FA- Interim Mock

Which of the items listed below could appear in a company’s statement of cash flows?

(i) Dividends received.

(ii) Bonus issue.

(iii) Irrecoverable debts written off.

(iv) Profit on sale of a fixed asset.

(v) Repayment of loan

• (i), (ii) and (iv)

• (i), (ii) and (iii)

• (i) and (iv)

• (i) and (v)

At 31 May 2008, Janet’s general ledger included the following balances:

Trade receivables $137,850

Allowance for receivables at 1st June 2007 $2,492

Janet’s allowance for receivable should be revised to $2,757

How should receivables be reported on Janet’s Statement of Financial Position?

• Current asset of $137,850, Current liability $2,757

• Current asset of $135,093

• Current asset of $137,850, Current liability $2,492

• Current asset of $135,358

When a trade discount is given to a customer the double entry is as follows:

Dr Discounts allowed

Cr Receivables

Is this statement true or false?

• True

• False

On 1 August 2007 Ernie was owed $55,000 by his credit customers. During the year Ernie’s

credit sales totalled $612,700. Discounts allowed totalled $3,500, Irrecoverable debts $800

and dishonoured cheques amounted to $6,500. On 31 July 2008 Eric was owed $62,550 from

his credit customers.

What was the amount received from credit customers during the year ended 31 July 2008?

• $614,350

• $594,350

• $607,350

• $732,450

Ed’s year end is 30 September. He depreciates office furniture at 15% per annum on the

straight line basis. A full year’s depreciation is charged in the year an asset is purchased, and

no depreciation is charged in the year it is sold.

In March 2005 Ed bought office furniture for $80,000.

If he sells the office furniture for $39,000 in July 2008, what will be Ed’s profit or loss on

disposal?

• A profit of $7,000

• A loss of $7,000

• A profit of $5,000

• A loss of $5,000

Which of the following statements describes current assets?

• Assets which are currently located on the business premises

• Assets which are used to conduct the organisation’s current business

• Assets which are expected to be converted into cash in the short term

• Assets which are not expected to be converted into cash in the short term

Bill uses the first in first out method of inventory valuation. At 1 May 2008 he had 60 units in

inventory at a total value of $1,320. The movement on his inventory in May 2008 was:

Receipts

14 May 120 units at $22.20

26 May 150 units at $22.30

Sales

18 May 90 units

28 May 80 units

What is the value of Bill’s inventory at 31 May 2008?

• $3,547

• $3,552

• $3,567

• $3,568

The following sales tax account has been provided by Claire for the quarter ended

31 December 2008. The account was prepared by an inexperienced book keeper.

What is the correct sales tax balance for the quarter ended 31 December 2008?

• $21,025 debit

• $40,975 credit

• $21,025 credit

• $61,775 credit

A company had provided income tax for the previous year of $90,000 however it paid income

tax of $87,000 this year. At the year-end, the company estimates that $92,000 is owed in

relation to income tax for the current year.

What amount will be shown in the income statement account for the current year-end in

respect of the income tax?

• $89,000

• $92,000

• $87,000

• None of the above

Which of the following are books of prime entry?

(i) Cash book

(ii) Bank statements

(iii) The journal

(iv) Sales returns day book

(v) The general ledger

• All the above

• (i), (ii) and (iii) and (iv)

• (i), (iii) and (iv) and (v)

• (i), (iii) and (iv)