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For Examinations to August 2015

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STUDY QUESTION BANK
ACCA
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Paper F3 | FINANCIAL ACCOUNTING

Foundations in Accountancy
Paper FFA | FINANCIAL ACCOUNTING
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ACCA

PL PAPER F3/FFA

FINANCIAL ACCOUNTING
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STUDY QUESTION BANK
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For Examinations to August 2015

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Acknowledgement

Past ACCA examination questions are the copyright of the Association of Chartered Certified
Accountants and have been reproduced by kind permission.

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

CONTENTS

Question Page Answer Marks Date worked

CONTEXT OF FINANCIAL REPORTING

1 MCQs Context of financial reporting 1 1001 10

FINANCIAL STATEMENTS

2 Jan Bartok 2 1001 8


3 Tomas Maxim 2 1002 9
4 MCQs Financial statements 3 1003 12

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ACCOUNTING SYSTEMS

5 MCQs Accounting systems 4 1004 8

DOUBLE ENTRY BOOKKEEPING PRINCIPLES

9
10
11
6
7
Victor Borissov

LEDGER ACCOUNTING AND THE TRIAL BALANCE

8 Roman
Petr
Grigory
Dana
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MCQs Double entry bookkeeping principles
4
5

6
7
7
8
1004
1007

1008
1010
1013
1016
22
10

22
21
24
23
12 A Patel 8 1019 35
13 Bohm 9 1024 10
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14 Ivan Tombs 9 1026 14
15 Viktor 10 1029 7
16 Angelo 10 1031 40
17 Stefan 11 1036 23
18 R Rybin 12 1039 27
19 Nixon 12 1044 30
20 MCQs Ledger accounting 13 1048 10
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CREDIT TRANSACTIONS

21 Damien 14 1048 5
22 Ricardo 15 1049 15
23 MCQs Credit transactions 15 1051 6

ACCRUALS AND PREPAYMENTS

24 Dino 16 1051 10
25 A Crew 17 1052 8
26 Tomasz 17 1054 12
27 Pushkova 18 1055 15
28 Scorcese 19 1057 17
29 Tolstoy 19 1058 6
30 Haertel 20 1059 8
31 MCQs Accruals and prepayments 20 1059 16

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

CONTENTS

Question Page Answer Marks Date worked

DEPRECIATION AND DISPOSAL OF NON-CURRENT ASSETS

32 Rookie 22 1061 10
33 Alexander 23 1062 6
34 Udot 23 1062 7
35 Popov 23 1064 6
36 Reuther 24 1065 10
37 MCQs Depreciation and disposals 24 1067 20

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RECEIVABLES AND PAYABLES

38 Krol 27 1071 6
39 Hyundai 27 1071 6
40 Dinul 28 1072 7
41 Pushkin 28 1074 9
42
43
44
45
46

INVENTORY

47
48
Ink Products
Adam
Strak
Frederik PL
MCQs Receivables and payables

C3P0
Ogay
29
29
30
30
31

33
33
1075
1075
1077
1078
1079

1082
1083
8
10
8
10
16

10
8
49 Ales 34 1084 4
50 Period-end adjustments 34 1084 40
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51 MCQs Inventory 36 1090 8

BOOKS OF PRIME ENTRY AND CONTROL ACCOUNTS

52 A Smit 37 1090 30
53 Rebecca 37 1093 20
54 Wooden Tops 38 1097 16
55 Rubens 38 1098 3
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56 Zone 39 1099 6
57 Hastings & Co 39 1099 18
58 Zenkerova 40 1100 11
59 Rankine 40 1101 40
60 Henry Williams 41 1107 40
61 MCQs Books of prime entry 42 1114 22

CONTROL ACCOUNT RECONCILIATIONS

62 Brabantia 46 1117 9
63 Tartufo 47 1117 10
64 Racy 47 1118 15
65 Teletubby 48 1119 16
66 Robin & Co 49 1120 15
67 Showers 50 1121 15
68 Hubert 51 1121 22
69 MCQs Control account reconciliations 52 1123 8

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

CONTENTS

Question Page Answer Marks Date worked

BANK RECONCILIATIONS

70 Talant 53 1123 8
71 Pringle 54 1124 5
72 White 54 1124 6
73 Gorbachev 54 1124 8
74 Jovanovich 55 1125 8
75 North Star Company 55 1125 12
76 Dealers 56 1126 15

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77 Geneva 57 1127 15
78 MCQs Bank reconciliations 57 1127 8

SUSPENSE ACCOUNTS

79 Yulia 58 1128 10
80
81
82
83
84
85
86
87
88
89
Ogre
Groan
Blackwater Transport
Smetena Newsagents
Alpha
Cosy Comforts
Rafal Jaffa
XYZ
CND
MCQs Suspense accounts
PL 59
59
60
61
62
63
63
65
66
68
1129
1129
1130
1131
1133
1136
1137
1139
1141
1143
8
15
15
18
20
20
20
18
26
10

BASIC ACCOUNTS PREPARATION


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90 Jolanta 70 1144 20
91 Gandalf 71 1147 18
92 Maria 72 1148 20
93 Federov 73 1150 20
94 Heinz 74 1153 20
95 Gammon 75 1157 20
96 Stewart 77 1160 20
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97 Bowie 79 1162 25

INCOMPLETE RECORDS

98 Cost structures 80 1163 9


99 Lamdin 81 1165 20
100 Leonardo 82 1166 20
101 Deltic 83 1169 20
102 Waldorf 84 1172 20
103 Slate 85 1175 20
104 Bennett 86 1177 20
105 Botham 87 1181 20
106 MCQs Incomplete records 89 1183 20

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

CONTENTS

Question Page Answer Marks Date worked

REGULATORY FRAMEWORK

107 IASB 92 1185 10


108 MCQs Regulatory framework 92 1186 10

CONCEPTUAL FRAMEWORK

109 Financial statements 93 1187 17


110 Accounting concepts (ACCA J00) 93 1188 14

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111 MCQs Conceptual framework 93 1189 12

IAS 1 PRESENTATION OF FINANCIAL STATEMENTS

112 Overall considerations 95 1190 10


113 Current assets and liabilities 95 1191 7
114

116
117
118
119
120
MCQs IAS 1

CAPITAL STRUCTURE AND FINANCE COSTS

115 Beta
Logo
Gamma
Sigma
Lark (ACCA J00)
Alpaca (ACCA J02)
PL 95

96
97
98
99
100
101
1192

1192
1194
1195
1197
1199
1200
10

20
12
18
12
20
11
121 MCQs Capital structure and finance costs 102 1201 14
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IAS 2 INVENTORIES

122 Retail inventory 104 1202 12


123 Measurement of inventories 104 1203 12
124 Bilda 104 1204 12
125 MCQs IAS 2 105 1205 10

IAS 18 REVENUE
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126 Sale of goods and leisure facilities 106 1206 12


127 MCQs IAS 18 106 1206 10

IAS 16 PROPERTY PLANT AND EQUIPMENT

128 Depreciation and revaluation 108 1207 20


129 Diamond (IAS 16) (ACCA J97) 108 1208 16
130 MCQs IAS 16 109 1211 10

IAS 38 INTANGIBLE ASSETS

131 Research and development 110 1211 20


132 Defer 110 1213 10
133 MCQs IAS 38 111 1214 10

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

CONTENTS

Question Page Answer Marks Date worked

IAS 37 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS


AND IAS 10 EVENTS AFTER THE REPORTING PERIOD

134 Eternity 112 1214 12


135 Accounting treatments 112 1215 12
136 Four events 113 1216 20
137 MCQs IAS 37 114 1217 8
138 MCQs IAS 10 115 1217 8

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IAS 7 STATEMENT OF CASH FLOWS

139 Antipodean 116 1218 14


140 R2D2 117 1220 18
141 Momi 119 1222 16
142 Jane 120 1224 20
143
144
145

147
148
149
C3P0
Tivoli
MCQs IAS 7

CONSOLIDATED FINANCIAL STATEMENTS

146 P&S
Happy and Sad
Faye
Honey
PL 121
123
124

126
127
128
129
1225
1227
1229

1229
1231
1232
1234
11
15
10

10
12
12
12
150 Humphrey 130 1236 10
151 Happy 130 1237 10
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152 Bing and Crosby (ACCA D10) 131 1239 12
153 MCQs Consolidated financial statements 132 1240 12

INTERPRETATION OF FINANCIAL STATEMENTS

154 Alex 133 1241 12


155 Solo 135 1242 20
156 Darth 136 1244 12
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157 MCQs Interpretation of financial statements 137 1245 10

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Question 1 MCQs CONTEXT OF FINANCIAL REPORTING

1.1 Which of the following are features of any partnership?

A Owner-management, joint liability


B Limited liability, owner-management
C Separate legal entity, limited liability
D Joint liability, separate legal entity

1.2 Which of the following more of a disadvantage of operating as a sole trader as compared
with a partnership?

A Risk of personal bankruptcy

E
B Limited access to finance
C Responsibility for all liabilities
D Requirements to keep accounting records

1.3 Which of the following distinguishes financial reporting from financial accounting?

1.4
A
B
C
D

B
C
PL
Making year-end adjustments to determine the financial results for the year
Collecting, analysing and summarising financial transactions
Recording actual transactions in monetary terms
Disclosure of transactions and events

Which of the following is NOT a component of financial statements?

A A statement of comprehensive income


A statement of changes in equity
A cash flow forecast
D Accounting policies and explanatory notes
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1.5 Which of the following users of financial statements has least need of published financial
information?

A Potential investors and their advisers


B Directors and management
C Employees and their representatives
D Customers and suppliers
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(10 marks)

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Question 2 JAN BARTOK

The following information is available for Jan Bartok’s business for the year ended 31 December:

$
Bank overdraft 1,200
Trade receivables 5,000
Opening inventory 1,500
Motor vehicles 2,800
Sales revenue 25,000
Drawings 2,000
Opening capital 5,000
Purchases 20,000

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Trade payables 2,000
Closing inventory 3,000
Cash in hand 100
Administration expenses 1,000
Wages 800

Required:

Question 3 TOMAS MAXIM


PL
Prepare a statement of profit or loss for the year ended 31 December and a statement of financial
position at that date.
(8 marks)

The following information is available for Tomas Maxim’s business for the year ended 31 December.
He started his business on 1 January.
$
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Trade payables 6,400
Trade receivables 5,060
Purchases 16,100
Sales revenue 28,400
Motor van 1,700
Drawings 5,100
Insurance 174
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General expenses 1,596


Rent 2,130
Salaries 4,162
Inventory at 31 December 2,050
Sales returns 200
Cash at bank 2,628
Cash in hand 50
Capital introduced 4,100

Required:

Prepare a statement of profit or loss for the year ended 31 December and a statement of financial
position at that date.
(9 marks)

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Question 4 MCQs FINANCIAL STATEMENTS

4.1 Which of the following statements is correct?

A A non-current asset is a tangible asset


B A non-current asset is initially recorded at cost
C A non-current asset is depreciated annually
D A non-current asset is owned

4.2 Which one of the following is NOT a liability?

A Accrued expenses
B Bank overdraft

E
C Drawings
D Trade payables

4.3 Which one of the following is an example of an intangible asset?

A A lease of land

4.4
B
C
D
A registered trademark
Royalty receipts

PL
An investment in a listed company

Which one of the following represents cost of goods sold in a statement of profit or loss?

A
B
C
D
Purchases – closing inventory + opening inventory
Purchases – opening inventory + closing inventory
Opening inventory + purchases + closing inventory
Closing inventory + purchases – opening inventory
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4.5 Which one of the following items of expenditure should be classified as capital
expenditure?

A Service agreement costs for computer equipment


B Installation costs for an air-conditioning system
C Cost of a three-year manufacturer’s warranty
D Purchases of cars for resale
SA

4.6 Which one of the following items could properly be included in non-current tangible
assets in the statement of financial position of a manufacturing business?

