Top Banner
ACCA REVISION MOCK Financial Accounting June 2011 QUESTION PAPER Time allowed 2 hours ALL questions are compulsory Do not open this paper until instructed by the supervisor This question paper must not be removed from the examination hall Kaplan Publishing/Kaplan Financial Paper F3 (INT)
22

ACCA F3 INT Revision Mock - Questions J11

Oct 26, 2014

Download

Documents

Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: ACCA F3 INT Revision Mock - Questions J11

ACCA REVISION MOCK

Financial Accounting June 2011

QUESTION PAPER

Time allowed 2 hours

ALL questions are compulsory

Do not open this paper until instructed by the supervisor

This question paper must not be removed from the examination hall

Kaplan Publishing/Kaplan Financial

Pape

r F3

(IN

T)

Page 2: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

2 KAPLAN PUBLISHING

© Kaplan Financial Limited, 2011

The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary. Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims, whether direct, indirect, incidental, consequential or otherwise arising in relation to the use of such materials.

All rights reserved. No part of this examination may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without prior permission from Kaplan Publishing.

Page 3: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 3

ALL questions are compulsory

QUESTION 1

Which of the items listed below could appear in a company’s statement of cash flows?

(i) Dividends received.

(ii) Bonus issue.

(iii) Irrecoverable debts.

(iv) Proceeds of a sale of a non-current asset.

(v) Surplus on the revaluation of a non-current asset.

A (i), (ii) and (iv)

B (i), (ii) and (iii)

C (i) and (iv)

D (ii) and (v) (2 marks)

QUESTION 2

The following bank reconciliation has been prepared by the company’s bookkeeper as at 31 July 20X9:

$ Overdraft per bank statement 7,700 Add: Unpresented cheques 18,300 Less: Lodgements/deposits credited 30,600 –––––– Bank overdraft per cash book 4,600 ––––––

What is the correct balance per the cash book?

A $4,600 overdraft

B $4,600 positive

C $20,000 positive

D $20,000 overdraft (2 marks)

Page 4: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

4 KAPLAN PUBLISHING

QUESTION 3

A company lets out a number of properties. The total rent received in the year ended 31 July 20X9 was $902,400. The following amounts were received in advance or were in arrears at the dates shown:

31 July 20X9 1 August 20X8

$ $

Rent received in advance 61,300 27,600

Rent in arrears ( all subsequently received ) 33,500 41,700

What amount of rental income should appear in the statement of comprehensive income for the year ended 31 July 20X9?

A $944,300

B $860,500

C $821,700

D $876,900 (2 marks)

QUESTION 4

At 1 August 20X8 a company had receivables of $26,000 and an allowance for receivables of $1,860. During the year ended 31 July 20X9 credit sales totalled $300,000, payments from credit customers were received amounting to $295,000 debts totalling $6,800 were written off. At 31 July 20X9 it was decided to write off further bad debts amounting to $2,600. At 31 July 20X9 it was decided to make an allowance for receivables of 10% at the year end.

What figure should appear in the company’s statement of comprehensive income for the net bad debt expense for the year ended 31 July 20X9?

A $11,260

B $11,560

C $9,700

D $9,100 (2 marks)

QUESTION 5

When a trade discount is received from a supplier the double entry is as follows:

Dr Supplier

Cr Trade discount received

Is this statement true or false?

A True

B False (1 mark)

Page 5: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 5

QUESTION 6

On 1 August 20X8 Ernie was owed $45,300 by his credit customers. During the year Ernie’s credit sales totalled $523,720. Discounts allowed totalled $3,500, returns from customers were $2,800 and dishonoured cheques amounted to $4,800. On 31 July 20X9 Eric was owed $48,720 from his credit customers.

What was the amount received from credit customers during the year ended 31 July 20X9?

