2011 Paper F3 QandA Sample Download v1

Practice Questions and Answers
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ACCA Paper F3: Financial Accounting (International)
Tony Surridge Online Limited, 2011
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ACCA Paper F3: FINANCIAL ACCOUNTING (INTERNATIONAL) Practice Questions and Answers
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Copyright statement For the ladies only 10 Golden Rules for a Computer-based Examination Computer Based Exams
ACCA Paper F3
Syllabus
The structure of the syllabus Intellectual levels Learning hours Guide to exam structure Guide to examination assessment Aim Main capabilities Relational diagram of main capabilities Rationale Detailed syllabus Approach to examining the syllabus
Financial Accounting (International)

+AddVance Practice Questions and Answers
Study Guide
A B C D E F The content and purpose of financial reporting The qualitative characteristics of financial information and the fundamental bases of accounting The use of double-entry and accounting systems Recording transactions and events Preparing a trial balance Preparing basic financial statements
Your Study Material

The syllabus outline and our Questions and Answers pathway through it Click here In ADDITION there are THREE tests. Click below.
Tests
Diagnostic Test 1 Diagnostic Test 2 Diagnostic Test 3 Questions Questions Questions Answers Answers Answers
Where shall I begin, please your majesty? he asked. Begin at the beginning, the king said gravely, and go on till you come to the end: then stop. Lewis Carroll Through the Looking-Glass
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The syllabus outline and our pathway through it .