A $55,000 representing the use of the business’s own labour and material costs
incurred in constructing an extension to the warehouse
B $45,000 representing the salary and occupancy costs of a manager whose main
function is to prepare, control and implement capital expenditure budgets
C $25,000 spent in tracing and rectifying a serious fault in operating a production line
to restore it to normal efficiency
D $35,000 incurred in an extensive market survey, the recommendations of which
may be implemented next year
(12 marks)

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Question 5 MCQs ACCOUNTING SYSTEMS

5.1 Which one of the following statements concerning an accounting system is correct?

A It includes informal as well as formal procedures


B It ensures efficient operations
C Its objective is to prevent and detect fraud and error
D It maintains computerised records

5.2 Which one of the following is an organisational objective?

A To ensure that all assets are recorded in a register


B To safeguard assets

E
C To ensure that asset disposals are authorised
D To ensure that access to assets is restricted

5.3 Which one of the following is a book of prime entry?

A Asset register

5.4
B
C
D
Inventory records
Receivables ledger
Journal
PL
Which of the following documents will all be found in a typical sales system?

A
B
C
D
Standing order, goods despatch note, customer statement
Sales order, goods received note, remittance advice
Sales invoice, goods despatch note, remittance advice
Sales invoice, goods received note, customer statement
(8 marks)
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Question 6 VICTOR BORISSOV

Victor Borissov won $10,000 in a national lottery and decided to set himself up as a computer
distributor, starting to trade on 1 April.

During April he made the following transactions:


SA

(1) Paid the $10,000 into a business bank account


(2) Bought an Atari for $1,000 cash
(3) Bought an Amstrad for $2,500 cash
(4) Sold the Atari for $1,500 cash
(5) Paid rent for his premises of $300 cash.
(6) Bought an office desk and chair for $200 cash
(7) Bought a Compaq for $4,000 cash
(8) Sold the Amstrad for $3,250 cash
(9) Drew $400 in cash from the business.

Required:

(a) Show the accounting equation which results from EACH of these transactions.

(Note: Each transaction follows on from the one before.) (9 marks)

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

(b) The following transactions were entered into during May:

(1) Bought for cash a Legend ($3,000) and an Apple Mac ($2,500)
(2) Sold the Legend for $4,500 cash
(3) Received a telephone bill for $100 which he paid
(4) Sold the Apple Mac for $1,800 cash
(5) Drew $600 in cash from the business
(6) Bought an IBM for $5,600 cash.

Required:

Show the accounting equation at 31 May after ALL the above transactions. (6 marks)

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(c) Assuming the same transactions as in (b), prepare a statement of profit or loss for the
month ended 31 May and a statement of financial position at that date for Victor
Borissov’s business. (7 marks)

(22 marks)

Question 7 MCQs DOUBLE ENTRY BOOKKEEPING PRINCIPLES

7.1

7.2
C
D
PL
Which of the following principles underlie double entry bookkeeping?

A
B
Accounting equation, separate legal entity concept, duality concept
Accruals concept, accounting equation, business entity concept
Accounting equation, business entity concept, duality concept
Accruals concept, business entity concept, duality concept

Closing net assets can be found by using which of the following equations?

A
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Opening capital + Profit + Drawings + Capital introduced
B Opening capital + Profit – Drawings + Capital introduced
C Opening capital – Profit + Drawings + Capital introduced
D Opening capital – Profit – Drawings + Capital introduced

The following information relates to items 7.3 and 7.4:

A trader had the following items in his statement of financial position on 31 December 2013 and 2014:
SA

2013 2014
$ $
Land 2,000 2,000
Cars 1,000 –
Payables 500 2,000
Receivables 2,000 2,000
Cash 500 –
Closing inventory – 6,000
Accrued expenses – 1,000

During the period the trader made drawings of $700.

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

7.3 What was the trader’s profit for the year ended 31 December 2014?

A $1,300
B $2,700
C $6,700
D $7,700

7.4 What was the change in the above trader’s investment (in net assets) between 2013 and
2014?

A $2,000
B $2,700
C $3,000

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D $4,000

7.5 Which ONE of the following is NOT an appropriation of profit?

A Goods taken from a business by a sole trader for personal use


B Interest payments to providers of finance
C
D

Question 8 ROMAN
PL
Dividends paid to shareholders
Salaries paid to partners

The following information relates to the first two months’ trading of Roman, who is in business as a
greengrocer. All transactions are on a cash basis.

1 January Roman paid $350 into the business


(10 marks)

15 January Bought goods for $200


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23 January Paid motor expenses of $40
31 January Sold goods for $300

5 February Received $300 from Denis as a loan repayable in two years’ time
7 February Purchased goods for $200
8 February Sold goods for $150
21 February Paid rent of $50
28 February Sold goods for $300.
SA

Required:

For EACH month:

(a) Write up and close the relevant ledger accounts for the above transactions; (9 marks)
(b) Extract a list of account balances; (4 marks)
(c) Prepare a statement of profit or loss; (5 marks)
(d) Draft a statement of financial position. (4 marks)

(22 marks)

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Question 9 PETR

Petr commenced trading in his bakery on 5 April. All his transactions were on a cash basis, as follows:

5 April Introduced cash into the business of $300


7 April Purchased goods for $200
8 April Received loan from Tatiana of $250 repayable within twelve months
15 April Purchased a motor van for $150
20 April Sold goods for $350
28 April Paid rent of $50
29 April Repaid part of the loan $200
30 April Drew cash from the business $60.

E
At 30 April Petr had $100 goods in hand.

Required:

(a) Write up, balance and close the relevant ledger accounts for the above transactions.
(8 marks)

(b)

(c) PL
Prepare the list of account balances at 30 April.

Prepare the statement of profit or loss for the month ended 30 April and a statement of
financial position at that date.

Question 10 GRIGORY
(9 marks)
(4 marks)

(21 marks)

You are given the following information on the first month’s trading of Grigory, who is in business as a
second-hand furniture dealer. All transactions are on a cash basis.
M
1 January Grigory paid $5,000 into the business
2 January Bought a motor van for $600
3 January Bought goods for $1,300
4 January Received a loan from Sergei $1,000 repayable within twelve months
10 January Paid expenses on the motor van of $200
13 January Sold goods for $300
SA

20 January Sold goods for $500


24 January Paid storage expenses $150
27 January Repaid Sergei part of his loan $350
30 January Withdrew cash from the business $175
31 January Closing inventory was $800.

Required:

(a) Write up the ledger accounts for the above transactions, including dates, descriptions
and balances. (11 marks)

(b) Prepare the trial balance at 31 January. (4 marks)

(c) Prepare the statement of profit or loss for the month ended 31 January and a statement
of financial position at that date. (9 marks)

(24 marks)

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Question 11 DANA

The following information relates to the first two months’ trading of Dana, who is in business as a
hairdresser. All transactions are on a cash basis.

2 March Dana paid $525 into the business


16 March Purchased supplies for $300
24 March Paid miscellaneous expenses $60
29 March Cash from customers $450
6 April Received $450 from Radok as a loan repayable in two year’ time
8 April Purchased supplies $300
9 April Receipts from customers $225
22 April Paid establishment costs $75

E
30 April Receipts from customers $450.

Dana held no inventory at 30 April.

Required:

(a)

(b)

(c)

(d)
PL
Write up and balance the ledger accounts for EACH month.

Extract a trial balance for EACH month.

Prepare a statement of profit or loss for the TWO months to 30 April.

Prepare a statement of financial position at the end of EACH month.


(9 marks)

(4 marks)

(3 marks)

(7 marks)

(23 marks)

Question 12 A PATEL
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A Patel started business on 1 January and had the following monthly transactions:

1 January Started the business with $10,000 in cash


2 January Borrowed a sum of $4,000 in cash from C Sladek, $200 of which is
repayable on the first of every other month starting 1 February
3 January Bought a motor van for cash $900
4 January Bought goods for cash $2,300
SA

5 January Sold his entire inventory for $3,000 cash


6 January Paid cash for motor running expenses of $250

1 February Repaid $200 in cash to C Sladek


2 February Withdrew $300 cash from the business for his own use
3 February Bought a typewriter for $160 cash
4 February Bought goods for cash $3,500
5 February Sold goods for $3,200 cash
6 February Took for his own consumption goods which had cost $280
28 February Closing inventory was $720

1 March Bought goods for cash $2,900


2 March Sold goods for $2,625 cash
3 March Paid cash for rent of premises $225
31 March Closing inventory was $1,170.

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Required:

(a) Prepare for EACH month:


(i) the ledger accounts showing descriptions and balances;
(ii) a trial balance;
(iii) a statement of profit or loss for the year to date;
(iv) a statement of financial position. (30 marks)

(b) Close the relevant ledger accounts as at 31 March writing up the income and
expenditure account. (5 marks)

(35 marks)

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Question 13 BOHM

Bohm’s transactions were as follows:


$
1 January Introduced cash 5,000
5 January Purchased fixtures and fittings 2,000

Required:
7 January
9 January
10 January
11 January
12 January
13 January
14 January
PL
Purchased goods on credit from Dvorak
Some goods returned damaged to Dvorak
Paid Dvorak amount due
Sold goods on credit to Jovanovich
Jovanovich returned unsuitable goods
Sold goods for cash
Jovanovich settled his account.
1,000
100

300
50
300

Write up and close the relevant ledger accounts. (10 marks)


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Question 14 IVAN TOMBS

The following information is available for the business of Ivan Tombs, a bookseller:
January
(1) Started business with $10,000 in business bank account
(2) Made purchases for $200 cash
SA

(3) Further purchases for $400 on credit from Moore


(4) Paid rent of $1,000 cash
(5) Bought stationery for $60 cash
(6) Bought an old van for $4,000 from Petros promising to pay later
(7) Sold rare books to Greene for $1,000 cash
(8) Paid Moore $140 cash
(9) Sold book on credit to Doyle for $140
(10) Bought more stationery for $40 cash
(11) Paid cash of $150 for motor expenses
(12) Paid Petros $1,000
(13) Took $300 from the business to pay for living expenses
(14) Received $100 from Doyle.

Required:

Show how these transactions would be recorded in the ledger accounts. Close the relevant
accounts.
(14 marks)

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Question 15 VIKTOR

Viktor had the following transactions during January:

(1) Introduced $1,000 cash as capital


(2) Purchased goods on credit from ABC for $400
(3) Paid monthly rent $40 and electricity $100
(4) Purchased car for cash $200
(5) Sold half of goods on credit to XYZ for $350
(6) Drew $60 for his own expenses
(7) Sold remainder of goods for cash $420.

Required:

E
Write up and close the relevant ledger accounts, including trading account and income and
expenditure account, necessary to record the above transactions.
(7 marks)

Question 16 ANGELO

painters:

(1)
(2)
(3)
(4)
Pay $300 cash for shop rent
PL
The transactions described below concern the business of Angelo which retails biographies of famous

Invest $5,000 capital in business

Pay cash for 100 biographies of Cézanne @ $20 each


Sell 30 copies @ $30 each for cash
(5) Buy a second hand van for $2,000
M
(6) Pay $1,500 cash for 50 biographies of Dali
(7) Sell, for cash, 30 copies of each title for $30 and $45 respectively
(8) Receive $100 cash for sub-letting storage space
(9) Purchase, on credit from The Bookworm, 40 biographies of El Greco @ $25 each
SA

(10) Receive, but do not pay, a telephone bill for $75


(11) Sell:
10 copies of Cézanne @ $30 each, for cash
20 copies of Dali @ $45 each, on credit to Mr Salvador
15 copies of El Greco @ $40 each, on credit to Mr Quinn
(12) Pay $500 to The Bookworm
(13) Receive $600 from Mr Salvador
(14) Pay the telephone bill
(15) Receive $475 from Mr Quinn
(16) Pay $300 to The Bookworm
(17) Sell all remaining inventory for $1,800 cash to facilitate a move to bigger premises.