A $509,200

B $514,000

C $525,640

D $518,800 (2 marks)

QUESTION 7

Patel, a limited liability company, has provided the following details relating to motor vehicles for the year ended 31 August 20X9:

$ 1 September 20X8 Opening balance at cost 280,000 1 November 20X8 Disposals of car at cost 48,000 1 January 20X9 Purchase for cash for new vehicles 60,000 1 March 20X9 Acquired a new vehicle details provided are: − Part exchange allowance for an old car 18,000 − Cash paid 12,000 1 March 20X9 Cost of old car disposed 18,000

The company’s policy is to charge depreciation at 20% per year on the straight line basis, with proportionate depreciation in the years of purchase and disposal.

What should be the depreciation charge for the year ended 31 August 20X9?

A $57,200

B $59,000

C $64,400

D $57,800 (2 marks)

QUESTION 8

Which of the following is the best description of an asset?

A A resource paid for by a business

B A resource controlled by a business

C A resource owed by a business (1 mark)

Page 6: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

6 KAPLAN PUBLISHING

QUESTION 9

A business carried out an inventory count on 8 August 20X9 and valued its inventory at cost of $17,800. During the period from 1 August and 8 August the following transactions took place:

Purchases $5,400

Sales $8,160

The mark up was 20% on cost.

What is the correct value of closing inventory at cost at 31 July 20X9?

A $19,200

B $20,560

C $18,928

D $16,400 (2 marks)

QUESTION 10

The following sales tax account has been provided by Bobby for the quarter ended 31 July 20X9. The account was prepared by an inexperienced book keeper.

Sales tax account

Bal b/d (amount owing to the tax authority)

45,800

Bank (part payment on account to the tax authority) 20,800

Sales (sales tax element) 587,500 Purchases (sales tax element) 564,000 Purchases returns (sales tax

element) 19,975

–––––– Bal c/d 28,525

–––––– 633,300

–––––– 633,300

–––––– Bal b/d 28,525

What is the correct sales tax balance for the quarter ended 31 July 20X9?

A $21,475 debit

B $68,475 credit

C $28,525 credit

D $48,500 credit (2 marks)

Page 7: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 7

QUESTION 11

A company had provided income tax for the previous year of $80,000 however, it paid income tax of $77,000 this year. At the year-end, the company estimates that $76,000 is owed in relation to income tax for the current year.

What amount will be shown in the statement of comprehensive income for the current year-end in respect of the income tax?

A $79,000

B $76,000

C $73,000

D None of the above (2 marks)

QUESTION 12

Which of the following are computer packages?

(i) Database

(ii) Word processing

(iii) Spreadsheets

(iv) Memory stick

A All the above

B None of the above

C (i), (ii) and (iii)

D (i), (ii) and (iv) (2 marks)

QUESTION 13

A and B are in partnership, sharing profits in the ratio 1:1 and compiling their financial statements to 30 June each year.

On 1 January 20X9 C joined the partnership and it was agreed that the profit-sharing arrangement should become A 50%, B 30% and C 20%.

The profit for the year ended 30 June 20X9 was $1,440,000. Assume that the profit accrues evenly over the year.

What is A, B and C’s total profit share for the year ended 30 June 20X9?

A B C

A $720,000 360,000 360,000

B $720,000 576,000 288,000

C $720,000 360,000 144,000

D $720,000 576,000 144,000 (2 marks)

Page 8: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

8 KAPLAN PUBLISHING

QUESTION 14

Below are the extracts of the trial balance of Caroline, a limited liability company, for the year ended 31 August 20X9:

DR CR

Motor vehicles cost $80,000

Accumulated depreciation $28,800

The company depreciates motor vehicles at 20% per annum on a reducing balance basis.

What should the depreciation charge for the year ended 31 August 20X9 be.

(1 mark)

QUESTION 15

Which of the following are books of prime entry?

(i) Cash book

(ii) Bank statements

(iii) The journal

(iv) Sales returns day book

(v) The general ledger

A All the above

B (i), (ii) and (iii) and (iv)

C (i), (iii) and (iv) and (v)

D (i), (iii) and (iv) (2 marks)

QUESTION 16

Which of the accounting standards listed below give guidance on tangible and intangible non-current assets?