Syllabus section A B Main topic Pages Questions The context and purpose of financial reporting The qualitative characteristics of financial information and the fundamental bases of accounting The use of double-entry and accounting systems Recording transactions and events Preparing a trial balance Preparing basic financial statements Diagnostic Test 1 Diagnostic Test 2 Diagnostic Test 3 Answers
22 45
36 48
C D E F
50 85 131 174 223 247 274
71 112 154 203 241 265 286
This free sample shows the first 16 questions and answers of Diagnostic Test 3
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DIAGNOSTIC TEST - 3
QUESTION PAPER Time allowed: 2 hours All FIFTY questions are compulsory and MUST be attempted
Do NOT attempt this test until you are ready for the test.
Paper F3
7
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Which books of prime entry the following transactions would be entered into. 1 2 3 4 5 6 7 8 A B C D E F Your business pays B Smith (a supplier) $300.00. Your accounts manager asks you for $10 urgently in order to buy a box of paper. You pay B Boston $200. D Jay pays you $100. You send W Whythe (a customer) an invoice for 250. You receive an invoice from C Jeans for $550. S Samuels (a customer) returns goods to the value of $50. You return goods to A Green to the value of $400. Petty cash book Cash book Sales returns day book Sales day book Purchase returns day book Purchases day book
(2 marks)
Sales tax is: A B C D Charged by businesses on taxable supplies. A direct tax levied on sales of goods and services. An indirect tax levied on the sales of goods and services. Administered by the Treasury.
(2 marks)
How is closing inventory incorporated in the financial statements? A B Debit: balance sheet Debit: income statement Credit: income statement Credit: balance sheet
A
(1 mark)
When adjusting profit before tax to arrive at cash generated from operations, a decrease in receivables is added to profit before tax. Is this statement: A B False True
(1 mark)
During a period, Cee Co has the following transactions on receivables control account. Sales $125,000, cash received $50,000, discounts allowed $2,000. The balance carried forward is $95,000. What was the opening balance at the beginning of the period? A B C D $20,000 debit $18,000 debit $22,000 debit $22,000 credit
(2 marks)
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A business has opening payables of $75,000 and closing payables of $65,000. Cash paid to suppliers was $65,000 and discounts received $3,000. What is the figure for purchase? A B C D $78,000 $55,000 $58,000 $52,000
(2 marks)
Which of the following accounting items may have control accounts in the nominal ledger? 1 2 3 4 A B C D Cash. Inventories. Salaries and wages. Receivables and payables. 1, 2 and 4 2 and 4 2, 3 and 4 1, 2, 3 and 4
(2 marks)
What is the double entry to record a purchase of office tables for $3,000? A B Debit cash $3,000, credit purchases $3,000. Debit non-current assets $3,000, credit cash $3,000.
A
(1 mark)
Profits for the year are $65,000. A, B and C share profits in the ratio 2:2:1. Opening balances on their current accounts were $15,000, $12,000 and $10,000 respectively. If each partner had drawings of $10,000, what is the closing balance on Bs account? A B C D $26,000 $18,000 $28,000 $16,000
(2 marks)
10
What is the double entry to record a credit sale of $30? A B C D Debit sales $30, credit cash $30. Debit cash $30, credit sales $30. Debit sales $30, credit receivables $30. Debit receivables $30, credit sales $30.
(2 marks)
11
The balance on an expense account will go to the I & E account. However, the balance on a liability account is written off to capital. A B No Yes
(1 mark)
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12
Which of the following statements regarding non-current asset accounting is correct? A B C D Non-current assets should be re-valued to reflect rising prices. All non-current assets should be re-valued each year. Non-current assets may be re-valued at the discretion of management. Once re-valuation has occurred it must be repeated regularly for all non-current assets in a class. Management can choose which non-current assets in a class of non-current assets should be re-valued. (2 marks)
13
A company has a provision for warranty claims b/f of $50,000. It does a review and decides that the provision needed in future should be $45,000. What is the effect on the financial statements? Income statement Increase expenses by $5,000 Increase expenses by $5,000 Decrease expenses by $5,000 Decrease expenses by $5,000 Balance sheet Provision $45,000 Provision $50,000 Provision $45,000 Provision $50,000
A B C D
(2 marks)
14 MASs trial balance includes the following items: non-current assets $50,000, inventory $15,000, payables $10,000, receivables $5,000, bank $110,000, allowance for receivables $1,000. What is the figure for current assets? A B C D 15 $134,000 $170,000 $180,000 $129,000
(2 marks)
A company issues 50,000 $1 shares at a price of $1.25 per share. How much should be posted to the share premium account? A B C D $60,000 $50,000 $62,500 $12,500
(2 marks)
16
In the published accounts of CeeJay Co, the profit for the period is $7,000,000. The balance of retained earnings at the beginning of the year is $1,000,000. If dividends of $5,000,000 were paid, what is the closing balance of retained earnings? A B C D $8,000,000 $3,000,000 $1,000,000 $2,000,000
(2 marks)
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17
An irrecoverable debt arises in which of the following situations? A B C D The customer goes bankrupt. A customer pays part of the account. The invoice is not yet due for payment. An invoice is in dispute.
(2 marks)
18
What is the double entry to record a credit sale of $200 to A? A B Debit receivables ledger (As account) $200, credit sales $200 Debit receivables $200, credit sales $200
A
(1 mark)
19
What is included in the cost of purchase of inventories according to IAS 2? A B C D Purchase price plus import duties plus transport costs less trade discount. Purchase price less trade discount. Purchase price plus transport costs less trade discount. Purchase price less import duties less trade discount.
(2 marks)
20
Individual customer accounts are kept in which ledger? A B C D Receivables ledger Nominal ledger General ledger Trade accounts receivable
(2 marks)
21
A business has net assets of $70,000 at the beginning of the year and $80,000 at the end of the year. Drawings were $25,000 and a lottery win of $5,000 was paid into the business during the year. What was the profit for the year? A B C D $30,000 loss $10,000 loss $10,000 profit $30,000 profit
(2 marks)
22
Which of the following headings is not a classification of cash flows in IAS 7? A B C D Investing Operating Financing Administration
(2 marks)
23
What is a journal used for? A B C D To make adjustments to the double entry. To correct errors and clear suspense account. To correct errors. To correct errors and post unusual transactions.
