Which is the function of the International Financial Reporting Standard (IFRS) Advisory Council?

According to IAS 16 Property, Plant & Equipment, which of the following statements are correct ?

1. if a company chooses to revalue its land & Buildings, then all items of property, Plant & Equipment should be reported at fair value.

2. When a company chooses to change its depreciation method from reducing balance to straight line, it must calculate the carrying amount at the date of change and depreciate over the remaining useful life of the asset.

Statement 1 and 2 are -

In accordance with IAS 37 provisions , contingent liabilities and contingent Assets are the following statements true or false ?

1. An entity should disclose a contingent liability , unless the possibility of an outflow of future economic benefits is remote

2. If a provision is for a single item it should equate to an amount that reflects The best estimate of the expenditure

The following extracts are from the statements of financial position of Charlton co. $

Property plant and equipment - 56,000

Inventory - 29,000

Trade receivable - 14,000

Cash and cash equivalents - 7,000

Long term borrowings - 20,000

Trade payable - 10,000

Taxation payable - 2,000

What is the current ratio of chartlon co (rounded to two decimal places)?

What is accounting concepts means that the financial statements must reflects the underlying commercial reality of a transaction ?

Which TWO of the following should be included in a statement of profit or loss?

1. Bank overdraft

2. Capital introduced

3. Rent received for the year

4. Trade receivable

5. Employees salaries for the year

6. Drawings taken from the business

Lan record his transactions in his daybooks.

Which TWO of the followings transactions should be recorded in the journal?

(a) An increase in the allowance for receivable

(b) The depreciation charge for the year

(c) A large purchase of goods for resale credit

(d) Goods sold that have been rejected and returned by credit customers

At the beginning of the day, David’s ledger account for cash at bank shows a debit balance of $500. During the day the following transactions occur.

(1) Amanda paid him $400 by direct bank transfer for goods received

(2) He invoiced Jamie $350 for goods delivered that day

(3) He paid for an invoice which totalled $ 600, before taking advantage of an early settlement discount of 4%

What should be the balance on David’s cash at bank account at the end of the day?

Yakuci sells all goods on credit and is currently preparing its financial statements for the year ended 31 December 20X6 .from the records that have been kept, the following information is available.

(1) Trade receivable at the start of the year were $102,400

(2) Trade receivable at the end of the were $133,900

(3) Discount allowed to credit customers were $3,400 for the (not expected to be taken when invoice was first issued)

(4) Cash received from credit customers was $124,600 for the year

(5) The profit mark –up on goods sold was 25% throughout the year

What was the gross profit for the year?

Which of the following describes a retained earning reserve?

W Co purchased some plant and machinery on 1january 20X1 at a cost of $ 24,000 the plant

had an estimated useful life of eight years and a nil residual value.

At 31 December 20X1 what are the balances on the ledger accounts for plant cost accumulated depreciation accounts?

According to the definition of an asset in the IASB’s Conceptual Framework for Financial

Reporting, which TWO of the following transactions would results in an asset being

recognised in Joe’s accounts?

(1) Joe has ordered some items of inventory which will not be delivered until next month

(2) Joe has purchased an item of machinery which has been delivered and he agrees to pay for it

in three months time.

(3) Joe’s father has given him a $5,000 cash contribution to his business with no obligation for

Joe to repay in the future

(4) Joe has promised to pay $50 to Andrew for delivering goods to customers

One week prior to the end of the financial year, Allden Co was notified that a customer was taking legal action against them, claiming that goods they supplied were the wrong specification .the amount of the claim was $60,000. Allden Co’s lawyers have said that the like hood of the claim succeeding was remote.

What are the disclosure requirements in the year end financial statements relating to this claim in accordance with IAS 37 Provision, Contingent Liabilities and Contingent Assets?

