The statement of financial position of a company as at 31 December 20X6 shows the following.

Buildings $

Cost 90,000

Less: Accumulated depreciation 36,000

Carrying amount 54000

On 1 January 20X7 the building were revalued to $ 150,000 but their remaining useful life was not charged it was decided to incorporate this revaluation into the financial statements. The company has been depreciating buildings over 50 year on a straight –line basis.

What is the deprecation charge for the year ended 31 December 20X7?

Vinnie co commenced a development project on 1 January 20X5. During the year ended 31 December 20X5, material costing$ 20,000 were used on the development a member of staff was hired on a salary of $15,000per annum on January 20X5 to work exclusively on the development.

If the capitalization criteria in IAS 38 Intangible Assets are met, what amount for development cost should be capitalized by Vinnie co in 20X5?

Which of the followings lists includes only items that would appear on the debit side of the accounts payables ledger control account?

Glow Co, a manufacturer started trading on 1 January 20X5 and has following information in relation to the cost of inventories for the ended 31 December. $

Raw materials purchased 150,000

Direct labor 75,000

Production overheads 50,000

General administration costs 50,000

Units produced 13,000 units

At 31 December 20X5, there was no work –in –progress 10% of the raw materials are still in inventory at the year end there are 2,000 completed unit in inventory at the end these units will be sold at a profit.

At what value will finished goods inventory be reported at 31 December 20X5?

Jeff’s receivables control account at the year end is shown below:

$ $

Balance b/f 25,650 cash 36,860

Sales 43,890 contra 1,500

Jeff has not yet recorded irrecoverable debts of $ 4,500 of which $ 2,000 had a specific allowance made for it at the start of the year. His allowance for receivables at the year end is $8,300

What balance should be extracted from the receivables control account into Jeffs’ trial balance at the year end?

A business preparing its accounts for the year to 31 January pays rent quarterly in advance on 1 January, 1 April, 1 July and 1 October each year.

After remaining unchanged for some years, the rent was increased from $ 24,000 per year to $ 30,000 per year as from 1 July 20X6.

What would be the figure for rent expense which should appear in the statement of profit or loss for the year ended 31 January20X7?

Which of the following correctly describes the purpose of a suspense account?

Which of the following statements correctly explain why company managers calculate and interpret ratios?

1) To check that the information in the financial statements is completely accurate

2) To monitor key performance areas in the business

3) To check that individual business units are performing as expected

Annie does not keep detailed accounting records. Her opening inventory was $17,200 and her closing

Inventory was $14,800 during the year purchases were $122,00 and purchase returns were $2,800.

Annie’s mark up on cost is 20%

What are Annie‘s sales for the year?

A trade payables control account contains the following entries in the year ended 31 December 20X1.

Bank payments 70,658

Credit purchase 79,084

Returns outwards 3,815

Discount received 450

Contra with sales ledger 1,200

Closing balance as at 31 December 20X1 12,011

There are no other entries in the account.

What was the opening balance on trade payable control account brought forward at 1January 20X1?

Which of the following are ADVANTANGES to the owner of an entity operating as an unincorporated business as opposed to an incorporated business?

1) Legal separation of the entity from the owners

2) Unlimited liability

Burton is reviewing his receivables at the end of the financial year. A receivable of $300 will need to Be written to their inability to pay. He has also concluded that an allowance for receivables of $ 3,800 will be required the allowance for receivables last year was $4,000.

What should be the total charge to the statement of profit or loss for irrecoverable.

Between the financial year end of 30 November 20X8 and 31 January 20X9, the date that the Financial statement were approved by the directors, the following information was received.

1) A customer had commenced legal action against the company for providing faulty products in December20X8

2) An ex –employee was suing them for unfair dismissal in november20X8

The company’s legal team have advised them that both claims are likely to succeed .both claims are Material in relation to the financial statements.

How will these two legal claims be reported in the financial statements for the year ended 30

November 20X8?

Which TWO of the following are expenses?

(A) Increase in owner‘s drawings

(B) Irrecoverable debt written off

(C) Decrease in allowance for receivables

(D) Increase in warranty provision

ABC’s cash book balance as at 31 December 20X8 was $ 45,690 debit during the preparation of the bank reconciliation it was discovered that.

1) Bank charge of $ 2,350 had been charged, but had not been recorded by ABC

2) Unpresented cheque were $ 16,780

3) Uncleared lodgments were $ 9,760

4) A direct debit of $ 1,140 was correctly processed the bank but had not been recorded by ABC

What is the correct cash book balance be shown in ABC’s statements of financial position as at 31 December 20X8?

When a machine is purchased it is capitalized as non –current assets deprecated over its useful life. After, rather than writing the cost in full in the statement of profit or loss.

Which accounting concept is Bering applied here?

