ACCA Certified Accounting Technician Examination Paper T3 (INT) 1 When goods are sold to a customer on credit, what accounting

g entries should be made? Debit A Sales account Credit Cash account Sales account Sales account Trade receivables account

B Trade receivables account C D Cash account Sales account

2 At 31 October 2009 Dongs statement of financial position reported non-current assets with a carrying amount of $237,950. In the year to 31 October 2010, he scrapped assets with a carrying amount of $12,890, and bought new assets for $19,500. He has calculated that depreciation for the year to 31 October 2010 is $46,900. What value should be reported for non-current assets in his statement of financial position at 31 October 2010? A $244,560

B $197,660 C D $278,240 $184,440

3 At 1 November 2009, Arif had a prepayment of $820 for vehicle expenses. During the year to 31 October 2010 he recorded the following in relation to vehicle expenses: (i) invoices for $19,630; and (ii) credit notes for $255. He has extracted his trial balance before calculating his closing accruals and prepayments. What is the correct debit balance for vehicle expenses on his trial balance at 31 October 2010? A $20,705

B $19,375 C D $20,195 $18,555

4 Shari is carrying out the reconciliation between the balance on her trade payables control account in her general ledger and the list of balances in her purchase ledger. She has found the following errors: (i) a credit balance on a suppliers account has been listed as a debit balance; (ii) an invoice was recorded in the purchase day book for the wrong value; and
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(iii) no record has been made of discount received from a supplier. Which of these errors require an entry in the trade payables control account in the general ledger? A (i), (ii) and (iii)

B (i) and (ii) only C D (ii) and (iii) only (i) and (iii) only

5 Davindra is reconciling the total of the list of balances from her sales ledger to the balance on the trade receivables control account. The total of the list of balances is $25,627. She has discovered two errors: (i) a customers account has been overcast by $99; and (ii) an invoice for $89 has been treated as a credit note. What is the corrected total of the list of balances from her sales ledger? A $25,617

B $25,350 C D $25,439 $25,706

6 Jacinta is preparing her statement of financial position at 31 October 2010. The last electricity invoice she received was for $858. This was for the three months to 31 August 2010. Jacinta assumes that electricity costs are constant throughout the year. How should the accrual for electricity be reported in Jacintas statement of financial position at 31 October 2010? A as a current liability of $286

B as a current liability of $572 C D 7 as a current asset of $286 as a current asset of $572 Vernon thinks the following mistakes may have been made in his accounting records:

(i) a credit sale was recorded at the wrong value in the sales day book; and (ii) a cheque issued to a credit supplier was debited to the purchases account. The credit entry was made correctly. Which of the mistakes will be revealed by extracting a trial balance?

(i) only

B (ii) only C D both (i) and (ii) neither (i) nor (ii)

8 At 31 October 2010, Jemma was owed $138,644 by her customers. She has calculated that her receivables allowance should be $2,600. How should receivables be reported in Jemmas statement of financial position at 31 October 2010? A as a current asset of $136,044

B as a current asset of $138,644 and a current liability of $2,600 C D as a current liability of $136,044 as a current liability of $138,644 and a current asset of $2,600

9 At 1 December 2009 Giordis receivables allowance was $1,488. At 30 November 2010 the balance on his trade receivables account was $231,860. He has decided that balances totalling $2,437 are irrecoverable and should be written off and that his receivables allowance should be revised to 075% of the remaining balances. What amount should be charged to Giordis income statement for receivables expense in the year to 30 November 2010 (calculated to the nearest $1)? A $1,721

B $2,204 C D $2,670 $233

10 In the year ended 30 November 2010, Karl sold a machine for $5,800. The machine had been bought for $15,000 in July 2006. Karl depreciates machinery at 20% per annum on a reducing balance basis. He charges a full years depreciation in the year an asset is purchased, and no depreciation in the year of sale. What was the profit or loss on disposal of the machine? A $344 loss

