Dlca 1.B/D 2.sale 3.interest 4.dish0n0ur Cheque 1.cash Received 2.reurn 0utward 3.bad Debts 4. C0ntra Entry 5.C/D
Dlca 1.B/D 2.sale 3.interest 4.dish0n0ur Cheque 1.cash Received 2.reurn 0utward 3.bad Debts 4. C0ntra Entry 5.C/D
Dlca 1.B/D 2.sale 3.interest 4.dish0n0ur Cheque 1.cash Received 2.reurn 0utward 3.bad Debts 4. C0ntra Entry 5.C/D
Question:1
Which of the following statements are true regarding disclosure of events after the reporting period?
(1) Non-adjusting events are disclosed if non- disclosure would affect the ability of users to make
proper evaluations and decisions
(2) Any new information received between the end of the reporting period and the date the
financial statements are authorized for issue, relating to conditions existing before the end of
the reporting period, does not need to be discloser or adjusted
Question:2
Which TWO of the following should be recorded on the credit side of the accounts receivable control
account? DLCA
Contras against accounts payable
Irrecoverable debts written off
1.B/D 1.cash received
Dishonored cheques 2.sale 2.reurn 0utward
Credit sales 3.interest 3.bad debts
Question:3
4.dish0n0ur 4. c0ntra entry
cheque 5.C/D
Samantha is a shareholder of Gold Co
Gold Co has had a difficult trading year and as a result Samantha is worried about the liquidity of the
company
Question:4
In respect of directors’ responsibilities, which of the following statements are true or false?
True False
It is the direct’ responsibility to prepare the financial statements
FALSE
RFH SCHOOL OF ACCOUNTANCY
Question:5
When a machine is purchased, it is capitalized as a non-current asset and depreciated over its useful life,
rather than writing the cost off in full in the statement of profit or loss.
Materiality
Accruals concept
Substance over form
Business entity concept
Question:6
Expenditure in developing a new white chocolate bar due to start commercial production next
year
A new machine to be used in the development laboratory producing a new chocolate bar
Investigation into a new recipe of chocolate icing
Applied research on a project into non-melting chocolate
Question:7
Semple uses FIFO for inventory valuation. Transactions during July 20X6 were as follows:
21 July 120 52
Question:8
In according with IAS 37 provisions, Contingent Liabilities and Contingent assets which TWO of the
following would be treated as provisions?
The cost of repairing environmental damage after leakage of factory chemicals into a river
The expected cost of repair of goods sold under warranty
The amount that will probably be recovered in a legal case
Electricity cost, calculated according to a bill received after the year end
Question:9
Non-current assets should always be revalued annually so that values in the statement of
financial position are kept up-to-date
Self-constructed assets should be depreciated from the date construction starts
The useful life of a tangible non-current asset cannot be more than 20 years
At the end of each accounting period the residual value and useful life of a non-current asset
should be reviewed
Question:10
add
A company made a profit for the year of $18,750, after accounting for depreciation of $1,250. During
less for $8,000, receivables increased by $1,000. Inventories
the year, non-current assets were purchased
add decreased by $1,800 and payables increased by $350. add less
According to IAS 7 statements of Cash Flows, what should be the increase in cash and cash equivalents
during the year? =18750+1250-8000-1000+1800+350
13150
$ _________________ =13150
Question:11
Cash received for credit sales made 5,215 (including sales tax of $783)
In September 20X8
SALE=3800+7250+1200
SALE=12250
RFH SCHOOL OF ACCOUNTANCY
$9,392
$12,250
$13,824
$15,024
Question:12
Question:13
The loan is repayable in five equal annual installments starting on 1 January 20X7
How much of the loan capital is shown as a non-current liability in Clarence statements of financial
position at 31 December 20X6?
11500/5=2300
9200
$ ______________ =11500-2300
Question:14 =9200
Which TWO of the following errors would lead to the creation of a suspense account?
Question:15
Rehnie uses the average cost (AVCO) method for inventory valuation. Transactions during October 20X6
were as follows:
purchases
14 Oct purchases 800 3.75 3000
25 Oct issues 1000 400
Which TWO of the following material events after the reporting period are adjusting events according to
IAS 10 Events after the reporting period?
A legal claim, against which a provision of $50,000 had been made was settled for $40,000
A 15% shareholding was acquired in STU for $10m N0
An accident occurred in the company’s factory injuring five employees n0
Inventories which were included in the statement of financial position at cost of $10,000 were
sold for $7,000
Question:17
Which of the following would be recognized as a provision in the financial statement in accordance with
IAS 37 provisions, contingent Liabilities and Contingent Assets?
