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F3_Mocktest2_toprint

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F3_Mocktest2_toprint

    F3_MOCK-TEST-2

    Q1. A company receives rent from a large number of properties. The total received in the year ended 31 October 2002 was $481,200. The following were the amounts of rent in advance and in arrears at 31 October 2001 and 2002:

     31 October 2002 ($)

    31 October 2001 ($)

    Rent Received in advance 28,700 31,200

    21,200 18,400 Rent in arrears (all subsequently

    received)

    What amount of rental income should appear in the company’s income statement for the year ended 31 October 2002?

    $475,900

    $460,900

    $501,500

    $486,500

    Q.2 Which of the following is not a reason for the difference in the balance as per bank statement and the bank balance on the cashbook after the cashbook has been updated for items found on bank statement?

    Errors made by bank

    Lodgements not yet credited by the bank

    Credit transfers

    Unpresented cheques

Q.3 Which of the following is a current liability?

    Accrued Income

    Petty Cash

    Bank Overdraft

    Trade Receivables

    Q.4 Grand International made a net profit of $66,880 for the year ended 31 December 20X7. Later on it was found out that payment made for office equipment purchased by the company was $14,400 had been erroneously debited to office expenses account. Office equipment is depreciated at 10% per annum on a straight line basis. Even in the year of acquisition, a full year’s charge for depreciation is made. The net profit after adjustment of the error will be _________

    $96,100

    $70,100

    $79,840

    $91,600

    Q.5 LMN plc, a supplier of component X used by ABC plc sent its statement of account to ABC plc. As per the statement the balance due to the supplier is $7,160. The amount due is $3,312 as per ABC plc payables ledger account. A closer examination highlighted that LMN plc has not taken into account a cash amount of $3,264 paid by ABC plc. Moreover, a discount of $32 withdrawn by LMN plc has not been adjusted in ABC’s accounts How much difference still remains after the above gaps have been adjusted?

    $770

    $850

    $552

    $930

    Q.6 All of the following is reasons for providing for depreciation of fixed assets EXCEPT:

    Upward movement in the value of assets

    Wear and Tear

    Depletion

    Obsolescence

    Q.7 The cash book of Susan shows her to be ?2,030 overdrawn. On a closer examination it was found that a standing order payment for ?365 had been

    entered in the cash book twice. In addition, there was a dishonoured customer’s cheque for ?275 that had been debited in the cash book rather than credited.

What is the correct overdraft position of Susan?

    ?1,875

    ?2,015

    ?2,215

    ?2,325

Q.8 Which of the following is not depreciated?

    Buildings

    Land

    Machines

    Office Furniture

    Q.9 Which method of depreciation also takes into account interest on capital on capital expended?

    Annuity method

    Sum of digits method

    Reducing balance method

    错误;嵌入对象无效。Straight line method

    Q.10 The trial balance of XYZ plc did not agree. The company opened a suspense account and transferred the difference to the account. At a later date, the following errors were discovered:

    utility bill of ?320 has been recorded in the utility account as ?230

What was the original balance of the suspense account?

    Debit Pounds 120

    Credit Pounds 120

    Debit Pounds 145

    Credit Pounds 145

    Q.11 The allowance for receivables for ABC plc was $23,400 on 30 September 2007. At 30 September 2008 trade receivables stood at $310,200. The company decided to write off debts for $22,200. Based on past year events, the company also decided to adjust the allowance to 5% of trade receivables. What amount should appear in the Income Statement of ABC plc for the year ended 30 September 2008 in relation to these items?

    $41,000

    $13,200

    $14,000

    $13,850

    Q.12 As on 1 Jan 2007, the provision for doubtful debtors stood at ?5,000. The firm wants to maintain this provision at 5% of outstanding debtors at the end of the year. On 31 December 2007, outstanding debtors total ?70,000. What is the correct entry in the accounts to record this?

    Dr. Profit & Loss ?3,500, Cr. Provision for doubtful debts ?3,500

    Dr. Provision for doubtful debts ?3,500, Cr. Profit & Loss ?3,500

    Dr. Profit & Loss ?1,500, Cr. Provision for doubtful debts ?1,500

    Dr. Provision for doubtful debts ?1,500, Cr. Profit & Loss ?1,500

Q.13 Which of the following is true about Profit and Loss Account?

    It depicts the state of affairs in a company as on a particular date

    It is a snapshot of a company’s overall worth

    It is a report of the company’s profit on the sale of goods or the provision of their service over a trading period

    It is a is a statement of the total assets and liabilities of the company

Q.14

    On 1 January 2007, John had prepaid electricity bill of ?200. He paid ?1,200 on 1 March 2007 for the year ended 28 February 2008. How much should be charged to the Profit & Loss account for the year ended 31 December 2007?