B $344 profit C D $2,800 loss $2,800 profit

11 Eoghan charges depreciation on machinery at a rate of 20% per annum on the reducing balance basis. In the year to 30 November 2009 he had incorrectly treated capital expenditure of $5,000 as revenue expenditure. The error has not yet been corrected. How is his profit for the year to 30 November 2010 affected by the error? A understated by $800

B understated by $1,000 C D overstated by $800 overstated by $1,000

12 Under the terms of a warranty, Bev has agreed to pay compensation to a customer. As they cannot agree on the value of the compensation, they have agreed to submit the dispute to arbitration. It is not clear when the arbitration hearing will take place, but Bevs legal advisor has told her that it will not be before January 2011. The legal advisor has also estimated the likely final settlement. How should the claim be dealt with in Bevs statement of financial position at 31 October 2010? A it can be ignored until the dispute has finally been settled

B included in trade payables as a current liability C D included in trade payables as a non-current liability a provision should be recognised

13 Which of the following statements is correct? A financial statements of a sole trader must be prepared by a qualified accountant

B financial statements do not provide useful information to lenders C D all the information needs of the owner are met by the financial statements financial statements are intended to meet the needs of a number of user groups

14 Veronica took out a bank loan for $60,000 on 30 September 2010, and agreed to repay $2,000 of capital per month starting on 31 October 2010, but actually made the first repayment on 12 November 2010. How should the outstanding capital on the loan be reported on her statement of financial position at 31 October 2010? Current liability A $24,000 Non-current liability $34,000 $36,000 $34,000 $32,000
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B $24,000 C D $26,000 $26,000

15 Elma is preparing her extended trial balance. Which column(s) should closing inventory be extended into? Income statement A Debit Statement of financial position Credit Debit Debit No entry

B Credit C D No entry Credit

16 Jan has extended and totalled the entries on her extended trial balance, but has not yet calculated the profit or loss for the year. The total of each column is: Income statement Debit $275,654 Credit $263,864 Statement of financial position Debit $275,573 Credit $287,363

What is Jans profit or loss for the year? A $23,499 profit

B $23,499 loss C D $11,790 profit $11,790 loss

17 Floyd calculated that his profit for the year was $65,285. He then found that he had treated an accrual of $189 as a prepayment. When he corrects the error, what is his revised profit for the year? A $65,096

B $65,474 C D $64,907 $65,663

18 As defined in the IASBs Framework for the preparation and presentation of financial statements, which qualitative characteristic of financial reporting requires accounting information to be free from material error and bias? A comparability

B understandability C D relevance reliability

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19 At 1 November 2009 the value of Claudias net assets was $127,554. At 31 October 2010 the value was $174,529. During the year to 31 October 2010 Claudia introduced $35,000 of capital and her drawings were $17,150. What was Claudias profit for the year to 31 October 2010? A $64,825

B $29,125 C D $11,975 $46,975

20 In the year to 31 October 2010, Vlads sales were $142,200, all of which were made at a mark-up of 20%. His opening inventory value was $5,400 and his closing inventory value was $3,600. What was the value of Vlads purchases in the year to 31 October 2010? A $120,300

B $116,700 C D $111,960 $118,500

21 Zhou sells building materials. One of his suppliers agreed to accept some building materials in settlement of an outstanding balance due by Zhou. In which of Zhous general ledger accounts should entries be made? A trade receivables and trade payables

B trade payables and bank C D sales and trade payables sales and trade receivables

22 When goods are sold on credit at a prot, what is the effect on the assets and liabilities of the seller? Assets A increase Liabilities do not change do not change reduce do not change

B do not change C D do not change reduce

23 Ricardo pays to rent car parking spaces outside his office. On occasions, he is able to sublet these. During the year to 30 April 2010, the following entries were recorded in his rental ledger account: rent paid $4,853; an additional invoice for $150; and cash of $822 received from subletting the parking spaces.

