Professional Documents
Culture Documents
Fa2 Mock 3 Questins-1
Fa2 Mock 3 Questins-1
(1) The trial balance includes a list of all transactions which took place in the year
(2) The trial balance is part of the double entry system
(3) All bookkeeping errors can be identified by reviewing the trial balance
1 and 3
2 and 3
None of the above
1 and 2
$
Dr Cash 850
Cr Trade receivables 850
Which of the following is the correct narrative for the journal entry?
Cash receipt from customer
Cash payment to supplier
Cash purchases
Cash sales
Ai and Bhavik are in partnership sharing profits equally. On 1 December 20X0 Corinne
joined the partnership and the partners agree to change the profit sharing ratio to 3:4:1
to Ai, Bhavik and Corinne respectively.
At that date the goodwill of the partnership had been valued at $16,000 and the capital
accounts are $24,000 Cr for Ai and $32,000 Cr for Bhavik. Corinne paid $4,000 into the
partnership. Goodwill will not be maintained in the accounts.
What is Ai's capital balance after Corinne had joined the partnership?
$30,000
$24,000
$26,000
$32,000
In the year ended 30 November 20X9, Karl sold a machine for $5,800. The machine
had been bought for $15,000 in July 20X5. Karl depreciates machinery at 20% per
annum on the reducing balance basis. He charges a full year's depreciation in the year
an asset is purchased, and no depreciation in the year of sale.
What was the gain or loss on disposal of the machine?
$344 loss
$344 gain
$2,800 loss
$2,800 gain
7
At 1 June 20X8, the value of Lindsay's net assets was $144,804. At 31 May 20X9 the
value was $191,779. During the year to 31 May 20X9 Lindsay introduced $52,250 of
capital and her drawings were $34,400.
What was Lindsay's profit for the year to 31 May 20X9?
$
8
Is each of the following statements about double entry bookkeeping true or false?
. True False
'Double entry bookkeeping' means that two sets of records are maintained
In double entry bookkeeping we have a basic check on the accuracy of the
entries, as the total value of the debit entries and the total value of credit entries
should be equal
10
Amy is registered for sales tax and her sales returns were $880, excluding sales tax at
17.5%.
How should this information be recorded in Amy's general ledger?
Dr Sales returns $880, Cr Trade receivables $880
Dr Trade receivables $1,034, Cr Sales returns $1,034
Dr Sales returns $880, Dr Sales tax $154, Cr Trade receivables $1,034
Dr Trade receivables $1,034, Cr Sales returns $880, Cr Sales tax $154
11
1 only
2 and 3 only
1, 2 and 3
1 and 2 only
12
Payment to a supplier:
Dr Trade payables
Cr Bank
13
$ $
Inventory at 1 December 20X8 17,558
Trade receivables 31,749
Prepayments 3,629
Trade payables 24,928
Accruals 5,291
Bank account 1,827
Receivables allowance at 1 December 20X8 683
$
14
In Benni's records for the year to 31 October 20X8, expenditure on a depreciable asset
has been incorrectly classified as an expense charged to profit or loss.
If the error is not corrected, what is the effect on Benni's profit for each of the
years to 31 October 20X8 and 31 October 20X9?
. Understated Overstated
Year to 31 October 20X9
Year to 31 October 20X8
15
Which of the following is the correct manual journal entry to recognise the
decrease in a provision, following a change in estimates?
Dr Provisions
Cr Bank
Dr Bank
Cr Provisions
Dr Provisions
Cr Operating expenses
Dr Operating expenses
Cr Provisions
16
$
Trade receivables 136,853 Dr
Allowance for irrecoverable debt 14,862 Cr
The allowance for irrecoverable debt in the trial balance relates to the amount brought
forward from the prior year. Ethel has calculated that her allowance for irrecoverable
debt in the current year should be revised to $13,854.
What should be reported for the irrecoverable debt expense in Ethel's statement
of profit or loss?
A debit of $1,008
A credit of $1,008
A debit of $13,854
A credit of $13,854
17
At 1 May 20X8, the total balance on Trevor's trade receivables ledger account was
$88,463. During the year, Trevor discovers that a debt of $563 is irrecoverable.
Which TWO of the following form the journal entry that is needed to write off the
irrecoverable debt?
Cr Trade receivables
Dr Irrecoverable debt expense
Cr Irrecoverable debt expense
Dr Trade receivables
18
Arnold claimed that some fish Burton sold to him in October 20X3 was contaminated
and made his family ill. Arnold is seeking compensation of $4,000. Burton accepted
responsibility, and offered $1,500 as compensation. Arnold rejected this offer and has
begun legal proceedings.