Question:19
A trial balance has been extracted but does not be responsible for the difference?
wr0ng questi0n
RFH SCHOOL OF ACCOUNTANCY
Question:20
Smith receives a bank statement which shows an overdrawn balance of $3,500. Whilst carrying out a
reconciliation of the cash book to the bank statement balance, the following points came to light:
(1) Cheques sent to suppliers for $4,019 have not been presented to the bank at the date of the
bank statement
(2) A payment of $75 has been paid out of the bank account due to a bank error
After correction of the above points, what amount should be shown in the statement of financial
position for the bank overdraft?
7519 3500
$ __________
4019
Question:21 7519
Magic Co had the following share capital in issue for the year ended 31 December 20X4:
$7,100 5000+2100
$10,100 =7100
$5,000
$8,000
Question:22
BF Co has 120 units in inventory at 31 March 20X8. Each unit had cost $450 when they were purchased.
The normal sales price of each unit is $500. During March 20X8 20 of the units were damaged and will
require repair costs of $12.50. the selling price after repairs have been carried out will be $430 per unit.
$50,100
51350
$53,600
$54,000
$53,350
Question:23
Rajesh runs a business selling computers to individuals. His terms of sale are primarily cash on delivery
with large customers allowed 14 days credit.
Which of the following transactions should be recognized as revenue in Rajesh’s financial statements?
Rajesh has sold one of his delivery vans to his brother and has received payment in cash
Rajesh has received payment from his largest customer for a delivery of 20 computers that took
place two weeks ago
A customer has promised to place an order next week for a new computer and has paid a
refundable deposit of $100
A competitor who has run out of a particular item has asked Rajesh to fulfill a sale to a customer
and Rajesh delivered the goods
Question:24
At the end of each accounting period the residual value and result value and useful life of a non-
current asset should be reviewed
Self-constructed assets should be depreciated from the date construction starts
The useful life of a tangible non-current asset cannot be more than 20 years
Non-current assets should always be revalued annually so that values in the statement of
financial position are kept up-to date
Question: 25
Which of the following would help a company with high gearing to reduce its gearing ratio?
Question:26
3 and 4 only
1, 2 and 4 only
1, 2, 3 and 4
1 and 2 only
Question:27
A business sold goods with a list price of $24,000 to a credit customer. The customer is entitled to a
trade discount of 5% and also to a further 2.5% discount if payment is made within ten days of the
invoice date which he is expected to do at the point when the sale is made.
0nly SALE am0unt
What amount should be credited to the revenue in the statement of profit or loss?
$22,800
=24000*5%
$22,230 =22800*2.5%
$24,000 =22230
$23,400
Question:28
A company’s statement of profit or loss for the year ended 31 March 20X0. Showed the following:
$’000
_____
_____
______
Extracts from its statement of financial position at 31 March 20X0 showed the following:
$’000
RFH SCHOOL OF ACCOUNTANCY
_____
Equity 9,200
_____
What is the return on capital employed for the year ended 31 March 20X0?
5.6%
6.5%
10.7%
8.9%
Question:29
When performing his year end inventory count Mahmood accidentally counted goods that were in the
dispatch area waiting to be delivered to customers. The goods had a cost of $50,000 and were
dispatched prior to the year end.
What impact does this uncorrected error have on profit and assets at the year end?
Overstated understated
Profits 50000
Assets 50000
Question:30
Which of the following objectives will be achieved by the preparation of the trial balance?
To ensure that all debit and credit entries are entered in the correct ledger accounts
To ensure that all accounting entries have accurately recorded the correct amount of a
transaction
To check that all balances have been correctly extracted from the ledger accounts
To check for the omission of accounting entries in the accounting records
RFH SCHOOL OF ACCOUNTANCY
Question:31
The inventory records of Fragment Co as at 31 December 20X9 have been destroyed. The following
information has been obtained for the year ended 31 December 20X9:
$ S=C+P
Sales 915,800
125=100+25
Purchases 688,800 100/125*915800
CGS=732640
Opening inventory 156,800
CL. ST0CK=156800+688800-732640
Fragment Co applies a 25% mark-up on all sales. CL.ST0CK=112960
$ 112960
__________
Question:32
Corey had an interest accrual of $45,450 on 1 January 20X6 and a closing interest accrual of $48,750 in
the financial statements for the year ended 31 December 20X6. The finance cost in the statement of
profit or loss was $256,000.
What figure should appear for interest paid in the statement of cash flows for the year ended 31
December 20X6?