What is the net balance on the rental ledger account that should be included in Ricardos trial balance at 30 April 2010? A $3,881 debit

B $3,881 credit C D 24 $4,181 debit $4,181 credit

Which body issues International Financial Reporting Standards? A The International Federation of Accountants

B The International Accounting Standards Board C D The International Accounting Standards Committee The Standards Advisory Council

The following information relates to questions 25 and 26: At 1 June 2009 the cost of Ramons machinery was $189,751 and the accumulated depreciation balance was $64,008. During the year to 31 May 2010, he acquired new machinery at a cost of $27,500 and sold a machine which had cost $15,000 for $5,600. The accumulated depreciation on this machine at the date of disposal was $9,100. The depreciation charge on machinery for the year to 31 May 2010 was $23,200. 25 What is the total charge which should be included in Ramons income statement for the year to 31 May 2010? A $22,900

B $23,500 C D $28,800 $32,300

26 What value should be reported in Ramons statement of nancial position at 31 May 2010 for machinery at cost? A $124,143
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B $202,251 C D 27 $207,251 $232,251

Which of the following will require an entry in a suspense account? (i) a customer paid $190 to settle an invoice with a value of $109; (ii) the debit and credit totals of the trial balance did not agree. A (i) only

B (ii) only C D both (i) and (ii) neither (i) nor (ii)

28 When carrying out the reconciliation between the balance on the trade payables control account in the general ledger and the list of balances in the personal ledger, you discovered that: (i) a suppliers balance of $890 had been included in the list of balances as $980; (ii) a suppliers invoice for $220 had been entered in the purchases day book as $202. Which of these errors require an entry in the general ledger? A both (i) and (ii)

B neither (i) nor (ii) C D (i) only (ii) only

29 Before making any adjustments, the balance on the bank account in Freemas general ledger is $2,564 credit. She knows that to complete her bank reconciliation, she needs to deal with the following: (i) a cheque for $420 has not been presented at the bank; (ii) a lodgement for $1,200 has not been credited on her bank statement; and (iii) she has not recorded bank charges of $470. What overdraft balance should be reported on Freemas statement of nancial position? A $1,784

B $2,094 C D $2,254 $3,034

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30 Which of the following statements is correct? A a prepayment arises when an expense is incurred before it is paid

B an accrued expense is recorded when the payment is made C D prepaid expenses reduce the value of assets accrued expenses increase the value of liabilities

The following information relates to questions 31 and 32: At 31 May 2010, Shelina was owed $38,286 by her customers, and her receivables allowance was $1,157. She wishes to write off a balance of $178 as irrecoverable. At 31 May 2009, her receivables allowance was $1,284. 31 What charge should be reported in Shelinas income statement for the year to 31 May 2010 for receivables expense? A $51

B $305 C $1,157

D $1,335 32 What value should be reported in Shelinas statement of nancial position at 31 May 2010 for receivables? A $36,951

B $37,129 C D $37,307 $38,235

33 Cameron makes capital repayments of $558 on 10th of each month on a bank loan. At 31 May 2010 the capital balance on the loan was $18,414. How should the loan be reported in Camerons statement of nancial position at 31 May 2010? Current liability A nil Non-current liability $18,414 nil $11,718 $6,696

B $18,414 C D $6,696 $11,718

34 Mikel has been contacted by a customer because a part he supplied has damaged one of the customers machines. The customer has asked Mikel to pay costs of $5,500. Mikels offer to pay $3,000 has been refused by the customer, leading to legal action. Mikels solicitor has told him that the court case will not take place until late 2011, and that it is almost certain that he will be required to pay $4,000. What provision should Mikel make in his statement of nancial position at 30 April 2010? A nil

B $3,000 C D $4,000 $5,500

35 When completing the extended trial balance, in which column should the closing balance for prepayments be entered? A income statement debit

B income statement credit C D statement of nancial position debit statement of nancial position credit

36 Rachids extended trial balance has been extended and totalled, but the nal result for the year has not been calculated. Rachids opening capital balance was $138,736, and his drawings during the year were $32,273. The totals of the income statement columns on his extended trial balance are: Debit $261,930 Credit $341,839

What is Rachids closing capital balance? A $26,554

B $106,463 C $186,372

D $218,645 37 Which of the following items should be included in the calculation of the net prot for a partnership? (i) interest on a loan from a partner (ii) salaries for employees (iii) salaries for partners A (i) and (ii) only
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B (ii) and (iii) only C D (i) and (iii) only (i), (ii) and (iii)