A company disposed of a motor vehicle on 1 January 20X7 which originally cost $ 12,000 when bought on 1 January 20X4 it had been depreciated at 25% on a straight –line basis. The motor vehicle was traded in for a new one costing $ 20,000 with the balance of $ 18,400 being paid by cheque.

What is the loss on disposal of the old motor vehicle?

The receivable ledger control account of a business showed a closing balance for the year of 420,000 which did not agree with the total of the list of individual ledger balance at the yearend subsequent checks revealed the following:

(1) The sales day book had been overcast by $15,000

(2) A debit balance that been extracted from the sales ledger of $10,000 had been incorrectly recorded in the list of balances as a credit balance

What was the total of the individual receivables ledger balance before the errors were discovered?

In respect of analysis of published financial statement, which of the following statements are True?

1. Investors can make comparisons between different comapanies

2. Management can make operational decisions about different internal departments

3. Employees can make decisions about their job security and future prospects

4. Suppliers can make decisions about offering credit to a company

off an irrecoverable debt Which two of the following transactions would effect both cash and profit equally when initially rerecorded?

1.Receiving interest from bank

2. Purchase of furniture for cash

3. Paying staff salary by cheque

4. Writing

A building was purchased on 1 January 20X1 for Rs.3,00,000 and had a useful life of 40 years. On 1 January 20X5 the building was revalued by a professional surveyor to Rs.4,50,000 and had a remaining useful life of 50 years. Directors decided to incorporate the revalued amount into the financial statements.

What is the depreciation charge for the building for the year ended 31 December 20X5?

Which FOUR of the following should be listed as a credit on a trail balance?

a) Receivable allowance

b) Share capital

c) Sales returns

d) Purchase returns

e) Interest received

f) Carriage outwards

g) Receivables

h) Carriage inwards

Gearing looks at the level of debt within an entity.

Which of the following would explain a reduction in gearing?

Bank Co is considering providing a loan to Corgi Co.

Which of the following ratios would indicate the gearing level of Corgi Co ?

Zeyo’s accounting records show the following information : $

Opening inventory at 1 January 20X6 - 45,600

Purchases during the three months ended 31 March 20X6 - 86,800

Revenues during the three months ended 31 March 20X6 - 1,28,400

On 31st March 20X6, a fire destroyed all of its inventory. All sales are made at a 25% gross profit margin.

What is the cost of inventory at 31 March 20X6 destroyed by the fire ?

Which two of the following could be considered a role of International Financial Reporting Standards?

1. To help provide comparability of accounting treatments internationally

2. To provide guidance for the preparation of the financial statements

3. To ensure all financial information is accurately recorded in the financial records of a business entity

4. To provide a legally binding framework to be adhered to internationally

A building was purchased on 1 January 20X1 for $3,00,000 and had a useful life of 40 years. On on 1 January 20X5 the building was revalued by a professional surveyor to $4,50,0000 and had a remaining useful life of 50 years. Directors decided to incorporate the revalued amount into the financial statements.

What is the depreciation charge for the building for the year ended 31 December 20X5 ?

Which two of the following Items should be treated as capital expenditure when accounting for the purchase of a non current assets ?

a) Delivery charges

b) Recoverable sales tax

c) Annual Insurance

d) Installation Charge

e) Maintenance charge

Which two of the following are reasons why companies must prepare disclosure notes ?

1. To comply with finance providers requirements

2. To explain items presented in the annual financial statements

3. To comply with accounting standards

4. To explain information required by taxation authority regulations

When preparing financial statement it is important that they are complete, neutral and free from error.

Which of the following qualitative characteristics does the above statement support ?

company had a balance on its payables control account of $817000 at 30 November 20X8. This did not agree with the total of the list of balances in its payables ledger, which totalled $813600.following an investigation, the following errors were discovered :

1) A contra with a supplier of $1400 was omitted from the payables ledger control account

2) An invoice of $3,800 was posted correctly to the purchase day book, but to the suppliers account as $1800

What is the revised payable control account total after correcting the errors above ?