(2 marks)
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24
AyBee Co has development expenditure of $500,000. Its policy is to amortise development expenditure at 2% per annum. Accumulated amortisation brought forward is $20,000. What is the charge in the income statement for the years amortisation? A B C D $9,600 $20,000 $10,000 $400
(2 marks)
25
Given the facts in question above, what is the amount shown in the balance sheet for development expenditure? A B C D $490,000 $470,000 $500,000 $480,000
(2 marks)
26 Which of the following are common reasons for differences between the cash book and the bank statements? 1 2 3 4 A B C D 27 Contra entries Errors Timing differences Omissions 2 and 3 1, and 3 1, 2 and 4 2,3 and 4
(2 marks)
Which of the following items are non-current assets? 1 2 3 4 A B C D Inventory Land Machinery Bank loan 2 only 2 and 3 1, 2 and 3 2, 3 and 4
(2 marks)
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28
Which of the following statements regarding depreciation is correct? A A change in the chosen depreciation method is a change in accounting policy which should be disclosed. Depreciation charges must be based upon the carrying value of an asset (less residual value if appropriate). All non-current assets must be depreciated. Straight line depreciation is usually the most appropriate method of depreciation. (2 marks)
C D
29
What must be done with a suspense account before preparing a balance sheet? A B C D Include in liabilities Include in assets Write it off to capital Clear it to nil
(2 marks)
30
All petty cash claims are automatically paid from petty cash. Is this statement: A B False True
(1 mark)
31
When a cash purchase of $117.50 is made (including sales tax at 17.5%) the entries are: A Debit Credit Debit Debit Credit Debit Credit Debit Debit Credit Cash Purchases Purchases Sales tax Cash Purchases Cash Cash Sales tax Purchases 117.50 117.50 100.00 17.50 117.50 117.50 117.50 100.00 17.50 117.50 (2 marks)
32
Which of the following is not a book of prime entry. A B C D Sales day book Journal Purchase day book Sales invoice
(2 marks)
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33
Heating paid during the year is $14,000. There was an opening accrual b/f of $500. A bill for the quarter ended 31 January 2010 was $900. What is the heating charge in the income statement for the year ended 31 December 2009? A B C D $14,400 $13,900 $14,000 $14,100
(2 marks)
34
What are the objectives of the IASB? A B To issue IFRSs To enforce IFRSs
A
(1 mark)
35
Sales returns of $220 have inadvertently been posted to the purchase returns, although the correct entry has been made to the accounts receivable control. A suspense account needs to be set up for how much? A B C D $220 debit $220 credit $440 debit $440 credit
(2 marks)
36
Ceeta has the following opening balances on its ledger accounts.
A
Trade account receivable Fixtures Bank account Loan (a) A B C D (b) A B C D What is the total assets figure? $8,200 $6,200 $4,000 $2,000 What is the opening figure for capital? 3,200 2,000 8,200 4,200 $ 5,000 2,000 1,200 4,000
(2 mark)
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37
Which of the following is the correct formula for cost of sales? A B C D Opening inventory closing inventory + purchases Opening inventory + closing inventory purchases Opening inventory purchases + closing inventory Purchases closing inventory + sales
(2 marks)
38
A business usually has a mark-up of 20% on cost of sales. During a year, its sales were $90,000. What was the cost of sales? A B C D $18,000 $75,000 $15,000 $72,000
(2 marks)
39
A trial balance may still balance if some of the balances are wrong.
A
Is this statement correct? A B 40 No Yes
(1 mark)
A company has the following extract from a balance sheet. 2010 $000 2,000 500 750 2009 $000 1,000 Nil 1,000
Share capital Share premium Loan stock
What is the cash flow from financing activities for the year? A B C D 41 $1,250 outflow $1,750 outflow $1,250 inflow $1,750 inflow
(2 marks)
A bank statement shows a balance of $1,200 in credit. An examination of the statement shows a $500 cheque paid in per the cash book but not yet on the bank statement and a $1,250 cheque paid out but not yet on the statement. In addition the cash book shows deposit interest received of $50 but this is not yet on the statement. What is the balance per the cash book? A B C D $500 overdrawn $500 in hand $1,900 overdrawn $1,900 in hand
(2 marks)
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42
What is the purchase returns day book used to record? A B C D Details of goods returned to suppliers Details of goods returned by customers Suppliers invoices Customers invoices
(2 marks)
43
How does a company account for a contingent asset that is not probable? A B C As an asset in the balance sheet It does nothing By way of note
A
(2 marks)
44
What happened in 2005 for listed companies in the EU? A B IFRSs to be used for consolidated financial statements. IFRSs to be used for all financial statements.
A
(1 mark)
45
Sales tax is due on all sales. Is this statement correct? A B No Yes
A
(1 mark)
46
A company has the following information about property, plant and equipment. 2010 $000 750 250 500 2009 $000 600 150 450
Cost Accumulated depreciation Net book value
Plant with a net book value of $75,000 (original cost $90,000) was sold for $30,000 during the year. What is the cash flow from investing activities for the year? A B C D 47 $95,000 outflow $210,000 outflow $210,000 inflow $95,000 inflow
(2 marks)
A company has a balance on share premium account of $50,000 and on retained earnings of $75,000. Issued share capital is 400,000 25cents shares. The company decides to make a bonus issue of one for one. What are the closing balances on share premium and retained earnings? Share premium $25,000 $10,000 Nil ($50,000) Retained earnings Nil $15,000 $25,000 $75,000
A B C D
(2 marks)
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48
Which of the following items are non-adjusting events? 1 2 Inventory destroyed by flood two days before the balance sheet date. Fall in value of an investment between the balance sheet date and the date the financial statements are finalised. A customer goes bankrupt. 1 only 2 only 3 only None of the above
3 A B C D 49
(2 marks)
Which of the following items is an intangible asset? A B C D Van Land Buildings Patents
(2 marks)
50
Irrecoverable debts are $5,000. Trade accounts receivable at the year end are $120,000. If an allowance for receivables of 5% is required, what is the entry for irrecoverable debts and allowance for receivables in the income statement? A B C D $10,750 $6,000 $5,000 $11,000
(2 marks)
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THE END OF DIAGNOSTIC TEST 3
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DIAGNOSTIC TEST - 3
ANSWER GUIDES
Paper F3
19
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OVERVIEW OF ANSWERS FOR DIAGNOSTIC TEST 3

