Exam Title: Financial Accounting: MOCK EXAM 1 Module No.

: BAC4023

STUDENT NAME:……………………..…...

STUDENT NUMBER:………………………

CARDIFF SCHOOL OF MANAGEMENT

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Module Title: MOCK EXAM 1 - Financial & Digital Accounting

Module Number: BAC4023

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Exam Period: Semester 1, 2022/23

Exam Duration: 2 hours (plus 15 minutes reading time)

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INSTRUCTIONS TO CANDIDATES:

1. This is an closed book examination.

2. Non-programmable calculators are allowed.

3. You must write your student name and number in the top right-hand
corner of this front cover page where indicated.

4. Please only answer the first 24 short questions provided on this

MOCK examination paper. Submit all your answers in this single Word
Document.

5. Workings must be shown for numerical questions to gain the mark

allocation. (You should show your workings in the yellow boxes
alongside the questions).

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

QUESTION 1

1- Profit of the year is:

Select one answer.

A The excess of income over expenditure.

B The excess of expenditure over
income.
C The excess of income over expenditure plus the retained profit.
D The excess of income over expenditure minus the previous
loss.

ANSWER:A
(2 marks)
QUESTION 2
A credit balance on the Trial Balance indicates:
Select one answer.

A an asset or an
expense B a capital
C a liability or
revenue D B or C

ANSWER:D
(2 marks)

QUESTION 3
Which of the following is a capital transaction?
Select one answer.

A The purchase of a laptop for resale by an office stationery company

B The cost of annual maintenance of cars used for business
C Re-tiling of the factory roof
D Sale of inventory to an EU country

ANSWER: C
(2 marks)
QUESTION 4
Sales (including sales tax) amounted to £33,000, and purchases (excluding sales tax)
amounted to £20,000. What is the balance on the sales tax account, assuming all items are
subject to sales tax at 20%?
WORKINGS:
Sales tax
DR CR
Input 3333 Output 2500

3333 3333
Bal b/d:833

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Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

ANSWER:833
(2 marks)

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

QUESTIONS 5 AND 6
A company has the following transactions:

1. Started the business with cash in the bank of £3,250

2. Purchased goods of £950 in cash
3. Cash sales of £2,600
4. Paid Wages in cash of £720

QUESTION 5: What would be the balance in the cash at bank account?

WORKINGS:
Cash
Bal b/d: 3250
2600 950
720
2600 2600
Bal c/d 930

ANSWER:930

(2.5 marks)

QUESTION 6: What would be the balance on the Trial Balance at the end of these
transactions (assuming there are no other transactions)?

WORKINGS:

TRIAL BALANCE DR CR

ANSWER:
(2.5 marks)

QUESTION 7
Which of the following is a revenue expense?
Select one answer:

A Cost of extension to the business buildings

B Cost to insure a motor vehicle
C The cost incurred for getting the floor ready for installing a new machine
D Transportation costs incurred for the delivery and setting up of a new machine
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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

ANSWER:D
(2 marks)

QUESTIONS 8 AND 9

Carl Coal, trading as Carl Coal Blocks Ltd, ends his financial year on 31 st March. At 1/4/19
he had goods in stock valued at £4,200. During the year to 31/3/20, he purchased goods
costing £68,000. The government has decided to change the expected quality of coal and
as such Carl has to write off some of his stock as it does not meet the government’s
requirements. Some of the coal goods which cost £1,800 were still held in stock at 31/3/20
however Carl Coal believes that these cannot be sold. All the goods still held in stock at
31/3/20 (including the write off coal stock) had an original purchase cost of £3,800. Sales for
the year were £88,500.

QUESTION 8: What is the adjusted value of closing stock for the year ending 31/12/20 for Carl
Coal Blocks Ltd?

WORKINGS:3800-1800=2000
COGS=op+purchases-closing =4200+68000-3800=

ANSWER: (2 marks)

QUESTION 9:

What is the gross profit for the year ending 31/03/20?

WORKINGS:
£ £
Sales 88500
88500
COGS
Opening 4200

ANSWER: (3 marks)

QUESTION 10

A double entry posting has been completed incorrectly. Terry and Davies Ltd receivable
account has been debited a sale of £2,500 when it should have been debited to Tommy and
Davies Ltd’s receivable account.
How can this error be rectified, with the use of a journal system?

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

ANSWER:

(2 marks)

QUESTION 11n nx

Farah Ltd. has the following transactions:

1- Payment of £200 to J Speed for a cash purchase

2- Payment of £250 to M&R in respect of an invoice for goods purchased last

month Which of the following are the correct ledger entries to record these

transactions?

A Dr Cash £450
Cr Purchases £450
B Dr Purchases £450
Cr Cash £450
C Dr Cash £450
Cr Trade payables £250
Cr Purchases £200
D Dr purchases £200
Dr Trade payables £250
Cr Cash £450

ANSWER: D
(2 marks)

QUESTION 12

Which of the following statements in true?

A A debit records an increase in liabilities

B A debit records a decrease in assets
C A credit records a decrease in capital
D A credit records an increase in liabilities

ANSWER: D (2 marks)

QUESTION 13
The accrual basis of accounting records revenues when they are:
A Collected
B Earned
C Contracted

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Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

D Readily available for use.

ANSWER: C (2 marks)

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

QUESTION 14

At 1 July 2019 the receivables allowance of MM was £25,000.

During the year ended 30 June 2020 debts totalling £13,600 were written off. It was decided
that the receivables allowance should be £17,000 as at 30 June 2020.