A IAS 2 and IAS 16

B IAS 7 and IAS 10

C IAS 16 and IAS 38

D IAS 2 and IAS 7 (2 marks)

Page 9: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 9

QUESTION 17

A company has provided the following balances:

Payables ledger control account $18,000

List of total individual payables $18,200

The book keeper has also provided the following additional information:

(i) A credit purchase invoice amounting to $100 was not recorded in the books.

(ii) The purchase day book was undercast by $200.

(iii) Debit balances totalling $100 were not included in the list of the total individual payables balances.

What is the corrected balance on the payables ledger control account and the list of total individual payables balances?

Payables ledger Total individual control account payables balances

A $18,300 $18,300

B $18,300 $18,200

C $17,900 $18,400

D $18,200 $18,200 (2 marks)

QUESTION 18

Which of the items below would be included in the statement of changes in equity?

(i) Opening balance of the share premium account.

(ii) The profit after tax.

(iii) Dividends proposed after the year end,

(iv) Revaluation surplus.

(v) Issue of shares.

A All the above

B (i), (ii) and (iii) and (iv)

C (i), (ii) and (iv) and (v)

D (i), (iii) and (iv) and (v) (2 marks)

Page 10: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

10 KAPLAN PUBLISHING

QUESTION 19

The following errors have been discovered in the records of Ami, a limited liability company:

(i) The rent account was credited with a payment of rent amounting to $3,000. The bank account was correctly recorded.

(ii) Credit sales totaling $2,000 was not recorded in the books.

(iii) A payment of $89 was correctly recorded in the bank account but was debited in the payables as $98.

What was the original suspense account figure before the above errors were discovered?

(2 marks)

QUESTION 20

Sara, a limited liability company, depreciates its plant and machinery at 20% per annum on the reducing balance, on assets held at the statement of financial position date. On 1 January 20X9 it held a machine which had cost $20,000 in the year ended 31 December 20X7. In the year ended 31 December 20X9 the company part-exchanged this machine for a new machine. The amount paid for the new machine was $17,000 and a part exchange allowance of $13,000 was allowed for the old machine.

What is the profit or loss on disposal of the old machine?

A Profit $800

B Profit $3,000

C Loss $200

D Profit $200 (2 marks)

QUESTION 21

The International Accounting Standards Council (IASC) is the supervisory body for the regulatory framework of accounting.

A True

B False (1 mark)

Page 11: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 11

QUESTION 22

William, a limited liability company, has the following building in its financial statements as at 30 June 20X9:

Cost $1,200,000 Accumulated depreciation $(300,000) ––––––––– Net book value $900,000

–––––––––

It has been decided to revalue the property to $1,800,000 on 1 July 20X9.

What is the double entry to record the above revaluation?

$

A Dr Cost 600,000

Dr Accumulated depreciation 300,000

Cr Revaluation reserve 900,000

B Dr Cost 900,000

Cr Revaluation reserve 900,000

C Dr Cost 600,000

Cr Revaluation reserve 600,000

D Dr Revaluation reserve 900,000

Cr Cost 600,000

Cr Accumulated depreciation 300,000 (2 marks)

QUESTION 23

The following items are listed in the company’s financial statements as at 31 August 20X9:

$ Payables 20,000 Cash 2,000 Buildings 80,000 Receivables 15,000 Inventory 21,000 Bank overdraft 5,000

What is the capital at 31 August 20X9?

(2 marks)

Page 12: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

12 KAPLAN PUBLISHING

QUESTION 24

Which of the following statements is incorrect?

A Under the consistency concept items must always be treated in the same way even if circumstances change

B According to the money measurement concept only items which can be objectively expressed in monetary terms should be included in the financial statements

C The prudence concept involves an exercise of caution when making estimates in financial statements. It therefore ensures that assets and income are not overstated and losses and liabilities are not understated

D According to the materiality concept an item is material if its omission or misstatement might reasonably be expected to influence the economic decisions of the users

(2 marks)

QUESTION 25

A company made a profit of $250,000 for the year after charging depreciation of $28,000. During the year it paid off a loan of $50,000, made payments for non-current assets totalling $90,000, issued shares for $100,000 and had an increase in inventories of $18,000.

