FA mock exam

The following is an extract from the equity section of the statements of financial position of ink co as at 31 December 20x0

Share capital( $1 shares) - 100,000

Share premium - 50,000

During the year ended 31 December 20x1, ink issued 100,000 $1 ordinary shares for $4 each

What was the balance on the share premium account as at 31 December 20x1?

• $50,000

• $350,000

• $450,000

• $150,000

Which TWO of the following errors would result in a trial balance imbalance?

• The discounts received balance was listed as a debit on the trial balance

• The dividend paid ledger account balance of $970 was recorded in the trial balance as $790

• A contra settlement was recorded in the receivables and payables ledgers but not in the control accounts

• Capital expenditure was posted to repairs

A business paid insurance premiums of $12,500 during the year ended 30 June 20x3. at 30 June 20x2 there was an insurance prepayment of $600 and at 30 June 20x3 there was a prepayment of $800

What was the insurance expense for the year ended 31 March 20x3?

• $14,700

• $11,400

• $12,300

• $13,200

At 30 September 20x3, a business wrote off two debts of $750 and $1,135 respectively. it also required an allowance for receivables of $6,675. The allowance for receivables balance at 1 October 20x2 was $7,650.

What was the irrecoverable debt expense for the year ended 30 September 20x3?

• $910

• $510

• $420

• $356

A sole trader purchased a machine for $750 for long-term use. He incorrectly posted the following double-entry:

Dr Repairs expense $750

Cr Bank $750

What type of error is this?

• Extraction error

• Error of omission

• Error of commission

• Error of principle

Which of the following statements in relation to bank reconciliations is true?

• Unpresented Cheques are added to the bank statement.

• Dishonoured cheques from customers are adjusted for by debiting the cash book.

• Unrecorded direct debits are adjusted for by crediting the cash book.

• Bank charges on the bank statement but not in the cash book are ignored in the reconciliation

Slouch Co bought a new building on 1 January 20x2 for $400,000. it was decided to depreciate the building over fifty years on a straight line basis with nil estimated residual value. on 31 December 20x9, the building was revalued to $850,000.

What was the revaluation surplus recorded in other comprehensive income for the year ended 31 December 20x9?

• $617,000

• $514,000

• $765,000

• $346,000

A business makes all Of its sales on credit.

At 1 January 20X3,there were receivables brought forward from the previous year of

$65,000. During 20X3, cash of $182,500 was received from customers and irrecoverable

debts of $1,250 were written off. It was also agreed with a credit customer, who was also a supplier, that that an amount of $1,700 would be offset against the balances due from each

other. Receivables at 31 December 20x3 were $68,500.

What was the value Of sales made during 20X3?

• $188,950

• $181,950

• $186,000

• $187,250

Jake’s bank statement shows an overdrawn balance of $865. This does not agree to the cash book. The following reconciling differences were noted:

(i) There are unpresented cheques of $265.

(ii) The bank debited $325 from Jake’s account instead of from June’s account.

(iii) Jake has made no accounting entries for bank charges of $35.

What was the balance on the cash book when errors and omissions have been corrected?

• $805 debit

• $805 credit

• $770 credit

• $770 debit

Which of the following statements is NOT true?

• The extended trial balance is not a book of prime entry.

• Only cash purchases are recorded in the purchases day book.

• Contra entries agreed with credit customers who are also suppliers affects both the individual payables and receivables ledger account balances.

• Settlement discount received is included as part of a trade payables’ control account.