Question number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Marks available 2 2 1 1 2 2 2 1 2 2 1 2 2 2 2 2 2 1 2 2 2 2 2 2 2 90 2 hours Answer Question number 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Marks available 2 2 2 2 1 2 2 2 1 2 2 2 2 1 2 2 2 2 1 1 2 2 2 2 2 Answer
Total marks available : Time allowed :
SCROLL SCREEN BY SCREEN TO SEE EACH ANSWER INDIVIDUALLY
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1 2 3 4 5 6 7 8 C A B
B A B B D F C E
Cash book Petty cash book Cash book Cash book Sales day book Purchases day book Sales returns day book Purchase returns day book
Correct
Q
Only sales tax registered traders can charge sales tax. Incorrect, the consumer has a choice as to whether or not to consume so sales tax is only chargeable when this choice is exercised. Incorrect, sales tax is administered by the tax authorities. DEBIT: CREDIT: True Inventory in hand (balance sheet) Closing inventory (trading account)
D 3 A
Q Q Q
C RECEIVABLES CONTROL $ 22,000 Cash 125,000 Discounts allowed Balance c/f 147,000
Balance b/f (bal figure) Sales
$ 50,000 2,000 95,000 147,000
If you had answer D, you reversed the double entry and so produced a payables control account. In answer A, you omitted the discounts allowed figure; while in answer B you put discounts allowed on the debit instead of the credit side of the control account. 6 C Bank Discount received Closing payables PAYABLES CONTROL $ 65,000 Opening payables 3,000 Purchases (bal fig.) 65,000 133,000
$ 75,000 58,000 . 133,000
7 8
D B
Q Q
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C A $ Drawings 10,000 Closing bal 31,000 41,000 B $ 10,000 28,000 38,000
CURRENT ACCOUNTS C $ 10,000 Opening bal 13,000 Profits 2:2:1 23,000
A $ 15,000 26,000 41,000
B $ 12,000 26,000 38,000
C $ 10,000 13,000 23,000
10 11
D A When an expense account is balanced off, the balance is transferred to the income and expense account. When a liability account is balanced off, the balance is carried forward to the next accounting period. Correct Incorrect, non-current assets may be reduced in value as well as being increased. Non-current assets may be revalued, there is no requirement to do so in IAS 16. Incorrect, all non-current assets in a class must be revalued.
Q Q
12
C A B D
13
C PROVISION ACCOUNT $ 5,000 Balance b/f 45,000 50,000 $ 50,000 . 50,000
Q
I & E account Balance c/f
Note: We are debiting provision account $5,000 and so crediting income statement $5,000. Therefore, we are decreasing expenses. 14 D Current assets Inventory Receivables (5,000 - 1,000) Bank $ 15,000 4,000 110,000 129,000
15
(50,000 x 25 cents) = $12,500
Q
$000
16
B Retained earnings Opening balance Profit for the period Dividends paid Closing balance
1,000 7,000 8,000 (5,000) 3,000
The Answers are continued in the full edition

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Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited technical@tonysurridge.co.uk www.tonysurridge.co.uk

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

No snowflake in an avalanche ever feels responsible. Voltaire

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Financial Accounting (International)

Your Study Material

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

The syllabus outline and our pathway through it .

50 85 131 174 223 247 274

71 112 154 203 241 265 286

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Ceeta has the following opening balances on its ledger accounts.

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Share capital Share premium Loan stock

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Sales tax is due on all sales. Is this statement correct? A B No Yes

Cost Accumulated depreciation Net book value

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

Tony Surridge Online Limited, 2011

Practice Questions and Answers

ACCA Paper F3: Financial Accounting (International)

THE END OF DIAGNOSTIC TEST 3