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Required:

(a) Present each transaction in the form: $ $


Dr Name of a/c X
Cr Name of a/c X (15 marks)

(b) Write up the ledger accounts to reflect the double entries, recording credit transactions
in total accounts rather than individual accounts. (8 marks)

(c) Balance all the accounts. (4 marks)

(d) Extract a list of account balances (i.e. trial balance). (4 marks)

E
(e) Close the relevant accounts to an income and expenditure account in the general ledger.
(3 marks)

(f) Draft a statement of profit or loss and statement of financial position. (6 marks)

(40 marks)

Question 17 STEFAN

November:

1 November
3 November
5 November
PL
Stefan commenced trading on 1 November as a wine merchant. The following transactions relate to

Paid cash into the business


Purchased goods from X on credit
Purchased goods from Y on credit
$
3,000
400
350
7 November Purchased fixtures and fittings for cash 560
8 November Sold goods to A on credit 500
M
12 November Sold goods for cash 400
23 November Withdrew cash from the business 100
25 November Paid cash to Y 300
28 November Paid cash to X 400
29 November Received cash from A 400
30 November Withdrew goods for own consumption (at cost) 20
SA

Closing inventory amounted to $250.

Required:

(a) Write up and balance the relevant ledger accounts for the above transactions. (11 marks)

(b) Prepare the trial balance at 30 November. (4 marks)

(c) Prepare a statement of profit or loss for the month ended 30 November and a statement
of financial position at that date. (8 marks)

(23 marks)

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Question 18 R RYBIN

On 1 December R Rybin started business with $5,000 in cash. He purchased fixtures and fittings for
$1,000 cash.

His purchases on credit during the month were:


$
9 December A Agladze 400
13 December B Buczak 300
20 December C Coke 140

His sales on credit during the month were:


$

E
10 December D Didnko 600
14 December E Ergo 800
29 December F Fesan 300

Cash sales for the month were $100. Other payments were:
$
7 December
10 December

20 December
Rent

PL
Electricity
Motor van
Stationery

On 31 December D Didnko settled his account in full, and Rybin paid Agladze and Buczak. On the
same date Rybin also bought a second-hand computer for $250 for use in the business, and withdrew
$100 from the business.

Inventory in hand at 31 December was $150.


40
150
1,500
200

Required:
M
(a) Write up the ledger accounts, recording credit transactions in the accounts of
individuals. (15 marks)

(b) Prepare the trial balance at 31 December. (4 marks)

(c) Prepare the statement of profit or loss for the month ended 31 December and a
SA

statement of financial position at that date. (8 marks)

(27 marks)

Question 19 NIXON

Nixon is a retailer and on 1 January his assets were:


$
Cash in hand 343
Inventory 458
Furniture and fittings 198
Receivables
Smith 18
Harvey 39
Moon 26

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

His liabilities were to the following suppliers:


$
Rich 12
Max 21

His transactions during January were:


$
2 January Goods sold to Harvey on credit 124
5 January Paid wages 12
Bought goods on credit from Rich 150
7 January Smith settled his account
9 January Paid the amount owing to Max
11 January Cash sales 64

E
14 January Paid wages 14
Bought goods for cash 75
15 January Paid Rich for balance owing on his account
20 January Bought for cash a new office desk 32
21 January Paid wages 17
Cash sales 110

Required:

(a)
23 January

28 January

31 January
Cash sales
Paid wages
Cash sales
PL
Paid office expenses
Harvey paid on account

Inventory at cost was

Write up and close the relevant ledger accounts.


3
25
84
15
30
374

(18 marks)
M
(b) Extract a trial balance at 31 January. (4 marks)

(c) Prepare a statement of profit or loss for the month ended 31 January and a statement of
financial position at that date. (8 marks)

(30 marks)

Question 20 MCQs LEDGER ACCOUNTING


SA

20.1 Which of the following is correct?

A A debit entry will increase non-current assets


A debit entry will decrease drawings
A credit entry will increase payables

B A debit entry will increase bank overdraft


A debit entry will decrease payables
A credit entry will increase profit

C A credit entry will decrease drawings


A credit entry will increase profit
A credit entry will decrease non-current assets

D A debit entry will increase profit


A credit entry will decrease drawings
A credit entry will increase bank overdraft

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

20.2 Which of the following is the correct double entry for goods taken by a sole trader for
personal use?

A Dr Drawings
Cr Purchases
B Dr Drawings
Cr Sales
C Dr Drawings
Cr Inventory
D Dr Purchases
Cr Drawings

E
20.3 At the end of the year when ledger accounts have been closed, which one of the following
may have a credit balance?

A Sales revenue account


B Bank account
C Inventory account

20.4
D

B
C
D
PL
Income and expenditure account

Which one of the following errors should be detected by the extraction of a trial
balance?

A An error of original entry


An error of omission
An error of principle
A transposition error

20.5 Which one of the following statements is correct?


M
A A trial balance can only be extracted at the end of a reporting period
B A trial balance does not prove that all transactions have been recorded
C A trial balance proves the arithmetic accuracy of the books of account
D Financial statements can be prepared directly from a trial balance
(10 marks)
SA

Question 21 DAMIEN

Damien is a pet food wholesaler. His policy is to allow his credit customers a settlement discount of
3%. He receives from his suppliers, a discount of 5% if he settles their invoices within 30 days of
receipt and also occasionally receives a trade discount.

During March the following takes place:

(i) Purchased goods on credit costing $260.

(ii) Sold goods on credit for $500 to Felix.

(iii) Was informed by his suppliers that he was eligible for a trade discount of 10%.

(iv) Received cash from Felix, who took advantage of the discount offered.

(v) Sent cash, in respect of the credit purchases made in March, to suppliers taking advantage of
the 5% discount offered.

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Required:

Write up a discounts ledger account. (5 marks)

Question 22 RICARDO

Ricardo, a sole trader, had the following transactions for the month of June:

2 June Sold goods to Claire for $8,500 on credit; offered a 5% quick settlement
discount.

13 June Bought goods from Georgina for $12,000 on credit; Georgina offered a 7% quick
settlement discount.

E
14 June Sold goods to Hywel for $9,000 after a 5% trade discount.

20 June Sold goods to Jane for $6,000 cash.

21 June Bought goods on credit for $4,500 from Andrew who offered a 2% quick
settlement discount.

22 June

24 June

25 June
(i)

(ii)

(i)
PL
Claire returned goods sold of $1,000.

Mandy bought goods worth $5,000 and was offered a 3% quick


settlement discount.

Claire took advantage of Ricardo’s discount and paid the net amount due
after taking the discount offered.

Hywel settled the amount due in full.

(ii) Ricardo paid Georgina the amount due after deducting the discount
M
offered.

27 June Ricardo paid Andrew in full, after deducting the discount offered.

Required:

Prepare the relevant ledger accounts to record the above transactions, extract a trial balance at
27 June and close the relevant ledger accounts.
SA

Your answer should clearly show transactions with individual customers and suppliers.

(15 marks)

Question 23 MCQs CREDIT TRANSACTIONS

23.1 Which of the following is the correct double entry for making a credit sale?

A Dr Cash
Cr Sales
B Dr Sales
Cr Trade receivables
C Dr Trade receivables
Cr Sales
D Dr Cash
Cr Trade receivables

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

23.2 Which of the following statements is correct?

A When a settlement discount is offered a sale is recorded at its full value


B A settlement discount is also called a trade discount
C A settlement discount allowed is recognised as income
D When a trade discount is offered a sale is recorded at is full value

23.3 A purchase has been recorded on the receipt of goods obtained on credit terms.

Which of the following is the correct double entry to record the subsequent return to the
supplier of these goods?

A Dr Trade payables

E
Cr Purchases
B Dr Trade payables
Cr Sales returns
C Dr Cash
Cr Trade payables
D

Question 24 DINO
Dr Purchases

PL
Cr Trade receivables

Dino started a business on 1 January 2014.

In the accounting year to 31 December 2014:


(6 marks)

A new warehouse was acquired on 31 March 2014. On 21 April 2014, Dino received a water
M
usage demand for $1,000 for the 12 months to 31 March 2015. Payment was made, in full, on
30 April 2014.

In the accounting year to 31 December 2015:

An office extension was built. The water usage demand for the 12 months to 31 March 2016
was $1,600. Dino paid the full amount on 1 June 2015.
SA

Required:

(a) Write up the water usage ledger account for EACH of the two accounting years.
(6 marks)

(b) Assuming now that payments were made annually in arrears (i.e. $1,000 on 31 March
2015 and $1,600 on 31 March 2016), write up the water usage ledger account for each of
the two accounting years. (4 marks)

(10 marks)

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Question 25 A CREW

The following is an extract from the trial balance of A Crew at 31 December 2014:

Dr Cr
$ $
Stationery 560
Rent 900
Rates (local property tax) 380
Lighting and heating 590
Insurance 260
Wages and salaries 2,970

E
There was stationery still in hand at 31 December 2014 which had cost $15.

Rent of $300 for the last three months of 2014 had not been paid and no entry has been made in the
books at all for it.

Of the rates, $280 was for the year ended 31 March 2015. The remaining $100 was for the three
months ended 31 March 2014.

PL
Fuel had been delivered on 18 December 2014 at a cost of $15 and had been consumed before the end
of 2014. No invoice had been received for the $15 fuel in 2014 and no entry has been made in the
records of the business.

$70 of the insurance paid was in respect of insurance cover for the year 2015.

Nothing was owing to employees for wages and salaries at the close of 2014.

Required:
M
Record the above information in the relevant accounts for the year ended 31 December 2014.
Close the accounts.
(8 marks)

Question 26 TOMASZ

Tomasz is in business as an antique dealer. The trial balance of his business at 1 January was as
SA

follows:
Dr Cr
$ $
Capital 5,000
Cash 4,200
Motor van 600
Trade payable – A 200
Trade receivable – B 300
Rent prepaid 100
–––––– ––––––
5,200 5,200
–––––– ––––––

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Cash transactions during the three months to 31 March were:


$
Purchases 2,000
Revenue 3,000
Drawings 500
Motor running expenses 350
Rent 250

At 31 March inventory was $700 and rent paid in advance amounted to $150.

Required:

(a) Prepare the trial balance at 31 March. (5 marks)

E
(b) Prepare the statement of profit or loss for the period to 31 March and a statement of
financial position at that date. (7 marks)

(12 marks)

Question 27 PUSHKOVA

Revenue
Purchases
Inventory 1 May 2013
Salaries and wages
PL
The following list of account balances was extracted from the books of Pushkova at 30 April 2014:

Dr
$

12,556
3,776
2,447
Cr
$
18,955

Motor expenses 664


M
Rent 456
Rates (local property tax) 120
Insurances 146
Packing expenses 276
Lighting and heating expenses 665
Sundry expenses 115
Motor vehicles 2,400
Fixtures and fittings 600
SA

Trade receivables 4,577


Trade payables 3,045
Cash at bank 3,876
Cash in hand 120
Drawings 2,050
Capital 12,844
–––––– ––––––
34,844 34,844
–––––– ––––––
Notes at 30 April

(1) Expenses which have been prepaid – Rates $20; Insurance $35.
(2) Expenses which are owing – Motor expenses $56; Rent $24; Sundry expenses $26.
(3) Inventory $4,998.

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Answer 1 MCQs CONTEXT OF FINANCIAL REPORTING

Item Answer Justification

1.1 A Although some types of partnership may have a separate legal entity status in certain
jurisdictions this is not a general feature.

1.2 B A partnership can usually raise more money than an individual. Risk of personal
bankruptcy also arises in a partnership and all partners are jointly liable for all
liabilities. There are few requirements for record-keeping for a sole trader (e.g. for
tax purposes) and this is less onerous than would be needed in partnership (e.g. to
determine profit share).

E
1.3 D Financial reporting concerns the presentation of financial statements including
disclosure in accordance with a financial reporting framework. It is wider than
accounting for transactions.