The following information relates to the latest financial year for garden Co

1) The company made a loss of $ 87,445

2) Assets were revalued resulting in an increase in the revaluation surplus of $ 145,000

3) Interim dividends of $ 30,000 were paid during the year

4) The final dividend of $ 25,000 for the prior year was paid at the beginning of the year

What is the total comprehensive income for the year to be reported in the statement of profit or Loss and other comprehensive income?

Which of the following statement is correct?

Lin Co made the following share issues on 31 December 20X1

(A) An issue of 10,000 ordinary shares at full market value

(B) A bonus issue of 5,000 ordinary shares

(C) A right issue of 4,000 ordinary shares .The exercise price was 10% less than full market value

At 31 December 20X1 the market value of Lin Co’s share was estimated at $ 4.50 for ordinary shares

How much cash did Lin Co raise as a result on these share issues?

A Company calculates its accounts payable payment period as follows :

Closing trade payables x 365

Credit purchases

Which of the following factors will cause the accounts payables payment period in days to be higher compared to previous years ?

1) An extension of the credit period to its customers

2) Poor long time financial management resulting in the use of extended trade credit from suppliers

3) Two major suppliers offering a significant cash discount for early payment

Jason’s suspense account has a debit balance of $6000.

Which of the following would, on its own, account for the suspense account balance?

In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets which Two of the following statements are correct?

1. A probable liability of uncertain timing and amount should be provided for

2. A contingent asset should be disclosed where an inflow of economic benefit is probable

3. A contingent asset should be recognized if it is possible an inflow of economic benefit will be received

4. No disclosure is required for a contingent liability where an outflow of economic benefit is possible

The following figures are from Luck’s statement of financial position for the year ended 31 December 20X5 :

$

Land and buildings 7,35,000

Loan stock 20X9 75,000

Trade payables 2,25,000

Trade receivables 2,00,000

Overdraft 35,000

Prepayments 54000

Accruals 23,000

Inventory 25,000

Loan repayable 30 June 20X6 45,000

What are Lucy’s Current liabilities ?

Forest Co's statement of profit loss for the year ended 31march 20X0 showed the following

$000

Profit from operation 1,200

Finance cost. (200)

Profit before tax 1,000

Income tax expense (400)

Profit after tax 600

Extract it's statement of Financial position at 31 March 20X0 showed following

$0000

Share capital 8,000

Retained earning 1,200

Equity 9,200

Non current liabilities

10%loan note 2500

What is the return of capital for the year ended 31 March 20X0 ?

Which TWO of the following types of error should be identified by performing the Trade receivable control account reconciliation ?

a) Incorrect calculation of the sales invoice total posting to the sales day book and customer account

b) Omission of a balance from the list of credit customer balances

c) Addition of sales invoices to the wrong customer

d) Addition errors in the sales day book

Jian is preparing her annual accounts for the year ending 31may 20X7. She has been reviewing her accounts receivable and has decided to increase her allowance for receivable from $550 to $1,050 Jian has a accounted for this by debiting the receivable expense account with $1,050 and crediting the allowance for receivable with $1,050

Which is the effect of this error on Jian 's profit And net assets ?

Overstated Understated

Profit - -

Net assets - -

ABC Co’s equity 1 January 20X7 was as follows :

$000

Ordinary share capital ($1 shares) 500

Share premium 150

Retained earnings 800

1450

On 30 June 20X7 there was a one for five bonus issue and on 30 September there was a one for three bonus issue. Bonus issues are made from the Share premium account wherever possible.

What is the balance of Retained earnings after the bonus issue?

What is the purpose of a credit note?

Darcy, a sole trader, had an overdraft of $1,200 at 1 January 20X6.

During January :

1) Credit customers paid $21,050 and credit suppliers were paid $15,090

2) $15,320 was paid to purchase a vehicle

3) Cash sales banked were $9,490

4) Petty cash, which was maintained on an imprest system with a float of $100, was counted and reimbursed from the bank account. At the date of counting there was a Petty cash balance of $22

What was the balance on Darcy’s bank account as at 31 January 20X6?

Should the following items be included in cash and cash equivalents in a statement of cash flows?

Yes No

Long term investment - -

Bank overdraft - -

Liquid investment - -

Cash in hand - -

Semple uses FIFO for inventory valuation. Transactions during July 20X6 were s follows :

Semple had no inventory at the beginning of July.

What value should be recorded for the inventory at 31 July 20X6?

Which TWO of the following are true ?

(A) Sales tax can be repaid to a business by the tax authorities

(B) Sales are included in the statement of profit or loss gross of the sales tax charged

(C) Sales tax is collected on behalf of the tax authorities

(D) Sales are included in receivable net of sales tax charged

When preparing the disclosure note for a provision, which of the following must be disclosed for each class of provision?

1) Any uncertainties regarding the provision

2) The nature of the provision

3) The of the provision