Burton's legal advisor expects the court case to take place in March 20X4 and has
estimated that Burton will have to pay $2,500 in compensation.
What amount should be included as a liability in Burton's statement of financial
position at 30 November 20X3?
$4,000
$1,500
$2,500
nil
19
The bank account in Trish's general ledger has a credit balance of $358.
The difference between this balance and the balance on her bank statement is due to:
(1) Trish incorrectly recorded the value of a cheque paid to a supplier for $245 as $254
(2) A lodgement of $283 has still to be credited by the bank
(3) The bank charged interest of $104 on her overdraft
What is the correct credit balance on the bank account in Trish's general ledger?
20 Tony returned items of office stationery to his supplier and his supplier sent him a credit note.
What debit and credit entries are required in Tony's general ledger?
. Trade payables Goods for resale - Office stationery
returns
Debit
Credit
21
In the year to 30 April 20X8, Tanya paid a total of $127,569 to her suppliers.
Her opening and closing balances due to suppliers and her opening and closing
inventory values were as follows:
What was Tanya's cost of sales for the year to 30 April 20X8?
$129,935
$128,673
$126,307
$127,727
22
Maureen had an opening accrual of $533 for telephone expenses. During the
year she paid invoices with a total value of $2,974. Her closing accrual was
$488.
What is the correct charge for telephone expenses in Maureen's
statement of profit or loss?
23
Nicky purchased goods with a cost of $6,000 excluding sales tax at a rate of 20%.
Nicky is not registered for sales tax.
What amount should Nicky record in their purchases general ledger account?
24
Would each of the following errors be highlighted by extracting a trial balance?
. Yes No
A suspense account has been used when recording a cash sale
Cash sales have been omitted from the records entirely
25
Dan has the following entries in their bank general ledger account:
What is the closing balance in Dan’s bank general ledger account, assuming no
further transactions occur?
26
At 1 November 20X8, Borim had an accrual of $855 for fuel. During the year to 31
October 20X9 he paid invoices with a total value of $11,874. His closing accrual at 31
October 20X9 was $962.
What is the charge for fuel in his statement of profit or loss for the year to 31
October 20X9?
27 When goods are sold on credit at a profit, what is the effect on the assets and liabilities
of the seller?
. Increase Reduce Do not change
Assets
Liabilities
28
Tomomi had an allowance for irrecoverable debts at 1 April 20X1 of $10,080. At 31
March 20X2 the allowance has been calculated to be $7,200. During the year, an
irrecoverable debt of $2,400 was incurred for which no allowance had previously been
made.
What is the impact of the irrecoverable debt expense on Tomomi’s statement of
profit or loss for the year ended 31 March 20X2?
Profit decreased by $480
Profit increased by $480
Profit decreased by $9,600
Profit increased by $9,600
29
(1) A manual journal entry for depreciation charges of $3,360 credited the carrying amount of
the asset but left the debit line item blank
(2) A manual journal entry for an accrual was debited to the correct expense account but at the
incorrect amount of $2,600 – the correct amount of $6,200 was credited to accruals
What is the balance in the suspense account, prior to correcting for the above
errors?
$6,960 debit
$240 credit
$240 debit
$6,960 credit
30
You are preparing the final accounts for a business. The cost of the items in closing
inventory is $41,875. This includes some items which cost $1,960 and which were
damaged in transit. You have estimated that it will cost $360 to repair the items, and
they can then be sold for $1,200.
What is the correct inventory valuation for inclusion in the final accounts?
$
31
Jo sold a non-current asset which had originally cost $87,600 for $43,000. At the date
of disposal, the accumulated depreciation on the asset was $45,800.
What is Jo's gain or loss on disposal of the non-current asset?
$1,200 gain
$1,200 loss
$2,800 gain
$2,800 loss
32
Jodie is carrying out a reconciliation of the bank account in her general ledger with the
balance on her bank statement. She has found the following reasons for the difference
between the two balances:
(1) Some electronic bank transfers to suppliers have not been processed by the bank
(2) The bank has made charges on Jodie's account
(3) A customer has paid $980 directly into Jodie's bank account
Which of the above items will require an entry in the general ledger?
2 and 3 only
1 and 2 only
1, 2 and 3
1 and 3 only
33
At 31 October 20X8, Dong's statement of financial position reported non-current assets
with a carrying amount of $237,950. In the year to 31 October 20X9, he scrapped
assets with a carrying amount of $12,890, and bought new assets for $19,500.
He has calculated that depreciation for the year to 31 October 20X9 is $46,900.
What value should be reported for non-current assets in Dong's statement of
financial position at 31 October 20X9?