1.4 C Although a statement of cash flows is a financial statement (i.e. a report of historic
cash flow activities) a cash flow forecast is a management tool (e.g. to project future
finance requirements).

1.5 B

Answer 2 JAN BARTOK


PL
Directors and management will have access to more information and on a timelier
basis than is published.

Statement of profit or loss for the year ended 31 December

Revenue
$ $
25,000
Cost of sales
M
Opening inventory 1,500
Purchases 20,000
———
21,500
Less: Closing inventory (3,000)
——— (18,500)
———
Gross profit 6,500
SA

Less: Expenses
Administration 1,000
Wages 800
——— (1,800)
———
Profit for the year 4,700
———

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Statement of financial position at 31 December

$ $
Tangible non-current assets
Motor cars 2,800
Current assets
Inventory 3,000
Trade receivables 5,000
Cash in hand 100
———
8,100
———
Total assets 10,900

E
———
Capital account
Capital at 1 January 5,000
Retained earnings 4,700
———
9,700
Less: Drawings

Current liabilities
Bank overdraft
Trade payables

Total capital and liabilities


PL 1,200
2,000
———
(2,000)
———
7,700

3,200
———
10,900
———
M
Answer 3 TOMAS MAXIM

Statement of profit or loss for the year ended 31 December

$ $
Revenue 28,400
Less: Returns (200)
SA

———
28,200
Purchases 16,100
Less: Closing inventory (2,050)
——— (14,050)
———
Gross profit 14,150
Less: Expenses
Salaries 4,162
Rent 2,130
Insurance 174
General expenses 1,596
——— (8,062)
———
Profit for the year 6,088
———

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Statement of financial position at 31 December

$ $
Tangible non-current assets
Motor van 1,700
Current assets
Inventory 2,050
Trade receivables 5,060
Cash (2,628 + 50) 2,678
———
9,788
———
Total assets 11,488

E
———
Capital account
Capital introduced 4,100
Retained earnings 6,088
———
10,188
Less: Drawings

Current liabilities
Trade payables

Answer 4 MCQs FINANCIAL STATEMENTS


PL (5,100)
———
5,088

6,400
———
11,488
———

Item Answer Justification


M
4.1 B A non-current assets may be intangible. Land is not generally depreciable. An asset
by definition must be controlled (which does not necessitate ownership).

4.2 C Drawings are an appropriation of profit – they are not a financial obligation.

4.3 B Leased land and investments are tangible assets. Royalty receipts are income.
SA

4.4 A Closing inventory is not sold and so reduces cost of sales.

4.5 B Installation costs are incurred in putting the asset into first use. Servicing costs are
revenue in nature. A manufacturer’s warranty is not a capital cost of an asset
acquired (but rather a prepayment for future possible repair costs). As the cars are
purchased for resale they are inventory items (i.e. revenue expenditure).

4.6 A Self-constructed assets are capitalised in the same way as if they had been purchased.
The manager’s salary, etc is clearly a revenue expense (relating to day-to-day
operations). Costs of repairs are expensed also. A market survey is a research cost
which must be expensed when incurred because of the uncertainty of future economic
benefits (more on this later).

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Answer 5 MCQs ACCOUNTING SYSTEMS

Item Answer Justification

5.1 A Not all procedures will be formal. An accounting system of itself does not ensure
efficient operations (although a sound accounting system will be necessary to this
objective). The prevention and detection of fraud and error is just one management
objective (and so not the sole objective of a sound accounting system). Accounting
records are just one aspect of an accounting system and may be manual.

5.2 B This is the objective concerning assets at an organisation level. (The other objectives
are subsidiary internal control objectives which contribute to the organisational
objective.)

E
5.3 D Whereas the journal is a book of original entry, ledgers and registers are additional,
subsidiary records.

5.4 C A standing order is an instruction to a bank to make regular payments of fixed


amount. A goods received note is found in a purchases system. A remittance advice
may accompany a receipt from a customer or a payment to a supplier. A sales order,

(1)
system.

Answer 6 VICTOR BORISSOV

(a) April transactions

Introduction of capital
PL
sales invoice, goods despatch note and customer statement are all relevant to a sales

$ $
Cash 10,000 Capital 10,000
M
——— ———
(2) Purchase of Atari
$ $
Inventory 1,000 Capital 10,000
Cash 9,000
——— ———
10,000 10,000
SA

——— ———
(3) Purchase of Amstrad
$ $
Inventory 3,500 Capital 10,000
Cash 6,500
——— ———
10,000 10,000
——— ———
(4) Sale of Atari
$ $
Inventory 2,500 Capital 10,000
Cash 8,000 Profit 500
——— ———
10,500 10,500
––—— ———

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

(5) Rent payment


$ $
Inventory 2,500 Capital 10,000
Cash 7,700 Profit 200
——— ———
10,200 10,200
——— ———

(6) Purchase of desk


$ $
Tangible non-current assets 200 Capital 10,000
Inventory 2,500 Profit 200

E
Cash 7,500
——— ———
10,200 10,200
——— ———
(7) Purchase of Compaq
$ $

(8)
Tangible non-current assets
Inventory
Cash

Sale of Amstrad
PL 200
6,500
3,500
———
10,200
———

$
Capital
Profit
10,000

———
200

10,200
———

$
Non-current assets 200 Capital 10,000
M
Inventory 4,000 Profit 950
Cash 6,750
——— ———
10,950 10,950
——— ———

(9) Drawings
$ $
SA

Non-current assets 200 Capital 10,000


Inventory 4,000 Profit 950
Cash 6,350 ———
10,950
Less: Drawings (400)
——— ———
10,550 10,550
——— ———

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

(b) Accounting equation at 31 May

$ $
Tangible non-current assets 200 Capital, 1 May 10,550
Inventory (Compaq and IBM) 9,600 Profit 700
Cash (W) 850 ———
11,250
Less: Drawings (600)
——— ———
10,650 10,650
——— ———

WORKING

E
Cash
$
Balance at 1 May 6,350
Cash receipts $(4,500 + 1,800) 6,300
———

(c)
Balance at 31 May
PL
Less: Cash payments $(3,000 + 2,500 + 100 + 600 + 5,600)

Statement of profit or loss for the month ended 31 May

Revenue $(4,500 + 1,800)


12,650
(11,800)
———

———
850

$ $
6,300
Opening inventory 4,000
M
Purchases $(5,500 + 5,600) 11,100
———
15,100
Less: Closing inventory (9,600)
——— (5,500)
———
Gross profit 800
Less: Telephone expense (100)
SA

———
Profit for the period 700
———

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Statement of financial position at 31 May


$ $
Tangible non-current assets 200
Current assets
Inventory 9,600
Cash 850
——— 10,450
———
Total assets 10,650
———
Capital account
Capital at 1 May 10,550
Add: Profit for the period 700

E
———
11,250
Less: Drawings (600)
———
Total capital 10,650
———

Answer 7 MCQs DOUBLE ENTRY BOOKKEEPING PRINCIPLES

Item

7.1

7.2
Answer Justification

B
PL
Accruals concept underlies the basis of preparation of financial statements, not double
entry bookkeeping principles. Bookkeeping is based on the concept of a separate
business entity which may not be a separate legal entity (e.g. sole trader).

Net assets are increased by the introduction of capital and making profit. Drawings
are an appropriation of profit which reduce net assets.
M
7.3 B $
Opening net assets 5,000
Add: Profit (al fig) 2,700
Less: Drawings (700)
———
Closing net assets 7,000
———
SA

7.4 A Either 7,000 – 5,000 = 2,000 or 2,700 – 700 = 2,000

7.5 B Payments to owners of a business in their capacity as owners are appropriations


(including salaries of partners). Drawings by sole traders are an appropriation of
profit whether money or “in-kind” (e.g. goods). Interest payments are a finance cost
to the business (i.e. an expense). (Interest paid to a partner for a loan to a partnership
is also an expense as the partner receives it in the capacity of a finance provider.)

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Answer 8 ROMAN

(a) Ledger accounts


Cash a/c

$ $
1 Jan Capital a/c 350 15 Jan Purchases a/c 200
31 Jan Sales a/c 300 23 Jan Motor expenses a/c 40
31 Jan Balance c/d 410
—— ——
650 650
—— ——

E
1 Feb Balance b/d 410 7 Feb Purchases a/c 200
5 Feb Loan a/c (Denis) 300 21 Feb Rent a/c 50
8 Feb Sales a/c 150
28 Feb Sales a/c 300 28 Feb Balance c/d 910
——— ———
1,160 1,160

1 Mar Balance b/d

31 Jan Balance c/d


PL
———

910

410
Capital a/c

$
1 Jan
31 Jan
Cash a/c
I & E a/c
———

350
60
$

—— ——
M
410 410
—— ——
1 Feb Balance b/d 410
28 Feb Balance c/d 610 28 Feb I & E a/c 200
—— ——
610 610
—— ——
SA

1 Mar Balance b/d 610

Loan a/c

$ $
28 Feb Balance c/d 300 5 Feb Cash a/c 300
—— ——
1 Mar Balance b/d 300

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Motor expenses a/c

$ $
23 Jan Cash a/c 40 31 Jan I & E a/c 40
— —

Purchases a/c

$ $
15 Jan Cash a/c 200 31 Jan Trading (or I & E) a/c 200
—— ——

E
7 Feb Cash a/c 200 28 Feb Trading (or I & E) a/c 200
—— ——

Rent a/c

$ $
21 Feb

31 Jan
Cash a/c

Trading (or I & E) a/c


PL 300
——
50

$
28 Feb I & E a/c

Sales a/c

31 Jan Cash a/c


$
50

300
——

28 Feb Trading (or I & E) a/c 450 8 Feb Cash a/c 150
M
28 Feb Cash a/c 300
—— ——
450 450
—— ——

(b) List of account balances at 31 January and 28 February

31 January 28 February
SA

Dr Cr Dr Cr
$ $ $ $
Cash 410 910
Capital 350 410
Loan – 300
Motor expenses 40 –
Purchases 200 200
Rent – 50
Revenue 300 450
—— —— ——— ———
650 650 1,160 1,160
—— —— ——— ———

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

(c) Statements of profit or loss for the months ended 31 January and 28 February

31 January 28 February
$ $
Revenue 300 450
Less: Purchases (200) (200)
—— ——
Gross profit 100 250
Less: Expenses
Motor expenses (40)
Rent (50)
—— ——
Profit for the period 60 200

E
—— ——

(d) Statements of financial position as at 31 January and 28 February

31 January 28 February
$ $
Current asset
Cash

Capital
Capital b/f
Introduced
Add: Profit for month

Capital c/f
PL 410
——


350

——
60

410
910
——

410

200
——
610
Non-current liability
Loan – 300
M
—— ——
410 910
—— ——

Answer 9 PETR

(a) Cash at bank a/c


SA

$ $
5 Apr Capital a/c 300 7 Apr Purchases a/c 200
8 Apr Loan a/c 250 15 Apr Motor van a/c 150
20 Apr Revenue a/c 350 28 Apr Rent a/c 50
29 Apr Loan a/c 200
30 Apr Drawings a/c 60
30 Apr Balance c/d 240
—— ——
900 900
—— ——
1 May Balance b/d 240

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Capital a/c

$ $
30 Apr Drawings a/c 60 5 Apr Bank a/c 300
30 Apr Balance c/d 440 30 Apr I & E a/c (profit) 200
—— ——
500 500
—— ——
1 May Balance b/d 440

Tutorial note: Because Petr is a sole trader there is no requirement to distinguish a fixed
amount of capital introduced and retained earnings. However, separate accounts could be

E
kept.
Purchases a/c

$ $
7 Apr Bank a/c 200 30 Apr Trading a/c 200
—— ——

29 Apr
30 Apr
Bank a/c
Balance c/d
PL 200

——
50

250
——
$
Loan a/c

8 Apr Bank a/c


$
250

——
250
——
M
1 May Balance b/d 50

Motor van a/c

$ $
15 Apr Bank a/c 150 30 Apr Balance c/d 150
—— ——
SA

1 May Balance b/d 150

Rent a/c

$ $
28 Apr Bank a/c 50 30 Apr I & E a/c 50
— —

Revenue a/c

$ $
30 Apr Trading a/c 350 20 Apr Bank a/c 350
—— ——

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Drawings a/c

$ $
30 Apr Bank a/c 60 30 Apr Capital a/c 60
— —

(b) List of account balances at 30 April


Dr Cr
$ $
Cash at bank 240
Capital 300
Purchases 200

E
Loan 50
Motor van 150
Rent 50
Revenue 350
Drawings 60
—— ——

(c)

Revenue
Purchases
PL
Statement of profit or loss for the month ended 30 April

Less: Closing inventory (see note)


700
——

200
$

(100)
——
700
——

$
350

Cost of sales (100)


——
M
Gross profit 250
Less: Expenses
Rent (50)
——
Profit for the period 200
——
Tutorial note: It should be noted that there is a final adjustment to the list of balances at this
SA

stage in respect of closing inventory. The double entry is a credit to cost of sales and a debit to
the inventory account. The balance on the inventory account will then appear in the statement
of financial position.