On 30 september 20X4 Ravi has a balance on her receivables control account of $26,000 but the total of the individuals accounts in the receivables ledger came to $25,448. Upon investigation the following errors were discovered :

The sales day book was overcast by $120.

A credit balance of $84 on a customer’s account in the receivables ledger had been incorrectly treated as a debit balance

A payables contra of $600 had been entered in the customer’s individual account but no other entry was made

After accounting for the above errors, what is the correct amount on both the receivables ledger and the receivables control account ?

At the beginning of the day, David’s ledger account for cash at bank shows a debit balance of $500. During the day the following transactions occur :

i. Amanda paid him $400 by direct bank transfer for goods received

ii. He invoiced Jamie $350 for goods delivered that day

iii. He paid for an invoice which totalled $600 before taking advantage of an early settlement discount of 4%

What should be the balance on David’s cash at bank account at the end of the day ?

Which of the following statement in correct?

Which of the following is a characteristics faithful representation in accordance with the conceptual framework financial reporting?

Ceridwyn sells magazines on a 12month subscription. On 1september 20X5 she sold 12month subscription for $720 cash.

In accordance with IFRS15 revenue From contracts with customers how much revenue should Ceridwyn recognise for this subscription in the financial year ended 31December 20X5?

Which of the following statements are correct?

(i) A liability is a present obligation, arising from past events, the settlement of which is expected to result in an outflow of economic resources.

(ii) An uncertain liability may be called a provision.

(iii) A contingent liability should be disclosed in the notes to the financial statements.

Alpha buys goods from Beta. At 30 June 20X5 Beta's account in Alpha's records showed $5,700 owing to Beta. Beta submitted a statement to Alpha as at the same date showing a balance due of $5,200.

Which one of the following could account fully for the difference?

Which of the following statements about intangible assets are correct?

1 If certain criteria are met, research expenditure must be recognised as an intangible asset.

2 The notes to the financial statements should disclose the gross carrying amount and the accumulated amortisation at the beginning and the end of the period for each class of intangible asset.

3 Intangible assets must be amortised over their useful life.

Sigma's bank statement shows an overdrawn balance of $38,600 at 30 June 20X5. A check against the company's cash book revealed the following differences:

1 Bank charges of $200 have not been entered in the cash book.

2 Lodgements recorded on 30 June 20X5 but credited by the bank on 2 July $14,700.

3 Cheque repayments entered in cash book but not presented for payment at 30 June 20X5 $27,800.

4 A cheque payment to a supplier of $4,200 charged to the account in June 20X5 recorded in the cash book as a receipt.

Based on this information, what was the cash book balance before any adjustments?

The plant and machinery cost account of a company is shown below. The company's policy is to charge depreciation at 20% on the straight line basis, with proportionate depreciation in years of acquisition and disposal.

What should be the depreciation charge for the year ended 31 December 20X5?

Which of the following are correct?

1 The statement of financial position value of inventory should be as close as possible to net realisable value.

2 The valuation of finished goods inventory must include production overheads.

3 Production overheads included in valuing inventory should be calculated by reference to the company's normal level of production during the period.

4 In assessing net realisable value, inventory items must be considered separately, or in groups of similar items, not by taking the inventory value as a whole.

Which of the following statements are correct?

1 Contingent assets are included as assets in financial statements if it is probable that they will arise.

2 Contingent liabilities must be provided for in financial statements if it is probable that they will arise.

3 Material non-adjusting events are disclosed by note in the financial statements.

At 1 January 20X5 a company had an allowance for receivables of $18,000 At 31 December 20X5 the company's trade receivables were $458,000.

It was decided:

(a) To write off debts totalling $28,000 as irrecoverable

(b) To adjust the allowance for receivables to the equivalent of 5% of the remaining receivables

What figure should appear in the company's statement of profit or loss for the total of debts written off as irrecoverable and the movement in the allowance for receivables for the year ended 31 December 20X5?