What will be the increase in cash and bank balances at the end of the year?

A $256,000

B $192,000

C $220,000

D $260,000 (2 marks)

Page 13: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 13

QUESTION 26

Handy, a limited liability company, has the following balances in its statement of financial position as at 30 June 20X8 and 30 June 20X9:

30 June 20X9

30 June 20X8

$ $ Current liabilities Taxation payable 16,000 10,000 Proposed dividends (declared before the year end) 4,000 2,000 Non-current liabilities 10% Loan notes 70,000 70,000 Capital and reserves Accumulated profits 105,000 55,000

What is the profit before interest and tax of Handy for the year ended 30 June 20X9?

A $82,000

B $78,000

C $77,000

D $28,000 (2 marks)

QUESTION 27

An error of original entry will result in the disagreement of the trial balance totals.

Is this statement true or false?

A True

B False (1 mark)

QUESTION 28

X, Y and Z are in partnership. The profit of the partnership for the year ended 31 July 20X9 is $378,000. The partnership agreement provides that the partners are entitled to a salary and interest on capital as follows:

Salary Interest on capital X $12,000 $5,000 Y $18,000 $7,000 Z $24,000 $12,000

The profit sharing ratio for X, Y and Z is 5:4:1. The partnership agreement states that X is entitled to a guaranteed minimum profit share of $170,000. What is the total share of the profits that each partner is entitled to for the year ended 31 July 20X9?

X Y Z

A $167,000 $145,000 $66,000

B $170,000 $147,400 $66,600

C $170,000 $145,000 $66,000

D $170,000 $142,600 $65,400 (2 marks)

Page 14: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

14 KAPLAN PUBLISHING

QUESTION 29

Which of the following statements is correct?

A All research and development expenditure must be written off in the period during which the expenditure is incurred

B Dividends proposed after the year end must be accrued in the accounts

C Contingent liabilities should always be provided in the accounts

D A change in an accounting policy will result in a prior period adjustment (2 marks)

QUESTION 30

The following information relates to Barbara’s business for the year ended 30 June 20X9:

$ Sales 800,000 Returns outwards 12,000 Opening inventory 60,000 Carriage outwards 3,800 Carriage inwards 4,500 Purchases 780,000 Goods withdrawn by the owner 1,600 Closing inventory 62,000 Discounts received 5,500

What is the expected gross profit for the year?

A $31,100

B $7,100

C $62,455

D $70,000 (2 marks)

QUESTION 31

It has been established that there is a possibility of a transfer of economic benefits to settle a contingent liability. How should this be dealt in the financial statements?

A It should be ignored

B It should be disclosed (1 mark)

Page 15: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 15

QUESTION 32

Loon and Noon are in partnership sharing profits and losses in the ratio of 2:3. Moon joins the partnership on 1June 20X7and it was decided to make the following changes:

• The profit share ratio is to be revised to 4:4:2.

• Property to be revalued upwards by $80,000.

• Goodwill to be valued at $35,000. It has been decided to maintain the goodwill account after the admission of Moon.

Noon’s capital account had a balance of $70,000 credit before the above changes.

What is the capital account of Noon after the above adjustments?

A $125,000 Cr

B $105,800 Cr

C $116,000 Cr

D $139,000 Cr (2 marks)

QUESTION 33

Sarah, a limited liability company, has a balance on a development project at the beginning of the year amounting to $720,000. During the year ended 30 June 20X9 further costs of $120,000 were incurred. The project was completed during the year and production and sales started on 1 April 20X9. The project is expected to last for 4 years from 1 April 20X9.

How much of the costs should be charged to the statement of comprehensive income (SOCI) for the year ended 30 June 20X9 and how much should be capitalised in the statement of financial position (SOFP) as at 30 June 20X9?

(SOCI) (SOFP) $ $

A 210,000 630,000

B 45,000 795,000

C 52,500 785,500

D None 840,000 (2 marks)

Page 16: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

16 KAPLAN PUBLISHING

QUESTION 34

On 31 August, the cash book balance of Alex, a limited liability company, shows a credit balance of $550. It was discovered that bank charges of $80 and an amount received from a customer directly into the bank of 400 was not yet recorded. There were unpresented cheques of $800 and lodgements/deposits of $300 at the year end. The bank had deducted in error from Alex’s account a payment of $60 relating to another customer.