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Statement of financial position as at 30 April


$ $
Tangible non-current assets
Motor van 150
Current assets
Inventory 100
Cash 240
——
340
——
Total assets 490
——
Capital account

E
Introduced 300
Add: Profit for the period 200
——
500
Less: Drawings (60)
——

Current liabilities
Loan

Total capital and liabilities

Answer 10 GRIGORY
PL 440

——
50

490
——

(a) Cash at bank a/c


M
$ $
1 Jan Capital a/c 5,000 2 Jan Motor van a/c 600
4 Jan Loan a/c (Sergei) 1,000 3 Jan Purchases a/c 1,300
13 Jan Revenue a/c 300 10 Jan Motor expenses a/c 200
20 Jan Revenue a/c 500 24 Jan Storage expenses a/c 150
27 Jan Loan a/c 350
30 Jan Drawings a/c 175
SA

31 Jan Balance c/d 4,025


——— ———
6,800 6,800
——— ———
1 Feb Balance b/d 4,025

Capital a/c

$ $
31 Jan Balance c/d 5,000 1 Jan Bank a/c 5,000
——— ———
5,000 5,000
——— ———
1 Feb Balance b/d 5,000

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Motor van a/c

$ $
2 Jan Bank a/c 600 31 Jan Balance c/d 600
—— ——
1 Feb Balance b/d 600

Purchases a/c

$ $
3 Jan Bank a/c 1,300 31 Jan Balance c/d 1,300

E
——— ———
1 Feb Balance b/d 1,300

Loan a/c

$ $
27 Jan
31 Jan
Bank a/c
Balance c/d
PL———

———
350
650

1,000
4 Jan Bank a/c

1 Feb Balance b/d

Motor van expenses a/c


———
1,000

1,000
———

650
M
$ $
10 Jan Bank a/c 200 31 Jan Balance c/d 200
—— ——
1 Feb Balance b/d 200

Revenue a/c
SA

$ $
31 Jan Balance c/d 800 13 Jan Bank a/c 300
20 Jan Bank a/c 500
—— ——
800 800
—— ——

1 Feb Balance b/d 800

Storage expenses a/c

$ $
24 Jan Bank a/c 150 31 Jan Balance c/d 150
—— ——
1 Feb Balance b/d 150

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Drawings a/c

$ $
30 Jan Bank a/c 175 31 Jan Balance c/d 175
—— ——
1 Feb Balance b/d 175

(b) Trial balance at 31 January


Dr Cr
$ $
Cash at bank 4,025

E
Capital 5,000
Motor van 600
Purchases 1,300
Loan 650
Motor van expenses 200
Revenue 800

(c)
Storage expenses
Drawings

PL
Statement of profit or loss for the month ended 31 January

Revenue
———

———

$
150
175

6,450
———
6,450
———

$
800
Purchases 1,300
M
Less: Closing inventory (800)
———
Cost of goods sold (500)
——
Gross profit 300
Less: Expenses
Motor van expenses 200
Storage expenses 150
SA

—— (350)
——
Loss for the period (50)
——

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Statement of financial position as at 31 January


$ $
Tangible non-current assets
Motor van 600
Current assets
Inventory 800
Cash 4,025
———
4,825
———
Total assets 5,425
———
Capital account

E
At 1 January 5,000
Less: Loss for the period (50)
———
4,950
Less: Drawings (175)
———

Current liability
Loan

Total capital and liabilities

Answer 11 DANA

(a)
PL
Cash at bank a/c
4,775

———
650

5,425
———
M
$ $
2 Mar Capital a/c 525 16 Mar Purchases a/c 300
29 Mar Revenue a/c 450 24 Mar Sundry expenses a/c 60
31 Mar Balance c/d 615
—— ——
975 975
—— ——
SA

1 Apr Balance b/d 615 8 Apr Purchases a/c 300


6 Apr Loan a/c (Radok) 450 22 Apr Establishment costs a/c 75
9 Apr Revenue a/c 225 30 Apr Balance c/d 1,365
30 Apr Revenue a/c 450
——— ———
1,740 1,740
——— ———

1 May Balance b/d 1,365

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Capital a/c

$ $
31 Mar Balance c/d 525 2 Mar Bank a/c 525
—— ——

30 Apr Balance c/d 525 1 Apr Balance b/d 525


—— ——

1 May Balance b/d 525

Loan a/c

E
$ $
30 Apr Balance c/d 450 6 Apr Bank a/c 450
—— ——
1 May Balance b/d 450

24 Mar Bank a/c

1 Mar Balance b/d


PL Sundry expenses a/c

60
——

60
——
$
31 Mar Balance c/d

30 Apr Balance c/d


$
60
——

60
——

1 May Balance c/d 60


M
Purchases a/c

$ $
16 Mar Bank a/c 300 31 Mar Balance c/d 300
—— ——

1 Apr Balance b/d 300


SA

8 Apr Bank a/c 300 30 Apr Balance c/d 600


—— ——
600 600
—— ——
1 May Balance b/d 600

Establishment costs a/c

$ $
22 Apr Bank a/c 75 30 Apr Balance c/d 75
— ——

1 May Balance b/d 75

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Revenue a/c

$ $
31 Mar Balance c/d 450 29 Mar Bank a/c 450
—— ——

1 Apr Balance b/d 450


9 Apr Bank a/c 225
30 Apr Balance c/d 1,125 30 Apr Bank a/c 450
——— ———
1,125 1,125
——— ———

E
1 May Balance c/d 1,125

(b) Trial balances at 31 March and 30 April

31 Mar 30 Apr
$ $ $ $
Cash at bank
Capital
Loan
Sundry expenses
Purchases
Establishment costs
Revenue
PL 615

——
60
300

975
——
525

450
——
975
——
1,365

60
600
75

——— ———
2,100
——— ———
525
450

1,125

2,100

(c) Statement of profit or loss for the two months ended 30 April
M
$ $
Sales 1,125
Less: Purchases (600)
——
Gross profit 525
Less: Expenses
SA

Miscellaneous expenses 60
Establishment costs 75
——
(135)
——
Profit for the period 390
——

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

(d) Statements of financial position as at 31 March and 30 April

31 Mar 30 Apr
$ $
Current assets
Cash 615 1,365
—— ———

Capital introduced 525 –


Capital b/f – 615
Add: Profit for month 90 300
—— ———
615 915

E
Non-current liabilities
Loan – 450
—— ———
615 1,365
—— ———

Answer 12 PATEL

(a)(i) and (b)

1 Jan
2 Jan
5 Jan
Capital a/c
Loan a/c
Revenue a/c
PL Cash at bank a/c

10,000
4,000
3,000

———
$
3 Jan
4 Jan
6 Jan
31 Jan
Motor van a/c
Purchases a/c
Motor expenses a/c
Balance c/d
$
900
2,300
250
13,550
———
17,000 17,000
M
——— ———

1 Feb Balance b/d 13,550 1 Feb Loan a/c 200


5 Feb Revenue a/c 3,200 2 Feb Drawings a/c 300
3 Feb Office equipment a/c 160
4 Feb Purchases a/c 3,500
28 Feb Balance c/d 12,590
——— ———
SA

16,750 16,750
——— ———

1 Mar Balance b/d 12,590 1 Mar Purchases a/c 2,900


2 Mar Revenue a/c 2,625 2 Mar Rent a/c 225
31 Mar Balance c/d 12,090
——— ———
15,215 15,215
——— ———

1 Apr Balance b/d 12,090

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Capital a/c

$ $
31 Jan Balance c/d 10,000 1 Jan Bank a/c 10,000
——— ———

28 Feb Balance c/d 10,000 1 Feb Balance b/d 10,000


——— ———

31 Mar Drawings a/c 580 1 Mar Balance b/d 10,000


31 Mar Balance c/d 10,520 31 Mar I & E a/c 1,100
——— ———
11,100 11,100

E
——— ———

1 Apr Balance c/d 10,520

Loan a/c

31 Jan Balance c/d

1 Feb Bank a/c


28 Feb Balance c/d
PL $
4,000
———

200
3,800
———
4,000
———
2 Jan Bank a/c

———
4,000
———
$
4,000
M
31 Mar Balance c/d 3,800 1 Mar Balance b/d 3,800
——— ———

1 Apr Balance b/d 3,800

Motor van a/c

$ $
SA

3 Jan Bank a/c 900 31 Jan Balance c/d 900


—— ——

1 Feb Balance b/d 900 28 Feb Balance c/d 900


—— ——

1 Mar Balance b/d 900 31 Mar Balance c/d 900


—— ——

1 Apr Balance b/d 900

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Purchases a/c

$ $
4 Jan Bank a/c $2,300 31 Jan Balance c/d $2,300
——— ——

1 Feb Balance b/d 2,300


4 Feb Bank a/c 3,500 6 Feb Drawings a/c 280
28 Feb Balance c/d 5,520
——— ———
5,800 5,800
——— ———

E
1 Mar Balance b/d 5,520
1 Mar Bank a/c 2,900 31 Mar I & E a/c 8,420
——— ———
8,420 8,420
——— ———

31 Jan

28 Feb
Balance c/d

Balance c/d
PL 3,000
———

6,200
———
Revenue a/c

$
5 Jan

1 Feb
5 Feb
Bank a/c

Balance b/d
Bank a/c
———
$
3,000

3,000
3,200
———
6,200 6,200
——— ———
M
1 Mar Balance b/d 6,200
31 Mar I & E a/c 8,825 2 Mar Bank a/c 2,625
——— ———
8,825 8,825
——— ———

Motor expenses a/c


SA

$ $
6 Jan Bank a/c 250 31 Jan Balance c/d 250
—— ——

1 Feb Balance b/d 250 28 Feb Balance c/d 250


—— ——

1 Mar Balance b/d 250 31 Mar I & E a/c 250


—— ——

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Drawings a/c

$ $
2 Feb Bank a/c 300
6 Feb Purchases a/c 280 28 Feb Balance c/d 580
—— ——
580 580
—— ——

1 Mar Balance b/d 580 31 Mar Capital a/c 580


—— ——

Office equipment a/c

E
$ $
3 Feb Bank a/c 160 28 Feb Balance c/d 160
—— ——

1 Mar Balance b/d 160 31 Mar Balance c/d 160

1 Apr Balance b/d

3 Mar Bank a/c


PL ——

160

——
$
225
Rent a/c

31 Mar I & E a/c


——

$
225
——

(Trading and) Income and expenditure a/c


M
$ $
31 Mar Purchases a/c 8,420 † 31 Mar Revenue a/c 8,825 †
31 Mar Balance c/d (gross profit) 1,575 * 31 Mar Transfer inventory 1,170 †
——— ———
9,995 9,995
——— ———
SA

31 Mar Motor expenses a/c 250 31 Mar Balance b/d 1,575 *


31 Mar Rent a/c 225
31 Mar Transfer capital a/c
(profit) 1,100
——— ———
1,575 1,575
——— ———

† Alternatively may be recorded in a separate trading a/c and the gross profit transferred to the I
& E a/c.