45450 b/d
252700
$ ___________ 252700
256000 I/S
Question:33 c/d 48750
A company purchased a non-current asset on 1 January 20X6 for $90,000. The company depreciates
non-current assets on a straight-line basis over five years. On 1 January 20X7 a modification costing capital
$10,000 was made to the non-current asset to extend its useful life by one year and routine
revenue maintenance costing $5,000 was also carried out. c0st=90000
useful life=5 years
Which amount should be charged for depreciation for the year to 31 December 20X7?
=90000/5
$17,400 dep.=18000
$21,000 nbv=72000+10000
$16,667
=82000/5
$16,400
=16400
Question:34
Which of the following statements are true regarding disclosure of events after the reporting period?
RFH SCHOOL OF ACCOUNTANCY
(1) Non-adjusting events are disclosed if non-disclosure would affect the ability of users to make
proper evaluations and decisions
(2) Any new information received between the reporting period and the date the financial
statements are authorized for issue, relating to conditions existing before the end of the
reporting period, does not need to be disclosed or adjusted.
1 only
2 only
Neither statement is true
1 and 2
Question:35
Amir receives $980 from a credit customer. This was net of an early settlement discount of $20 which
the customer was expected to take advantage of at the time the invoice was issued:
What expected to take advantage of at the time the invoice was issued
Question:36
Which of the following costs could be capitalized as an intangible asset in accordance with IAS 38
intangible Assets?
Question:37
$ $
_______ ______
95,400 95,400
_______ ______
What is the balance for receivables in the trial balance at 30 June 20X9?
$39,900 Dr
$39,900 Cr
$33,800 Dr
$33,800 Cr
Question:38
Question:39
DTT sells a large quantity of inventory on 22 December 20X4 and recognizes this sale in the year ended 3
December 20X4, even though the cash will not be received until February 20X5.
Going Concern
Materiality
Business entity (reporting entity) concept
Accruals basis
Question:40
In accordance with IAS 37 provisions Contingent Liabilities and Contingent Assets which TWO of the
following statements are correct?
Question:41
Francois incorrectly posted his discounts received of $400 by only making an entry in the discounts
received ladger account DR. CLCA
(W.S.H)
Which journal entry should be used to correct this error?
CR.D.R
DR. SUSPENSE (W.H)
Dr payables Cr suspense
CR. D.R
Dr payables Cr discounts received
Dr discounts received Cr suspense
Dr suspense Cr payable DR. CLCA (C.0.E)
CR. SUSPENSE
Question:42
$ $
______ _______
91,631 91,631
_______ ________
After correcting the errors made in preparing the account, what should the closing balance be?
Faithful representation
Relevance
Timeliness
Understandability
Question:44
The accountant of ABC Co extracted a balance of $85,105 from the trade payables control account.
Whilst carrying out a reconciliation of the balances on the accounts payables control account with the
list of balances on the payables ledger, the following errors were identified:
(1) A payment to a credit supplier for $55 had been made from petty cash but had not been
recorded in the payables control account
(2) Discounts received of $32 had been recorded as discounts allowed
(3) Goods costing $140 had been returned to the supplier but this transaction had been recorded
(4) The purchase day book was overcast by $900 n0t
What is the balance on the accounts payables ledger control account after adjusting for these errors?
Question:46
A company has a financial year end of 30 September 20X7. On 1 October 20X7 there was:
(1) A fall in the value of several foreign currencies, which significantly reduced the value of the
company’s overseas assets n0n adjusting events
(2) A serious fault discovered in some year end inventories, which made them worthless adjusting event
According to IAS 10 Events After the Reporting Period, which of the above should be regarded as
adjusting events for the year to 30 September 20X7?
RFH SCHOOL OF ACCOUNTANCY
Neither 1 nor 2
2 only
1 only
1 and 2
Question:47
When using the indirect method of reporting cash flows from operating activities, which TWO of the
following would create an INCREASE in the cash generated from operations in a statement of cash
flows?
Question:48
A business recently purchased a new motor van for use by the sales department. Details of the
purchase, as it appeared on the invoice from the motor dealer are as follows:
35,000
Additional items
39,100
38000-3000 35000+2200+1200
=35000 =38400
RFH SCHOOL OF ACCOUNTANCY
_________
What is the purchase cost of the motor van to be recorded on the statement of financial position?
38400
________________
Question:49
This is an extract from Kamal’s trial balance for the year end 30 June 20X8.
$
CGS=19500+325000+8250+15700-22250
Opening inventory add 19,500 CGS=368450-22250
CGS=346200
Closing inventory less 22,250
What should be the cost of sales figure shown in Kamal’s statement of profit or loss for year ended 30
June 20X8?
346200
$ ___________
Question:50
The accounts receivable control account contains details of individual customer accounts
The sales day book is part of the double entry system
A book of prime entry is one with an initial record of transaction is made
The account receivable control account always agree to the accounts receivable ledger