$
34
Charlie has been in business for several years. The total balance for all capital accounts
was $13,000 on 1 January 20X9.
During the year ended 31 December 20X9, Charlie introduced further capital of $4,000
and withdrew $1,500 from the business bank account for their own personal use.
Charlie made a loss for the year ended 31 December 20X9 of $300.
What is the total amount recognised as overall capital on Charlie’s balance sheet
as at 31 December 20X9?
$2,200
$2,800
$15,800
$15,200
35
36
Vivienne and Robert are in partnership, sharing profits and losses in a ratio of 3:2. They
maintain current accounts and capital accounts. In the last year, their profit before
appropriations was $27,800. Robert is entitled to an annual salary of $3,800.
During the year Vivienne and Robert made cash drawings of $12,000 each.
What is Vivienne's share of the profit?
37
(1) Financial records include documents received by a business such as supplier invoices
(2) Businesses are legally required to keep financial records
Statement 1 only
Statement 2 only
Both statement 1 and statement 2
Neither statement 1 nor statement 2
38
39
You are preparing a client's financial statements. You know that the client's bookkeeper
has correctly completed a reconciliation of the bank balance in the general ledger to the
balance on the bank statement. The balances on the general ledger and the bank
statement are:
The difference between the two balances is explained by unpresented cheques and
outstanding lodgements.
How should the bank balance be reported in the final accounts?
As a current liability of $2,358
As a current asset of $2,358
As a current liability of $1,053
As a current asset of $1,053
40
Which of the following correctly calculates the difference between closing capital
and opening capital?
Profit + capital introduced - drawings
Profit - capital introduced - drawings
Profit + capital introduced + drawings
Profit - capital introduced + drawings
42
Aamirah reconciled a supplier’s balance within the trade payables general ledger account
balance with the supplier statement balance. The following issues have been identified:
(1) Supplier payments totalling $9,000 have been paid by Aamirah but not yet recognised by
the respective supplier
(2) Supplier invoices totalling $750 have been input twice, in error, to Aamirah’s accounting
system
(3) Credit notes received totalling $200 have been omitted, in error, from Aamirah’s
accounting system
All purchases and purchase returns are recognised in the same general ledger account
in Aamirah’s accounting system.
Which of the following manual journal entries will correct Aamirah’s ledger
accounts for the cumulative errors above?
Dr Trade payables 950
Cr Purchases 950
Dr Purchases 950
Cr Trade payables 950
Dr Purchases 1,850
Cr Trade payables 1,850
43
Ed and Hilary are in partnership. Their draft statement of profit or loss reports a profit for
the year of $75,862. Interest on drawings (Ed $2,754; Hilary $3,156) and interest on a
loan from Hilary ($1,346) have not been included in calculating this figure.
What is the correct profit for the year?
$
44
Tim has recently commenced trading. The materials he uses in his business are
subject to regular price rises. He is unsure how to value his inventory and is trying to
decide whether to use the first in, first out (FIFO) method, or the continuous weighted
average method.
Which of the following statements is CORRECT?
Tim's profit will be unaffected by the method of inventory valuation
FIFO will lead to higher reported profit
The profit will be more accurate if FIFO is used
Continuous weighted average will lead to higher reported profit
45
Aziz performed supplier statement reconciliations for all accounts on the detailed listing
of supplier balances at 31 March 20X9. The trade payables general ledger account shows
a balance of $131,500 at that date. Aziz identified the following reconciling items:
(1) A supplier invoice totalling $1,000 was incorrectly input to the purchases module of the
computerised accounting system as $10,000
(2) Credit notes totalling $6,580 were received during the financial year but not recognised in
the computerised accounting system
(3) A supplier statement showed an invoice for $4,500 but Aziz has not received the goods
46
2 and 3 only
1 and 3 only
1 and 2 only
1, 2 and 3
47
Which of the following would all be presented on the same side of the trial
balance?
Property, inventories, cost of sales and administrative expenses
Trade payables, accruals, drawings and capital introduced
Discounts received, allowance for receivables, inventories and sales
Inventories, bank overdraft, trade receivables and prepayments
48
During the year, Reyes posted a manual journal entry which debited purchases by the
correct amount of $3,920 but then also debited trade payables using the incorrect
amount of $3,560. He did not process a credit side on the manual journal entry.
What is the manual journal entry required to correct both errors made above?
Dr Suspense account 7,480
Cr Trade payables 7,480
49
During the period, Alisa has paid input sales tax of $450 on her purchases and charged
output sales tax of $300 on her sales.
50
Slava input a supplier invoice for $590 to the purchases module of her computerised
accounting system as $950.
What type of error is this?
Error of principle
Error of commission
Error of capital
Error of original entry