* Balancing here can be omitted.

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Inventory a/c

$ $
31 Mar Transfer I & E a/c 1,170 31 Mar Balance c/d 1,170
——— ———

1 Apr Balance b/d 1,170

Tutorial note: Inventory only needs to be brought into the ledger a/cs at a period end when I
& E a/cs are closed and profit for the period is determined. It was not specifically asked for but
is shown for completeness.

(ii) Trial balances

E
31 January 28 February
31 March*
Dr Cr Dr Dr Cr Cr
$ $ $ $ $ $
Cash at bank 13,550 12,590
12,090
Capital 10,000 10,00010,000
Loan 4,000 3,800 3,800
Motor van
Purchases
Sales
Motor expenses
Drawings
Office equipment
Rent
PL 900
2,300

250
3,000

——— ——— ——— ——— ——— ———


900
5,520

250
580
160
900
8,420
6,200
250
580
160
225
8,825

17,000 17,000 20,000 20,000 22,625 22,625


——— ——— ——— ——— ——— ———
M
* Extracted before ledger a/cs closed.

(iii) Statements of profit or loss (cumulative) for the months ended

31 January 28 February 31 March


$ $ $ $ $ $
Revenue 3,000 6,200 8,825
Opening inventory – – –
SA

Purchases 2,300 5,520 8,420


Less: Closing inventory – (720) (1,170)
——— (2,300) ——— (4,800) ——— (7,250)
——— ——— ———
Gross profit 700 1,400 1,575
Less: Expenses
Motor expenses (250) (250) (250)
Rent – – (225)
——— ——— ———
Profit/(loss) 450 1,150 1,100
——— ——— ———

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

(iv) Statements of financial position

31 January 28 February 31 March


$ $ $ $ $ $
Tangible non-current assets
Motor van 900 900 900
Office equipment – 160 160
——— ——— ———
900 1,060 1,060
Current assets
Inventory – 720 1,170
Bank 13,550 12,590 12,090
——— ——— ———

E
13,550 13,310 13,260
——— ——— ———
Total assets 14,450 14,370 14,320
——— ——— ———

Capital account
At start of month
Add: Retained earnings

Less: Drawings

Non-current liabilities
Loan
PL 10,000

———

———
450

10,450

10,450

2,800
10,000
1,150
———
11,150
(580)
———
10,570

2,600
10,000
1,100
———
11,100
(580)
———
10,520

2,600

Current liabilities
Loan 1,200 1,200 1,200
M
——— ——— ———
14,450 14,370 14,320
——— ——— ———

Tutorial note: With the exception of inventory (and retained earnings) all the amounts are as
per the trial balance.
SA

Answer 13 BOHM

Bank a/c

$ $
1 Jan Capital a/c 5,000 5 Jan Fixtures and fittings a/c 2,000
13 Jan Sales a/c 300 10 Jan Dvorak’s a/c 900
14 Jan Jovanovich’s a/c 250 14 Jan Balance c/d 2,650
——— ———
5,550 5,550
——— ———

Balance b/d 2,650


———

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Capital a/c

$ $
14 Jan Balance c/d 5,000 1 Jan Bank a/c 5,000
——— ———

Balance b/d 5,000

Fixtures and fittings a/c

$ $
5 Jan Bank a/c 2,000 14 Jan Balance c/d 2,000

E
——— ———

Balance b/d 2,000

Purchases a/c

7 Jan

14 Jan
Dvorak’s a/c

Trading a/c
PL 1,000
———
$
14 Jan

Purchases returns a/c

$
100
——
9 Jan
Trading a/c

Dvorak’s a/c
$
1,000
———

$
100
——
M
Tutorial note: Purchases returns may alternatively be credited to the purchases account and the net
amount transferred to the trading a/c.

Dvorak’s a/c

$ $
9 Jan Purchases returns a/c 100 7 Jan Purchases a/c 1,000
10 Jan Bank a/c 900
SA

——— ———
1,000 1,000
——— ———

Sales a/c

$ $
14 Jan Trading a/c 600 11 Jan Jovanovich’s a/c 300
13 Jan Bank a/c 300
—— ——
600 600
—— ——

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Sales returns a/c

$ $
12 Jan Jovanovich’s a/c 50 14 Jan Trading a/c 50
—— ——

Jovanovich’s a/c

$ $
11 Jan Sales a/c 300 12 Jan Sales returns a/c 50
14 Jan Bank a/c 250
—— ——

E
300 300
—— ——

Tutorial note: Sales returns may alternatively be debited to the sales revenue a/c and the net amount
transferred to the trading a/c.

Answer 14 IVAN TOMBS

(1)
(7)
(14)
Capital a/c

Doyle’s a/c
PL $
10,000
Sales a/c (cash sale to Greene) 1,000
100
Bank a/c

(2)
(4)
(5)
(8)
(10)
Purchases a/c
Rent a/c
Stationery a/c
Moore’s a/c
Stationery a/c
$
200
1,000
60
140
40
(11) Motor expenses 150
(12) Petros’s a/c 1,000
M
(13) Drawings 300
Balance c/d 8,210
——— ———
11,100 11,100
——— ———

Balance b/d 8,210


SA

Capital a/c

$ $
Balance c/d 10,000 (1) Bank 10,000
——— ———

Balance b/d 10,000

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Purchases a/c

$ $
(2) Bank a/c 200 Trading a/c 600
(3) Moore’s a/c 400
—— ——
600 600
—— ——

Moore’s a/c

$ $

E
(8) Bank a/c 140 (3) Purchases a/c 400
Balance c/d 260
—— ——
400 400
—— ——

(4) Bank a/c


PL $
1,000
———
Balance b/d

Rent a/c

I & E a/c
$
260

1,000
———

Stationery a/c
M
$ $
(5) Bank a/c 60 I & E a/c 100
(10) Bank a/c 40
—— ——
100 100
–— ——
SA

Petros’ a/c

$ $
(12) Bank a/c 1,000 (6) Van a/c 4,000
Balance c/d 3,000
——— ———
4,000 4,000
——— ———

Balance b/d 3,000

©2014 DeVry/Becker Educational Development Corp.  All rights reserved.    1027
FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Van a/c

$ $
(6) Petros’s a/c 4,000 Balance c/d 4,000
——— ———

Balance b/d 4,000

Sales a/c

$ $
Trading a/c 1,140 (7) Bank a/c 1,000

E
(9) Doyle’s a/c 140
——— ———
1,140 1,140
——— ———

(9) Sales a/c


PL ——
Doyle’s a/c

140

140
–—
$
(14) Bank a/c
Balance c/d
$
100

——
40

140
——

Balance b/d 40
M
Motor expenses a/c

$ $
(11) Bank a/c 150 I & E a/c 150
—— ——

Drawings a/c
SA

$ $
(13) Bank a/c 300 Balance c/d 300
—— ——

Balance b/d 300

1028 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Answer 15 VIKTOR

Bank a/c

$ $
(1) Capital a/c 1,000 (5) Rent a/c 40
(7) Sales a/c 420 (3) Electricity 100
(4) Motor car a/c 200
(6) Drawings 60
Balance c/d 1,020
——— ———
1,420 1,420
——— ———

E
Balance b/d 1,020

Capital a/c

Drawings a/c
Balance c/d PL ———
60
1,170

1,230
———
$
Bank a/c
Transfer I & E a/c (profit)

Balance b/d
———
$
1,000
230

1,230
———

1,170

Purchases a/c
M
$ $
(2) ABC 400 Trading a/c 400
—— ——

ABC a/c
SA

$ $
Balance c/d 400 (2) Purchases a/c 400
—— ——

Balance b/d 400

Tutorial note: Alternatively profit can be carried down in the I & E a/c or transferred to retained
earnings or other “accumulated profit” a/c.

©2014 DeVry/Becker Educational Development Corp.  All rights reserved.    1029
FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Sales a/c

$ $
Trading a/c 770 (5) XYZ 350
(7) Bank a/c 420
—— ——
770 770
—— ——

Electricity a/c

$ $

E
(3) Bank a/c 100 I & E a/c 100
—— ——

Rent a/c

(3) Bank a/c


PL $
40
——

$
I & E a/c

Motor car a/c


40
——
$

$
(4) Bank a/c 200 Balance c/d 200
—— ——
M
XYZ a/c

$ $
(5) Sales a/c 350 Balance c/d 350
—— ——
SA

Balance b/d 350

Drawings a/c

$ $
(6) Bank a/c 60 Transfer to capital a/c 60
—— ——

1030 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Trading a/c

$ $
Purchases 400 Sales 770
Transfer I & E a/c (gross profit) 370
—— ——
770 770
—— ——

Income & expenditure a/c

$ $

E
Electricity 100 Transfer trading a/c 370
Rent 40
Transfer capital a/c (profit) 230
—— ——
370 370

Double entries

(1) Dr Cash a/c


PL ——

Tutorial note: Requirement specified the accounts rather than the statement of profit or loss.

Answer 16 ANGELO

(a)

5,000
$ $
——

Cr Capital a/c 5,000


M
(2) Dr Rent expense a/c 300
Cr Cash a/c 300

(3) Dr Purchases a/c 2,000


Cr Cash a/c 2,000

(4) Dr Cash a/c 900


SA

Cr Sales a/c 900

(5) Dr Motor vehicle a/c 2,000


Cr Cash a/c 2,000

(6) Dr Purchases a/c 1,500


Cr Cash a/c 1,500

(7) Dr Cash a/c 2,250


Cr Sales a/c 2,250

(8) Dr Cash a/c 100


Cr Rental income a/c 100

(9) Dr Purchases a/c 1,000


Cr Trade payables a/c 1,000

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

$ $
(10) Dr Telephone a/c 75
Cr Trade payables a/c 75

(11) Dr Cash a/c 300


Dr Trade receivables a/c 1,500
Cr Sales a/c 1,800

(12) Dr Trade payables a/c 500


Cr Cash a/c 500

(13) Dr Cash a/c 600


Cr Trade receivables a/c 600

E
(14) Dr Trade payables a/c 75
Cr Cash a/c 75

(15) Dr Cash a/c 475


Cr Trade receivables a/c 475

(16)

(17)
Dr

Dr
Cr

Cash a/c
Cr

(b), (c) & (e) Ledger accounts


PL
Trade payables a/c
Cash a/c

Sales a/c

Cash a/c
300

1,800
300

1,800

$ $
M
(1) Capital 5,000 (2) Rent expense 300
(4) Sales 900 (3) Purchases (Cézanne) 2,000
(7) Sales 2,250 (5) Motor vehicle 2,000
(8) Rental income 100 (6) Purchases (Dali) 1,500
(11) Sales 300 (12) Payables (Bookworm) 500
(13) Receivables (Salvador) 600 (14) Payables (telephone) 75
(15) Receivables (Quinn) 475 (16) Payables (Bookworm) 300
SA

(17) Sales 1,800 Balance c/d 4,750


______ ______
11,425 11,425
______ ______
Balance b/d 4,750

Capital a/c

$ $
Balance c/d 5,000 (1) Cash 5,000
_____ _____
5,000 5,000
_____ _____
Balance b/d 5,000

1032 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Rent expense a/c

$ $
(2) Cash 300 Balance c/d 300
____ ____
300 300
____ ____
Balance b/d 300 Transfer to I & E a/c 300

Purchases a/c

$ $

E
(3) Cash (Cézanne) 2,000
(6) Cash (Dali) 1,500
(9) Payables (Bookworm) 1,000 Balance c/d 4,500
_____ _____
4,500 4,500

Balance b/d
PL _____
4,500

$
Sales a/c
Transfer to I & E a/c

(4)
(7)
(11)
Cash
Cash
Cash/Receivables
_____
4,500

$
900
2,250
1,800
Balance c/d 6,750 (17) Cash 1,800
M
_____ _____
6,750 6,750
_____ _____
Transfer to I & E a/c 6,750 Balance b/d 6,750

