3. CPA Financial Accounting & Reporting Module 3

Which of the following are examples of current assets? I.     Prepayments, II.    Cash equivalents, III.  Manufacturing licences, IV.  Income received in advance, V.   Property, plant and equipment

• A IV only
• B     I and II only
• C    I, II and III only
• D    I, II, III, IV and V

Which of the following must be disclosed in the statement of profit or loss and other comprehensive income? I.     Tax expense II.    Analysis of expenses, III.  Net profit or loss for the period

• A I and II only
• B     I and III only
• C    II and III only
• D    I, II and III

Which of the following must be disclosed separately on the face of the statement of financial position??

• A Accruals and prepayments
• B     Revaluation surplus
• C    Deferred tax liabilities and deferred tax assets
• D    Bank overdraft

In the current financial year, Natamo has raised a loan for $3 million. The loan is repayable in 10 equal half yearly instalments. The first instalment is due six months after the loan was raised. The loan will be reported in Natamo's next financial statements:

• A As capital.
• B     As a current liability.
• C    As a non-current liability.
• D    As both a current and a non-current liability.

When reporting profit for a period, companies are required to ensure that income and expenses are correctly classified. Which of the following expenses will not be included in the calculation of profit before tax?

• A Interest payable
• B     Reorganisation costs
• C    Depreciation expense
• D    Profits attributable to non-controlling interests

The draft statement of profit or loss and other comprehensive income of Thermin for the year ended 30 November 20X4 shows a profit before tax of $325 800. This includes: 1.    A restructuring charge of $85 000; and 2.    An adjustment of $42 000 to reduce the value of opening inventory. An error at the previous year end had led to the inventory being over-valued. What is the correct profit before tax for the year ended 30 November 20X4?

• A $283 800
• B $325 800
• C $367 800
• D $452 800

In the last financial year Cuchabee issued an invoice for $28 900 for the sale of inventory which had cost $27 600. What was the effect of this transaction on the company's assets, liabilities and capital and reserves?

• Assets increased, Liabilities reduced, Capital & reserves Increased
• Assets increased, Liabilities unchanged, Capital & reserves Increased
• Assets reduced, Liabilities unchanged, Capital & reserves reduced
• Assets unchanged, Liabilities reduced, Capital & reserves increased

Which of the following is reported as other comprehensive income?

• A A dividend
• B     The proceeds of a share issue
• C    The profit on sale of a property
• D    A surplus on revaluation of a property

Which of the following is true concerning the statement of changes in equity?

• A It reports all realised profits and losses only
• B     It does not include revaluation surpluses
• C    It includes other comprehensive income
• D    All of the above

D Co's transactions and results for the period to 31 December 20X9 are shown below: Profit for the period $29m, Surplus on property 1 revaluation $14m, Deficit on property 2 revaluation $-7m, Issue of share capital $1m, Property 2 had previously been revalued upwards by $10m. What amount would appear in the statement of changes in equity as total comprehensive income for the period?

• A    $30m
• B     $36m
• C    $37m
• D    $43m