What is the balance in the bank statement?

A $210 Cr

B $670 Dr

C $1,310 Cr

D $230 Dr (2 marks)

QUESTION 35

Hilary, a limited liability company, has the following capital structure:

$ 100,000 Ordinary shares of 50c each 50,000 10,000 20% Preference Shares of $1 each 10,000

The preference shareholders have had their dividend paid during the year.

The following information has been provided for ordinary shareholders:

(i) Dividends declared before the year end was 5 cents per share.

(ii) Dividends declared after the year end was 3%.

What are the dividends that should be included in the statement of changes in equity (SOCIE) and the statement of financial position (SOFP) for the year ended 31 March 20X9?

(SOCIE) (SOFP) $ $

A 8,500 6,500

B 7,000 5,000

C 7,000 6,500

D 2,000 Nil (2 marks)

Page 17: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 17

QUESTION 36

Yvette, a limited liability company, has had the following changes in its share capital and loans during the year.

(i) A bonus issue of $70,000.

(ii) A rights issue of $120,000.

(iii) A repayment of $80,000 10% loan notes.

(iv) A receipt of $130,000 8% loan notes.

What amount would appear under the financing activities heading of the statement of cash flows?

A $240,000 net inflow

B $120,000 net inflow

C $50,000 net inflow

D $170,000 net inflow (2 marks)

QUESTION 37

At 1 September 20X8 a company had a receivables balance of $540,000 and an allowance for receivables of $5,400. During the year ended 31 August 20X7 credit sales were $2,500,000 and amounts received from credit customers totalled $2,485,000. It was decided to adjust for the following:

(i) To write off debts of $55,000.

(ii) To make a specific allowance of $10,000.

(iii) To make a general allowance of 10%.

What figure will appear in the company’s statement of financial position for net receivables at 31 August 20X9 after adjusting for the above items?

A $500,000

B $490,000

C $441,000

D $450,000 (2 marks)

QUESTION 38

IAS 2 states that inventory should be valued at the lower of cost and net realisable value.

Which of the following concepts is this in accordance with?

A Accruals

B Prudence (1 mark)

Page 18: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

18 KAPLAN PUBLISHING

QUESTION 39

Ban, Can and Dan are in partnership. During the year ended 30 June 20X9, the partnership made a profit of $207,000. The partnership agreement stated that profits were to be shared in the ratio of 2:2:1 after providing for interest on capital of 10% for each of the partners.

Other information provided is as follows:

Ban Can Dan $ $ $ Capital balances b/f 30,000 25,000 15,000 Current balances b/f 3,000 Dr 5,800 Cr 3,200 Cr Drawings during the year 48,000 56,000 42,000

What is the balance on Ban’s current account at 30 June 20X9?

A $32,000 Cr

B $32,000 Dr

C $38,000 Cr

D $38,000 Dr (2 marks)

QUESTION 40

Which of the following best describes an accrued expense?

A An expense that has been incurred in this accounting period but will be paid for in the next accounting period

B An expense that has been incurred in this accounting period but that was paid for in the last accounting period (1 mark)

QUESTION 41

The following details have been provided for a business:

$ Opening payables 35,800 Credit purchases 400,000 Cash purchases 58,000 Payments to credit suppliers 348,000 Discounts allowed 32,000 Discounts received 28,000 Sales ledger contra 14,000 Returns inwards 3,500 Returns outwards 5,800

What should be the closing balance on the payables control account at the year end?

A $38,300 credit

B $68,000 credit

C $40,000 credit

D $98,000 credit (2 marks)

Page 19: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 19

QUESTION 42

The statement of financial position of Robert, a limited liability company, as at 31 December 20X8 and 20X9 showed proposed dividends declared before the year end of $60,000 and $65,000 respectively. The statement of changes in equity for the year ended 31 December 20X9 showed dividends of $100,000.