Non-current asset (Van) a/c


SA

$ $
(5) Cash 2,000 Balance c/d 2,000
_____ _____
2,000 2,000
_____ _____
Balance b/d 2,000

Rental income a/c

$ $
Balance c/d 100 (8) Cash 100
____ ____
100 100
____ ___
Transfer to I & E a/c 100 Balance b/d 100

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Trade receivables (total) a/c

$ $
(11) Sales 1,500 (13) Cash (Salvador) 600
(15) Cash (Quinn) 475
Balance c/d 425
_____ _____
1,500 1,500
_____ _____
Balance b/d 425

Trade payables (total) a/c

E
$ $
(12) Cash (Bookworm) 500 (9) Purchases (El Greco) 1,000
(14) Cash (Telephone) 75 (10) Telephone 75
(16) Cash (Bookworm) 300
Balance c/d 200

PL _____
1,075
_____
Balance b/d

Telephone a/c

$
_____
1,075
_____
200

$
(10) Trade payables 75 Balance c/d 75
M
___ ___
75 75
___ ___
Balance b/d 75 Transfer to I & E a/c 75

(Trading and) Income and expenditure a/c


SA

$ $
Purchases 4,500 Sales 6,750
Rent expense 300 Rental income 100
Telephone 75
Balance (= Profit) 1,975
_____ _____
6,850 6,850
_____ _____

1034 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

(d) List of account balances


Dr Cr
$ $
Cash 4,750
Capital 5,000
Rent expense 300
Purchases 4,500
Sales (Revenue) 6,750
Non-current asset 2,000
Rental income 100
Trade receivables 425
Trade payables 200
Telephone 75

E
______ ______
12,050 12,050
——— ———

(f) Statement of profit or loss

Sales
Less:

Gross profit
Sundry income
Cost of goods sold
Purchases PL 4,500
______
2,250
100
_____
$
6,750

2,350
Less: Other expenses
Rent 300
M
Telephone 75
____
375
———
Profit for the period 1,975
———
SA

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Statement of financial position


$ $
Non-current assets
Van 2,000

Current assets
Trade receivables 425
Cash 4,750
______
5,175
———
Total assets 7,175

E
———
$
Capital 5,000
Profit for the year 1,975
_____
Proprietor’s interest
Current liabilities
Trade payables

Total equity and liabilities

Answer 17 STEFAN

(a)
PL Bank a/c
———
6,975

200

7,175
———
M
$ $
1 Nov Capital a/c 3,000 7 Nov Fixtures and fittings a/c 560
12 Nov Sales a/c 400 23 Nov Drawings a/c 100
29 Nov A’s a/c 400 25 Nov Y’s a/c 300
28 Nov X’s a/c 400
30 Nov Balance c/d 2,440
——— ———
SA

3,800 3,800
——— ———

1 Dec Balance b/d 2,440

Purchases a/c

$ $
3 Nov X’s a/c 400 30 Nov Drawings a/c 20
5 Nov Y’s a/c 350 30 Nov Balance c/d 730
—— ——
750 750
—— ——

1 Dec Balance b/d 730

1036 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

X’s a/c

$ $
28 Nov Bank a/c 400 3 Nov Purchases a/c 400
—— ——

Y’s a/c

$ $
25 Nov Bank a/c 300 5 Nov Purchases a/c 350
30 Nov Balance c/d 50
—— ——

E
350 350
—— ——

1 Dec Balance b/d 50

Fixtures and fittings a/c

7 Nov Bank a/c

1 Dec Balance b/d


PL 560
——
$

560
30 Nov Balance c/d

Sales a/c
$
560
——

$ $
M
8 Nov A’s a/c 500
30 Nov Balance c/d 900 12 Nov Bank a/c 400
—— ——
900 900
—— ——

1 Dec Balance b/d 900


SA

A’s a/c

$ $
8 Nov Sales a/c 500 29 Nov Bank a/c 400
30 Nov Balance c/d 100
—— ——
500 500
—— ——

1 Dec Balance b/d 100

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Drawings a/c

$ $
23 Nov Bank a/c 100
30 Nov Purchases a/c 20 30 Nov Balance c/d 120
—— ——
120 120
—— ——

1 Dec Balance b/d 120

Capital a/c

E
$ $
1 Nov Bank a/c 3,000
30 Nov Balance c/d 3,000
——— ———
3,000 3,000

(b)

Cash at bank
Capital
Purchases
PL
Trial balance at 30 November
———

1 Dec Balance b/d

Dr
$
2,440

730
———

3,000

Cr
$

3,000

Trade payables (Y) 50


M
Fixtures and fittings 560
Sales 900
Trade receivables (A) 100
Drawings 120
——— ———
3,950 3,950
——— ———
SA

(c) Statement of profit or loss for the month ended 30 November

$ $
Sales 900
Purchases 730
Less: Closing inventory (250)
—— (480)
——
Gross profit 420
——

1038 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Statement of financial position at 30 November


$ $
Non-current assets
Fixtures and fittings 560
Current assets
Inventory 250
Trade receivables 100
Cash 2,440
———
2,790
———
Total assets 3,350
———

E
Capital account
Capital introduced 3,000
Add: Profit for the month 420
———
3,420
Less: Drawings

Current liabilities
Trade payables

Total capital and liabilities


PL (120)
———
3,300

———
50

3,350
———

Answer 18 R RYBIN
M
(a) Bank a/c

$ $
1 Dec Capital a/c 5,000 1 Dec Fixtures and fittings a/c 1,000
31 Dec Didnko’s a/c 600 7 Dec Rent a/c 40
31 Dec Sales a/c 100 10 Dec Electricity 150
10 Dec Motor van a/c 1,500
SA

20 Dec Stationery a/c 200


31 Dec Agladze’ a/c 400
31 Dec Buczak’s a/c 300
31 Dec Office equipment a/c 250
31 Dec Drawings a/c 100
31 Dec Balance c/d 1,760
——— ———
5,700 5,700
——— ———

1 Jan Balance b/d 1,760

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Agladze’s a/c

$ $
31 Dec Bank a/c 400 9 Dec Purchases a/c 400
—— ——

Buczak’s a/c

$ $
31 Dec Bank a/c 300 13 Dec Purchases a/c 300
—— ——

E
Coke’s a/c

$ $
31 Dec Balance c/d 140 20 Dec Purchases a/c 140
—— ——

10 Dec Sales a/c


PL
Didnko’s a/c

$
600
——
1 Jan Balance b/d

31 Dec Bank a/c

Drawings a/c
140

$
600
——

$ $
M
31 Dec Bank a/c 100 31 Dec Balance c/d 100
—— ——
1 Jan Balance b/d 100

Ergo’s a/c
SA

$ $
14 Dec Sales a/c 800 31 Dec Balance c/d 800
—— ——
1 Jan Balance b/d 800

Electricity a/c

$ $
10 Dec Bank a/c 150 31 Dec Balance c/d 150
—— ——
1 Jan Balance b/d 150

1040 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Office equipment a/c

$ $
31 Dec Bank a/c 250 31 Dec Balance c/d 250
—— ——
1 Jan Balance b/d 250

Fixtures and fittings a/c

$ $
1 Dec Bank a/c 1,000 31 Dec Balance c/d 1,000

E
——— ———
1 Jan Balance b/d 1,000

Fesan’s a/c

$ $
29 Dec Sales a/c

1 Jan Balance b/d

10 Dec Bank a/c


PL 300
——

1,500
300

Motor van a/c

$
31 Dec Balance c/d

31 Dec Balance c/d


300
——

$
1,500
——— ———
M
1 Dec Balance b/d 1,500

Purchases a/c

$ $
9 Dec Agladze’s a/c 400
13 Dec Buczak’s a/c 300
SA

20 Dec Coke’s a/c 140 31 Dec Balance c/d 840


—— ——
840 840
—— ——
1 Jan Balance b/d 840

Rent a/c

$ $
7 Dec Bank a/c 40 31 Dec Balance c/d 40
—— ——
1 Jan Balance b/d 40

©2014 DeVry/Becker Educational Development Corp.  All rights reserved.    1041
FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Sales a/c

$ $
10 Dec Didnko’s a/c 600
14 Dec Ergo’s a/c 800
29 Dec Fesan’s a/c 300
31 Dec Balance c/d 1,800 31 Dec Bank a/c 100
——— ———
1,800 1,800
——— –——
1 Jan Balance b/d 1,800

E
Stationery a/c

$ $
20 Dec Bank a/c 200 31 Dec Balance c/d 200
—— ——
1 Jan Balance b/d

31 Dec Balance c/d


PL 200

Capital a/c

$
5,000
———
1 Dec Bank a/c

1 Jan Balance b/d


5,000
———
$

5,000
M
(b) Trial balance at 31 December

Dr Cr
$ $
Cash at bank 1,760
Capital 5,000
Drawings 100
Coke 140
SA

Ergo 800
Electricity 150
Office equipment 250
Fixtures and fittings 1,000
Fesan 300
Motor van 1,500
Purchases 840
Rent 40
Sales 1,800
Stationery 200
——— ———
6,940 6,940
——— ———

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

(c) Statement of profit or loss for the month ended 31 December


$ $
Revenue 1,800
Purchases 840
Less: Closing inventory (150)
——
Cost of sales (690)
———
Gross profit 1,110
Less: Expenses
Electricity 150
Rent 40
Stationery 200

E
—— (390)
———
Profit for the period 720
———

Statement of financial position at 31 December

Non-current assets
Fixtures and fittings
Office equipment
Motor van

Current assets
Inventory
Trade receivables (800 + 300)
PL $

150
1,100
$

1,000
250
1,500
———
2,750

Cash in hand 1,760


M
———
3,010
———
Total assets 5,760
———

Capital account
Capital introduced 5,000
SA

Profit for month 720


———
5,720
Less: Drawings (100)
———
5,620
Current liabilities
Trade payable 140
———
5,760
———

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Answer 19 NIXON

(a) Bank a/c

$ $
1 Jan Balance b/d 343 5 Jan Wages a/c 12
7 Jan Smith’s a/c 18 9 Jan Max’s a/c 21
11 Jan Sales a/c 64 14 Jan Wages a/c 14
21 Jan Sales a/c 110 14 Jan Purchases a/c 75
23 Jan Harvey’s a/c 25 15 Jan Rich’s a/c 162
28 Jan Sales a/c 84 20 Jan Fixtures and fittings a/c 32
31 Jan Sales a/c 30 21 Jan Wages a/c 17
23 Jan Office expenses a/c 3

E
28 Jan Wages a/c 15
31 Jan Balance c/d 323
—— ——
674 674
—— ——

1 Feb

31 Jan
Balance b/d

Balance c/d
PL 323

Capital a/c

1,091
———
1 Jan
31 Jan
Balance b/d
I & E a/c
1,049

———
42
$

1,091 1,091
——— ———
M
1 Feb Balance b/d 1,091

Fixtures and fittings a/c

$ $
SA

1 Jan Balance b/d 198


20 Jan Bank a/c 32 31 Jan Balance c/d 230
—— ——
230 230
—— ——

1 Feb Balance b/d 230

1044 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Sales a/c

$ $
31 Jan Trading a/c 412 2 Jan Harvey’s a/c 124
11 Jan Bank a/c 64
21 Jan Bank a/c 110
28 Jan Bank a/c 84
31 Jan Bank a/c 30
—— ——
412 412
—— ——

E
Wages a/c

$ $
5 Jan Bank a/c 12 31 Jan I & E a/c 58
14 Jan Bank a/c 14
21 Jan
28 Jan
Bank a/c
Bank a/c

PL 17
15
——
58
——

Purchases a/c

$
——
58
——

$
5 Jan Rich’s a/c 150 31 Jan Trading a/c 225
M
14 Jan Bank a/c 75
—— ——
225 225
—— ——