What amount should appear in MM’s incomes statement for irrecoverable debts expense for
the year ended 30 June 2020?

WORKINGS:

Irrecoverable depts 13600

Receivables allowance

ANSWER:
(2 marks)

QUESTION 15

An inexperienced bookkeeper has drawn up the following receivables control account:

RECEIVABLES CONTROL ACCOUNT

£ £
Opening Balance 27,550 Cash received from credit 130,050
customers
Credit Sales 119,350 Contras against payables 560
Sales Returns 1,830 Allowance for receivables 9,390
Cash Sales 45,060 Closing balance 60,000
Irrecoverable Debts 750 (balancing figure)
Discounts allowed 5,460
200,000 200,000

What should the closing balance be after correcting the errors made in preparing the account?

WORKINGS:
RECEIVABLES CONTROL ACCOUNT
£ £

ANSWER:
(4 marks)

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

QUESTION 16
The cashbook shows a bank balance of £2,500 overdrawn at 31/03/16. It is subsequently
discovered that a standing order for £110 has been entered twice, and that a dishonoured
cheque for £30 has been debited in the cashbook instead of credited.

What is the correct bank balance?

WORKINGS:

ANSWER: (3 marks)

QUESTION 17

The following bank reconciliation statement has been prepared by a trainee accountant:
£
Overdraft per bank statement 4,540
Less: Outstanding cheques (1,950)
2,590
Add: Deposits credited after date 6,620
Cash at bank as calculated 9,210
above

What should be the correct balance per the cashbook?

WORKINGS:

ANSWER:
(3 marks)

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

QUESTION 18

What are the correct ledger entries to record closing prepayments?

A Dr Expenses
Cr Liability
B Dr Asset
Cr Expenses
C Dr Liability
Cr Expenses
D Dr Expenses
Cr Asset

ANSWER:

(2 marks)

QUESTION 19

Your firm bought a machine for £5,000 on 1 January 2018, which had an expected useful life
of four years and an expected residual value of £1,000: the asset was to be depreciated on
the straight-line basis. The firm’s policy is to charge depreciation in the year of disposal. On
31 December 2020, the machine made a loss on disposal of £1,300.

What is the amount of the sale proceeds on disposal of the asset?

WORKINGS:

ANSWER:
(3 marks)

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

QUESTIONS 20, 21, 22 AND 23

Dale Ltd specialises in retailing one product. The firm purchases its inventory from a
regional wholesaler and sells through a catalogue. Details of Dale Ltd’s purchases and
sales for the month of June 2020 are as follows:

Purchases:
Date Units received Production cost per unit
10th June 8 £55.00
16th June 12 £56.00
20th June 9 £58.00
Sales:
Date Units sold Sales price per unit
12th June 7 £78.00
19th June 15 £80.00
25th June 10 £85.00

Note: Dale Ltd had opening inventory at 1.6.20 of 5 units, costing £50.00 each.

QUESTION 20: What is the purchases figure for Dale Ltd’s Income Statement?

WORKINGS:

ANSWER:
(2 marks)

QUESTION 21: What is the sales figure for Dale Ltd’s Income Statement?

WORKINGS:

ANSWER:

(2 marks)

QUESTION 22: What would the closing inventory amount be under the FIFO inventory

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

valuation?

WORKINGS:

ANSWER:
(3 marks)

QUESTION 23: What would the closing inventory amount be under the AVCO inventory
valuation using the perpetual method?

WORKINGS:

ANSWER:
(4 marks)

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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

QUESTION 24

The following information was disclosed for the year ended 31/12/20:
2020 2019
£ £
Plant and Equipment 220,000 200,000
Accumulated Depreciation (110,000) (95,000)

During 2020, the following occurred in respect of Plant and Equipment (P&E):
£
Purchases of P&E 28,000
Depreciation charged on P&E 21,000
Sale Proceeds 1,000

What was the profit or loss on the sale of the asset?

WORKINGS:

ANSWER:

(4 marks)

QUESTION 24

The original trial balance for Momo Company at the end of its fiscal year are presented below:

 Name of account Dr £ Cr £
Stationery 1,000  
Sales Returns (In) 3,443  
Sales   78,667
Salaries & Wages 24,229  
Accumulated Dep'n - Fixtures & fittings   5,250
Rent & Rates 2,400  
Purchases 38,899  
Purchase Returns (Out)   1,737
Opening Inventories 9,854  
Accumulated Depreciation - Vehicles   5,000
Insurance 3,200  
Heating & Lighting 3,452  
Discounts Received   3,333
Cash 250  
Carriage Out 2,799  
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 Exam Title: Financial Accounting: MOCK EXAM 1 Module No. : BAC4023

Carriage In 950  
Capital   118,005
Bank 1,732  
Payables   6,522
Discounts Allowed 4,224  
Motor Expenses 655  
Premises 65,000  
Sundry Expenses 331  
Telephone 919  
Receivables 1,177  
Drawings 20,000  
Fixtures & Fittings 14,000  
Vehicles 20,000  
  218,514 218,514

The following additional information as at 31 December 2021 is available:

(a) Closing inventory were valued at £6,783

(b) F&F are to be depreciated at 15% of Cost
(c) Vehicles are to be depreciated at 25% of Carrying Amount.
(d) Telephone has to be accrued for the last two months of the year, the value in the TB is
for the first ten months of the year
(e) We prepaid insurance by £1000, which has been included in the TB value
Required:
1. Journalize the adjustments
2. Prepare Momo Company’s Statement of Profit or Loss for the year ended December
2022 and Statement of Financial Position as at that date

(40 marks)

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