How much should be shown in the statement of cash flows of Robert for the year ended 31 December 20X9 relating to the dividends paid?

A $100,000

B $40,000

C $105,000

D $95,000 (2 marks)

QUESTION 43

At 30 April 20X9 James had three items of closing inventory that had been valued as follows:

Cost NRV Product A $560 $550 Product B $1,400 $1,600 Product C $320 $296

The correct value of closing inventory to be included in James financial statements should be:

(1 mark)

QUESTION 44

A company’s trial balance totals were:

Debit $42,333

Credit $27,689

A suspense account was opened for the difference.

Which one of the following errors would have the effect of increasing difference when corrected?

A No entry has been made in the accounting records for cash sales of $2,795

B The cash in hand balance of $1,000 was omitted from the trial balance

C $8,000 paid for a motor van has been correctly recorded in the cash book and debited to the motor expenses account

D $6,000 received from a credit customer has been correctly recorded in the cash book and debited to the payables account (2 marks)

Page 20: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

20 KAPLAN PUBLISHING

QUESTION 45

During the year ended 31 March 20X9, Jonathan recorded a sales return of $686 in the sales returns day book as $868. Control accounts are maintained as integral part of double entry by the business.

What is the journal entry required to correct this error?

Debit Credit

A Sales ledger control $182 Sales returns $182

B Sales returns $182 Sales ledger control $182

C Suspense $182 Sales returns $182

D Sales returns $182 Suspense $182 (2 marks)

QUESTION 46

The following information relates to a business for the year ended 31 March 20X9:

Purchases $170,000 Opening inventory $20,000 Closing inventory $18,000 Sales returns $4,000 Purchase returns $3,500 Carriage inwards $600 Carriage outwards $200 Goods withdrawn by the owner $700

What is the cost of sales for the business for the year ended 31 March 20X9?

A $169,100

B $168,000

C $168,400

D $170,400 (2 marks)

Page 21: ACCA F3 INT Revision Mock - Questions J11

Revision Mock Questions

KAPLAN PUBLISHING 21

QUESTION 47

Which of the following is correct?

A A debit entry increases assets

A debit entry increases drawings

A credit entry decreases profit

B A credit entry decreases liabilities

A credit entry increases capital

A credit entry increases profit

C A credit entry decreases assets

A debit entry increases drawings

A debit entry increases profit

D A credit entry increases liabilities

A credit entry increases capital

A credit entry increases profit (2 marks)

QUESTION 48

Which of the following lists comprises the qualitative characteristics that financial information should possess according to the IASB's Framework for the Preparation and Presentation of Financial Statements?

A Relevance, reliability, comparability, understandability

B Relevance, reliability, prudence, understandability (1 mark)

QUESTION 49

Andrew’s business is renting premises at a cost of $24,000 per annum. However, on 1 July 20X9 the landlord increased the rent by 10%. At 1 January 20X9 Andrew had a prepaid expense of $750 in respect of rent, and during the year ended 31 December 20X6 Andrew had paid a total of $25,700 to his landlord.

What amounts will appear in the statement of comprehensive income (SOCI) for the year ended 31 December 20X9, and in the statement of financial position (SOFP) as at 31 December 20X9 in respect of rent?

(SOCI) (SOFP)

A $25,200 $1,250 accrual

B $25,200 $1,250 prepayment

C $25,700 $1,250 prepayment

D $24,850 $750 prepayment (2 marks)

Page 22: ACCA F3 INT Revision Mock - Questions J11

ACCA F3 (INT) Financial Accounting

22 KAPLAN PUBLISHING

QUESTION 50

At 30 April 20X9, Phoenix, a limited liability company, was being sued by an ex-employee for wrongful dismissal. Phoenix has been advised that the claim is 95% likely to succeed, and that damages of $200,000 will be payable if the claim does succeed.

How should this matter be treated in the financial statements of Phoenix for the year ended 30 April 20X9?

A The matter should be ignored

B The matter should be disclosed by note

C A provision should be made for $190,000

D A provision should be made for $200,000 (2 marks)