    ?800

    ?1,000

    ?1,200

    ?1,400

Q.15 The importance of accruals concept is:

    Assets is equal to cash received minus cash paid

    Assets is equal to revenues earned minus expenses incurred

    Net Profit is equal to cash received minus cash paid

    Net Profit is equal to revenues earned minus expenses incurred

Q.16 The statement of changes in equity will include all of the following EXCEPT:

    Amortization of capitalized development costs

    Profit for the financial year

    Surplus on revaluation of non-current assets

    Dividends paid

Q.17

    How should deposits in transit be treated while reconciling the ending cash balance as

    per the bank statement with the correct adjusted cash balance?

    Deposits in transit should be ignored

    Subtracted from the balance as per the company’s books

    Subtracted from the balance as per the bank statement

    Added to balance as per the bank statement

Q.18 Your company has a debt-to-equity ratio of 1.5. The industry average is 1.3.

    What will it convey about the company to the outsiders?

    The company has high creditworthiness

    The creditors of the company are secure

    The company has a higher financial risk than the industry average

    The company has less liquidity than other firms in the industry

Q.19

    There is a net increase of ?400,000 in net fixed assets over the last year. Other details

    are as follows:

     ?4,550,000

     purchased ?1,000,000

What was the firm’s depreciation expense over the period?

    ?500,000

    ?550,000

    ?650,000

    ?1,350,000

Q.20. In which of the following situations will the gross profit margin remain

    unchanged, but the net profit margin will decline over the same period?

    Increase in sales is much more than increase in expenses

    Increase in the rate of tax

    Increase in cost of goods sold is much more than increase in sales

    Decrease in dividends

Q.21

    Unicorn plc has the following month-end balances:

What should be the correct ending cash balance?

    ?7,497

    ?7,313

    ?6,417

    ?6,313

Q.22

    As at 31 December 2006, the balance on the provision for doubtful debts account was ?1,100. However, as at 31 December 2007, the balance on the provision for doubtful debts account stood at ?1,700 and outstanding debtors at ?17,600. What will be the net value of debtors shown on the balance sheet as on 31 December 2007?

    ?15,900

    ?16,500

    ?17,000

    ?17,200

    Q.23 In a cash flow statement, business transactions are classified into operating, investing, and financial activities. Which one of the following can be classified as cash flow from financing activity?

    Proceeds of issue of shares

    Payment of tax

    Interest received

    Payment to acquire fixed assets

    Q.24 ABC plc returned defective goods worth ?530 to its supplier. This was incorrectly recorded as ?350 in the ledger accounts. To correct the error what

    journal entry will you pass?

    Dr Suspense Account Pounds 180, Cr Creditors Account Pounds 180

    Dr Creditors Account Pounds 180, Cr Suspense Account Pounds 180

    Dr Purchases Account Pounds 180, Cr Suspense Account Pounds 180

    Dr Creditors Account Pounds 180, Cr Purchases Returns Account Pounds 180

Q.25

    All of the following statements are correct EXCEPT:

    Carriage inwards and carriage outwards are both debit balances

    Returns inwards and returns outwards are both debit balances

    Purchases have a debit balance and sales have a credit balance

    Assets have a debit balance and liabilities has a credit balance

Q.26

    Pat and Peter Inc. has a 12 percent return on total assets. Total assets have a value of

    $240,000. Net profit margin is 5 percent. What are its sales?

    ?765,000

    ?576,000

    ?657,000

    ?756,000

Answer: 2

Q.27

    Susan is preparing a cash flow statement using indirect method and starting from an operating profit of ?6,912. Which of the following is correct in her approach?

    Depreciation charges should be added to operating profit

    Increase in inventory should be added to operating profit

    Increase in accounts payable should be deducted from operating profit

    All of the above

Q.28

    Sarah has debtors of ?82,500 as at 31 March. After reviewing the debtors, Sarah decided to write off the debt of Susan ?1,000, Betty ?500, Mathew ?2,000 and John ?1,250. Besides, Sarah also wants to provide against a specific debt of ?250 and make a general provision at 2% of debtors. At present the provision for doubtful debts account is ?2,000. Sarah also received ?300 from a debt that had been previously been written off. What amount should be charged to the income statement in respect of bad debt expense?

    ?4,050

    ?4,250

    ?4,450

    ?4,650

Q.29

    _____________ ratios indicate the extent to which the firm is financed with debt.

    Liquidity ratios

    Activity ratios

    Debt ratios

    Profitability ratios

Q.30

    Calculate the amount of insurance that should be included in the Profit & Loss account for the year ending 31 December 2006.

    ; ?5,000

    ?6,200

    ?6,600

    ?7,800

Q.31

    Which of the following is an accounting concept?

    Consistency

    Money Measurement

    Conservatism

    Disclosure

Q.32

    Which of the following statement about a journal is correct?

    For a given journal entry, debits always exceed credits

    For a given journal entry, credits always exceed debits

    A journal is a secondary book of accounts

    In a journal transactions and events are converted into debitcredit format

Q.33 What accounting concept does a person violate if he takes personal

    costs as business costs?

    Materiality concept

    Going Concern Concept

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