.
What figure should announced in the consolidatedstatement of financial position of Austen and its subsidiary Dickens forreserves as at 31 December 20X6?
A
$180,200
B
$209,000
C
$290,200
D
$110,000
| (99) | At the ane January 20X5 Purves caused 80% of the share capital of Trollope for $100,000. At that date the share capital of Trollope consisted of 50,000 $i shares and reserves of $xxx,000. At the 31 Dec 20X6 the reserves of Purves and Trollope were as follows: |
The fair value of NCI at acquisition was $75,000.
What figure should appear in the consolidatedstatement of financial position of Purves and its subsidiary Trollope,for non- controlling interest?
A
$xvi,000
B
$20,000
C
$79,000
D
$lxxx,000
| (100) | At the i Jan 20X3 Y acquired eighty% of the share capital of Z for $750,000. At that date the share capital of Z consisted of 600,000 ordinary shares of $1 each and its reserves were $fifty,000. |
The fair value of non-controlling interest was valued at $150,000.
In the consolidated statement of financialposition of Y and its subsidiary Z at 31 December 20X6, what amountshould appear for goodwill?
A
$250,000
B
$184,000
C
$138,000
D
$92,000
Affiliate xix: Consolidated income argument
| (101) | X owns sixty% of the equity share upper-case letter of Y and 40% of the equity share capital of Z. The income statement of the three entities showed the post-obit turnover for the year ended 31 August 20X7: |
During the year Ten sold goods to Y and Z for $2 million and $1million respectively. All goods were sold on to tertiary parties by Y and Zby the end of the yr.
How much volition be included in the consolidated income statement of the X group for Turnover for the year ended 31 August 20X7?
A
$24m
B
$21m
C
$22m
D
$28m
| (102) | Sat is the sole subsidiary of Shindo. The toll of sales figures for 20X1 for Sat and Shindo were $11 million and $ten million respectively. During 20X1 Shindo sold goods which had cost $ii million to Sat for $3 million. Sat has not yet sold whatever of these goods. |
What is the consolidated price of sales figure for 20X1?
A
$16 million
B
$xviii million
C
$xix million
D
$20 million
| (103) | Crunchy Co acquired 70% of the ordinary share capital of Nut Co six years ago. The following data relates to Nut Co for the year ended xxx June 20X3: |
What is the profit attributable to the not-controlling interest in the consolidated income argument?
A
$33,300
B
$78,750
C
$45,000
D
$77,700
| (104) | Thou Co acquired 60% of the ordinary share capital of Special Co v years ago. The following data relates to Special Co for the year ended xxx September 20X3: |
What is the profit attributable tot the not-decision-making involvement in the consolidated income statement?
A
$108,000
B
$72,000
C
$168,000
D
$77,700
| (105) | P Ltd caused 60% of the ordinary shares of South Ltd several years ago when the reserves of S stood at $980. In the year ended 31 July 20X7 P sold goods to S costing $500 for $600.(20% mark up on cost). At the twelvemonth end half of these appurtenances still remained in inventory. |
What volition be the provision for unrealised profit adjustment for the year ended 31 July 20X7, for the P group?
A
Deduct $500 from the cost of sales
B
Deduct $fifty from the cost of sales
C
Add $l to the price of sales
D
Add $100 to the toll of sales
| (106) | Which of the following statements regarding the method of consolidation is true? |
(1)Subsidiaries are equity accounted
(2)Assembly are consolidated in full
A
Neither argument
B
Statement 1 only
C
Both statements
D
Statement 2 only
| (107) | Which of the following statements rare true? |
(1)An associated undertaking is when a parent has control over the associate
(2)Assembly are equity accounted
(3)Subsidiaries are consolidated in full
(iv)An associate is a non-controlling interest
A
all of the higher up
B
Argument two and 3 only
C
None of the above
D
Statement 1 only
Chapter 20: Interpretation of financial statements
The following information relates to question 108 and 109.
| (108) | What is the render on capital employed for the years 20X5 and 20X6? |
| (109) | What is the total gearing for the years 20X5 and 20X6? |
| (110) | From the post-obit data regarding the year to 31 Baronial 20X6, what is the payables payment menstruum? |
A
41 days
B
48 days
C
54 days
D
57 days
| (111) | From the following information regardinng the year to 31 March 20X6, what are the current and quick ratios? |
| (112) | Sale are $260,000. Purchases are $150,000. Opening inventory is $22,000. Closing inventory is $26,000. |
What is the inventory turnover?
A
six.one times
B
10 times
C
7 times
D
10.8 times
Chapter 21: The regulatory and conceptual framework
| (113) | When preparing financial statements under historic cost accounting in periods of aggrandizement, directors: |
A
must reduce nugget values
B
must increase asset values
C
must reduce dividends
D
need make no adjustments
| (114) | If the owner of a business takes goods from inventory for his own personal utilize, the accounting concept to be considered is the: |
A
relevance concept
B
capitalisation concept
C
coin measurement concept
D
separate entity concept
| (115) | A ‘true and off-white view’ is one which: |
A
presents the accounts in such a manner as to exclude errors which would affect the deportment of those reading them
B
occurs when the accounts have been audited
C
shows the accounts of an organisation in an understandable format
D
shows the avails on the argument of financial position at their current market price
| (116) | Which concept is followed when a business organization records the cost of a non-current asset even though it does non legally own it? |
A
substance over grade
B
prudence
C
accruals
D
going business
| (117) | The IASB Framework for the Preparation and Presentation of Financial Statements gives five characteristics that make financial information reliable. |
These five characteristics are:
A
prudence, consistency, understandability, faithful representation, substance over form
B
accruals footing, going concern concept, consistency, prudence, true and fair view
C
faithful representation, neutrality, substance over course, completeness, consistency, faithful and free
D
gratuitous from material error, prudence, faithful representation, neutrality, completeness
| (118) | The accounting concept or convention which, in times of ascent prices, tends to understate asset values and overstate profits, is the: |
A
going business concern concept
B
prudence concept
C
realisation concept
D
historical cost concept
|
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Which of the Following is Not an Asset Account
Source: https://kfknowledgebank.kaplan.co.uk/acca/chapter-22-multiple-choice-questionsv2