38 Paulo and Claude are in partnership sharing prots and losses in the ratio 2:3. In the year to 31 March 2010 the partnership prot was $144,890 and the partners withdrew $35,000 each. Interest is charged at 8% on all drawings. Interest on capital for the year was Paulo $11,450 Claude $9,770 What is Paulos share of the residual prot? A $47,228

B $51,708 C D $64,204 $77,562

39 In the year to 28 February 2010, Simone paid $378,942 into her bank account. This included $40,000 of new capital and was after drawings of $26,500 had been made in cash. The balance represented cash received from customers. How much cash did Simone receive from customers? A $312,442 B $365,442 C $392,442 D $445,442 40 Bill obtains a 25% margin on all his sales. In the year to 31 March 2010 he bought goods with a total value of $69,000. His closing inventory cost $3,000 less than his opening inventory. What is the value of Bills sales in the year to 31 March 2010? A $82,500

B $88,000 C D 41 $90,000 $96,000 Estelle has prepared the following journal entry:

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Debit

Cash Credit

$500 T Simpkins $500

What is the correct narrative for the journal entry? A Cash sale to T Simpkins

B Cash purchase from T Simpkins C D 42 Cash paid to T Simpkins Cash received from T Simpkins

On checking his ledger entries, Ade found the following errors: (i) an invoice from a supplier has not been recorded; and

(ii) the debit entry of $500 for repairs has been correctly recorded, but the credit entry was recorded as $50. Which of the above errors would cause a difference between the total of the debit balances and the total of the credit balances when the trial balance is extracted? A (i) only

B (ii) only C D 43 both (i) and (ii) neither (i) nor (ii)

Which of the following statements describes the qualitative characteristic relevance? A information which is free from material error

B information which is unbiased C D information which inuences the decisions of a user information which can easily be understood

44 In the year to 30 November 2009, Lui accounted for $7,000 of expenditure on machinery repairs as the cost of a new machine. Lui depreciates machinery on a straight-line basis over 10 years and charges depreciation for a full year in the year an asset is acquired. What is the effect of the error on Luis prot for the year to 30 November 2009? A understated by $6,300

B understated by $7,700 C D overstated by $6,300 overstated by $7,700

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45 In the nancial year ended 31 October 2009, Edita sold a car for $5,600. The car had been bought in January 2006 for $14,000. Edita depreciates motor vehicles on the reducing balance basis at a rate of 25% per annum. She charges a full years depreciation in the year an asset is bought, and no depreciation in the year it is sold. What is the prot or loss on disposal of the car (to the nearest $1)? A $306 loss B $306 prot C $2,100 loss D $2,100 prot 46 When completing the extended trial balance, in which column should the balance for receivables allowance be included? A income statement debit B income statement credit C statement of nancial position debit D statement of nancial position credit 47 Eva opened a suspense account with a debit balance of $99. She then discovered that: when recording a cash sale for $9 only the credit entry was made; and the balance on the sales account was under-cast by $90.

When these errors are corrected, what is the debit balance on the suspense account? A nil

B $18 C D $180 $198

48 When completing the reconciliation between the balance on the receivables control account in the general ledger and the total of the list of balances from the personal ledger, Emir discovered that a credit note for $47 issued to a customer had been entered in the customers personal account as an invoice. How will the total value of the list of balances change when the error is corrected? A increase by $47
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B increase by $94 C D reduce by $47 reduce by $94

49 Gilda is preparing her bank reconciliation statement. Following the necessary correcting entries, the balance on the bank account in her general ledger is $4,782 credit. She still has to deal with the following: (i) her bank charged fees of $365 to her account in error; (ii) she has outstanding cheques totalling $1,745; and (iii) she has an outstanding lodgement of $1,519. What is the overdraft balance on her bank statement? A $4,191

B $4,556 C D $4,643 $4,921

50 On checking his draft nancial statements, Ricardo noted that he had omitted an accrual for $754 and a prepayment for $388. By how much is the value of his current assets understated? A $388

B $366 C D $754 $1,142

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