Office expenses a/c


SA

$ $
23 Jan Bank a/c 3 31 Jan I & E a/c 3
— —

Receivables – Smith’s a/c

$ $
1 Jan Balance b/d 18 7 Jan Bank a/c 18
— —

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Receivables – Harvey’s a/c

$ $
1 Jan Balance b/d 39 23 Jan Bank a/c 25
2 Jan Sales a/c 124 31 Jan Balance c/d 138
—— ——
163 163
—— ——

1 Feb Balance b/d 138

Receivables – Moon’s a/c

E
$ $
1 Jan Balance b/d 26 31 Jan Balance c/d 26
—– ——

1 Feb Balance b/d 26

15 Jan Bank a/c


PL Payables – Rich’s a/c

$
162

——
162
——
1 Jan
5 Jan
Balance b/d
Purchases a/c
——
$
12
150

162
——
M
Payables – Max’s a/c

$ $
9 Jan Bank a/c 21 1 Jan Balance b/d 21
—— ——
SA

Inventory a/c

$ $
1 Jan Balance b/d 458 31 Jan Trading a/c 458
—— ——

31 Jan Trading a/c 374 31 Jan Balance c/d 374


—— ——

1 Feb Balance b/d 374

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

(b) Trial balance (extracted before the ledger accounts were closed)

Dr Cr
$ $
Cash at bank 323
Capital 1,049
Fixtures and fittings 230
Sales 412
Wages 58
Purchases 225
Office expenses 3
Receivables
Harvey 138

E
Moon 26
Inventory 458
——— ———
1,461 1,461
——— ———

(c)

Revenue
Opening inventory
Purchases

Less: Closing inventory


PL
Statement of profit or loss for the month ended 31 January

458
225
——
683
(374)
——
$
412

Cost of goods sold (309)


——
M
Gross profit 103
Less: Expenses
Wages 58
Office expenses 3
—— (61)
——
Profit for the period 42
SA

——

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Statement of financial position at 31 January


$ $
Non-current assets
Fixtures and fittings 230
Current assets
Inventory 374
Trade receivables (138 + 26) 164
Cash 323
—— 861
———
1,091
———
Capital account

E
At 1 January 1,049
Add: Profit for the period 42
———
1,091
———
Answer 20 MCQs LEDGER ACCOUNTING

Item

20.1

20.2
Answer Justification

A
PL
Purchases will be reduced to reflect the removal of goods (at cost). No sale is
recognised. Double-entries are not made to the inventory account for transactions
involving goods. Inventory is effectively unsold purchases and dealt with as a period-
end adjustment (see later).

20.3 B A bank account may be overdrawn and hence a liability. Sales revenue is an income
item which is closed to the income and expenditure account (so does not have a
M
balance) which in turn is closed with a transfer to retained earnings (so does not have
a balance). The balance on the inventory account at the end of the year must
represent an asset (i.e. debit balance).

20.4 D Of the errors suggested only a transposition error will create a difference between
credit and debit entries.
SA

20.5 B Errors of omission are not detected by the trial balance. It can be extracted at any
time. It does not prove the arithmetic accuracy of the books (e.g. as well as omissions
there could be compensating errors). Financial statements cannot be prepared directly
from a trial balance as further adjustments will be required.

Answer 21 DAMIEN
Discounts a/c

$ $
Discount allowed to Felix Discount received from suppliers
(3%  $500) 15 (5%  $260 – settlement only) 13
I & E a/c 2
—— ——
15 15
—— ——

Tutorial note: Total net expense to I & E as result of discounts = $2.

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Answer 22 RICARDO
Revenue a/c

$ $
2 Jun Claire – receivable a/c 8,500
14 Jun Hywel – receivable a/c 9,000
20 Jun Cash a/c 6,000
27 Jun Trading a/c 28,500 24 Jun Mandy – receivable a/c 5,000
——— ———
28,500 28,500
——— ———

E
Sales returns

$ $
22 Jun Claire – receivable 1,000 27 Jun Trading a/c 1,000
——— ———

13 Jun
21 Jun
Georgina – payable a/c
Andrew – payable a/c
PL
Tutorial note: Sales returns may alternatively be debited to the sales revenue a/c.

$
12,000
4,500
———
16,500
Purchases a/c

27 Jun Trading a/c


$

16,500
———
16,500
——— ———
M
Cash a/c

$ $
20 Jun Sales a/c 6,000 25 Jun Georgina – payable 11,160
24 Jun Claire – receivable 7,125 27 Jun Andrew – payable 4,410
25 Jun Hywel – receivable 9,000 27 Jun Balance c/d 6,555
——— ———
SA

22,125 22,125
——— ———
Bal b/d 6,555

Discounts allowed a/c

$ $
24 Jun Claire – receivable 375 27 Jun I & E a/c 375
—— ——
375 375
—— ——

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Discounts received a/c

$ $
25 Jun Georgina – payable 840
27 Jun I & E a/c 930 27 Jun Andrew – payable 90
—— ——
930 930
—— ——

Claire – receivable a/c

$ $
2 Jun Sales a/c 8,500 22 Jun Sales returns 1,000

E
24 Jun Cash a/c 7,125
24 Jun Discounts allowed a/c 375
——— ———
8,500 8,500
——— ———

14 Jun Sales a/c


PL
Hywel – receivable a/c

———
$
9,000 25 Jun

Mandy – receivable a/c

$
Cash a/c
$
9,000
———

$
24 Jun Sales a/c 5,000 27 Jun Balance c/d 5,000
M
——— ———
Balance b/d 5,000

Georgina – payable a/c

$ $
25 Jun Cash a/c 11,160 13 Jun Purchases a/c 12,000
SA

25 Jun Discounts received a/c 840


——— ———
12,000 12,000
——— ———

Andrew – payable a/c

$ $
27 Jun Cash a/c 4,410 21 Jun Purchases a/c 4,500
27 Jun Discounts received a/c 90
——— ———
4,500 4,500
——— ———

1050 ©2014 DeVry/Becker Educational Development Corp.  All rights reserved.
STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Trial balance at 27 June


Dr Cr
$ $
Revenue 28,500
Purchases 16,500
Cash 6,555
Sales returns 1,000
Mandy – receivable 5,000
Discounts allowed 930
Discounts received 375
——— ———
29,430 29,430
——— ———

E
Answer 23 MCQs CREDIT TRANSACTIONS

Item Answer Justification

23.1 C

23.2

23.3

Answer 24 DINO
A

A
PL
A settlement discount is given for prompt payment so it is not recognised until
payment is received (when the discount allowed is recognised as expense). When a
trade discount is given a sale is recorded at the net amount.

Both purchases and trade payables will be reduced initially. Only if the goods had
been paid for will there be a subsequent recording of a cash refund received (or a
subsequent payment to the same supplier may be reduced accordingly).

(a) Water usage a/c


M
$ $
30.4.2014 Cash 1,000 I & E a/c (W1) 750
31.12.2014 Balance c/d 250 
_____ _____
1,000 1,000
_____ _____
SA

1.1.2015 Balance b/d 250 I & E a/c 1450 


1.6.2015 Cash 1,600 31.1.2015 Balance c/d (W2) 400
_____ _____
1,850 1,850
_____ _____
1.1.2016 Balance b/d 400

 denotes balancing figure.

WORKINGS

(1) Expense for period 1.4 – 31.12.2014: 9/12  1,000 = $750


(2) 3 months prepaid: 3/12  1,600 = $400

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

(b)
Water usage a/c
$ $
31.12.2014 Balance c/d 750  I & E a/c 750 †
_____ _____
750 750
_____ _____
31.3.2015 Cash 1,000 1.1.2015 Balance b/d 750
31.12.2015 Balance c/d 1,200 I & E a/c 1,450 †
_____ _____
2,200 2,200

E
_____ _____
1.1.2016 Balance b/d 1,200

† Tutorial note: The I & E a/c charges must be the same as determined in (a)!

Answer 25 A CREW

31 Dec Balance per TB


PL Stationery a/c

$
560

——
560
31 Dec
31 Dec
I & E a/c
Balance c/d
$
545

——
15

560
—— ——
M
1 Jan Balance b/d 15

Rent a/c

$ $
31 Dec Balance per TB 900 31 Dec I & E a/c 1,200
31 Dec Balance c/d 300
SA

——— ———
1,200 1,200
——— ———

1 Jan Balance b/d 300

Rates a/c

$ $
31 Dec Balance per TB 380 31 Dec I & E a/c 310
31 Dec Balance c/d 70
—— ——
380 380
—— ——
1 Jan Balance b/d 70

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Lighting and heating a/c

$ $
31 Dec Balance per TB 590 31 Dec I & E a/c 605
31 Dec Balance c/d 15
—— ——
605 605
—— ——
1 Jan Balance b/d 15

Insurance a/c

E
$ $
31 Dec Balance per TB 260 31 Dec I & E a/c 190
31 Dec Balance c/d 70
—— ——
260 260
—— ——
1 Jan Balance b/d

31 Dec Balance per TB


PL 2,970
———
70

Wages and salaries a/c

$
31 Dec I & E a/c

Tutorial note: As an alternative to c/d on the individual expense a/cs they may be transferred to
$
2,970
———

prepayment & accrued expense ledger a/cs as follows:


M
Prepayments a/c

$ $
31 Dec Stationery 15
31 Dec Rates 70
31 Dec Insurance 70 31 Dec Balance c/d 155
—— ——
SA

155 155
—— ——
1 Jan Balance b/d 155

Accrued expenses a/c

$ $
31 Dec Rent 300
31 Dec Balance c/d 315 31 Dec Light and heat 15
—— ——
315 315
—— ——
1 Jan Balance b/d 315

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

Answer 26 TOMASZ

(a) Trial balance at 31 March


Dr Cr
$ $
Capital 5,000
Cash at bank (W) 4,100
Motor van 600
Trade payable A 200
Trade receivable B 300
Rent 350
Purchases 2,000
Revenue 3,000

E
Drawings 500
Motor running expenses 350
——— ———
8,200 8,200
——— ———
WORKING

Balance b/d
Revenue a/c
PL ———
$
4,200
3,000
Bank a/c

Purchases a/c
Drawings a/c
Motor running expenses a/c
Rent a/c
Balance c/d
2,000
500
350
250
4,100
———
$

7,200 7,200
——— ———
M
(b) Statement of profit or loss for the three months ended 31 March

$ $
Revenue 3,000
Purchases 2,000
Less: Closing inventory (700)
——— (1,300)
SA

———
Gross profit 1,700
Less: Expenses
Motor running expenses 350
Rent (350 – 150) 200
——— (550)
———
Profit for the period 1,150
———

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STUDY QUESTION BANK – FINANCIAL ACCOUNTING (F3/FFA)

Statement of financial position at 31 March


$ $
Non-current assets
Motor van 600
Current assets
Inventory 700
Trade receivables 300
Prepayment 150
Cash 4,100
———
5,250
———
Total assets 5,850

E
———

Capital account
At 1 January 5,000
Add: Profit for the period 1,150
———

Less: Drawings

Current liabilities
Trade payables

Total capital and liabilities


PL 6,150
(500)
———
5,650

———
200

5,850
———

Answer 27 PUSHKOVA
M
Statement of profit or loss for the year ended 30 April 2014
$ $
Revenue 18,955
Opening inventory 3,776
Purchases 12,556
———
16,332
SA

Less: Closing inventory (4,998)


———
Cost of sales (11,334)
———
Gross profit 7,621
Less: Expenses
Insurance 111
Lighting and heating 665
Motor expenses 720
Packing expenses 276
Rates 100
Rent 480
Salaries 2,447
Sundry expenses 141
——— (4,940)
———
Profit for the year 2,681
———

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FINANCIAL ACCOUNTING (F3/FFA) – STUDY QUESTION BANK

E
PL
M
SA

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E
PL
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t Question practice for every topic


t Model answers and workings
t Tutorial notes

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