Accounting Pq

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    ACCOUNTING Practice Questions for gcma

    january 2016

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    Practice Questions Accounting

    Question- 1

    The following information was disclosed in the financial statements of Highfield Co for the year

    ended 31/12/2015.

     2014 2015 $ $

    Plant & Equipment cost 255,000 235,000

    Accumulated depreciation (100,000) (110,000)

    During 2015, the following occurred in respect of Plant & Equipment:

    $

    Purchases of P&E 10,000

    Depreciation charged on P&E 25,000

    Loss on disposal of P&E 8,000

    What were the sales proceeds received on disposal of the P&E?

    A $7,000

    B $15,000

    C $25,000

    D $8,000 

    Question- 2

    The debit side of a trial balance totals $400 more than the credit side. Which one of the following

    errors would fully account for the difference?

    A $200 paid for building repairs has been correctly entered in the cashbook and credited to the

    building non-current asset account

    B Discount received $200 has been debited to the discount allowed account

    C A receipt of $400 for commission receivable has been omitted from the records

    D A payment of $400 to suppliers has been omitted from the records

    Question- 3

    Under IAS 1, which of the following must be disclosed on the face of the statement of

    comprehensive income?

    A Profit before tax

    B Gross profit

    C Revenue

    D Dividends

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    Accounting Practice Questions

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    Question-4

    Rory and Tony have traded as partners for a number of years. Their statement of financial position

    as at 30 June 2015 shows:

    $ $ Capital accounts

    Rory 45,000

    Tony 37,000

    82,000

    Current accounts

    Rory 19,214

    Tony 8,632

    27,846

    109,846

    During the year the business made a profit of $41,320, the partners took drawings of $12,000 each

    and non-current assets were revalued upwards by $25,000.

    What was the net asset total as at 1 July 2014?

    A $67,526

    B $92,526

    C $127,166

    D $152,166

    Question-5

    The following bank reconciliation has been prepared:

    $

    Balance per bank statement (overdrawn) 73,680

    Add: Outstanding lodgements 102,480

    Less: Outstanding cheques (87,240)

    Balance per cash book (credit) 88,920

    Assuming the amounts stated for items other than the cash book balance are correct, what should

    the cash book balance be?

    A $88,920 credit (as stated)

    B $120,040 credit

    C $58,440 debit

    D $58,440 credit

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    Accounting Practice Questions

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    Question-6

    In relation to statements of cash flows, which, if any, of the following are correct?

    1 The direct method of calculating net cash from operating activities leads to a different figure

    from that produced by the indirect method, but this is balanced elsewhere in the statement

    of cash flows

    2 A company making high profits must necessarily have a net cash inflow from operating

    activities.

    3 Profits and losses on disposals of non-current assets appear as items under cash flows from

    investing activities in the statement of cash flows or a note to it.

    A Item 1 only

    B Items 2 and 3

    C None of the items

    D All available options

    Question-7

    Panther owns her own business selling Gladiator dolls to department stores. At 30 June 2015 she

    had the following balances in her books:

    $

    Trade receivables 31,450

    Allowance for receivables (General) (as at 1 July

    2014)

    (450)

    31,000

    A balance of $1,000 due from Selfrodges Co is considered irrecoverable and is to be written off.

    Horrids Co was in financial difficulty and Panther wished to provide for 60% of their balance of

    $800. She also decided to make a general provision of 10% on her remaining trade receivables.

    What was the allowance for receivables in her statement of financial position at 30 June 2015?

    A $3,477

    B $3,765

    C $3,445

    D $3,545

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    Question-8

    Curtis and Sillett are in partnership, sharing profits in the ratio 3:2 and compiling their accounts to

    30 June each year.

    On 1 January 2015, Mcallister joined the partnership, and from that the date the profit sharing ratio

    became Curtis 50%, Sillett 25% and Mcallister 25%, after providing for salaries for Sillet and

    Mcallister of $20,000 and $12,000 pa respectively.

    The partnership profit for the year ended 30 June 2015 was $480,000, accruing evenly over the

    year.

    What are the partners' total profit shares for the year ended June 2015?

    Curtis Sillet Mcallister

    A 256,000 162,000 62,000

    B 248,000 168,000 64,000

    C 264,000 166,000 66,000

    D 264,000 156,000 60,000

    Question-9

    Which of the following items could appear on the credit side of a sales ledger control account?

    1 cash received from customers

    2 irrecoverable debts written off

    3 increase in the allowance for receivables

    4 discounts allowed

    5 sales

    6 credits for goods returned by customers

    7 cash refunds to customers

    A 1, 2, 4, and 6

    B 1, 2, 4 and 7

    C 3, 4, 5 and 6

    D 1, 2, 3 and 4

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    Question-10

    A business has compiled the following information for the year ended 31 October 2015:

    $

    Opening inventories 386,200

    Purchases 989,000

    Closing inventories 422,700

    The gross profit percentage of sales is 40%

    What is the sales revenue for the year?

    A $1,333,500

    B $1,587,500

    C $2,381,250

    D The sales revenue is impossible to calculate from this information.

    Question-11

    On 30 September 2014 part of the inventory of a company was completely destroyed by fire.

    The following information is available:

    – Inventory at 1 September 2014 at cost $49,800

    – Purchases for September 2014 $88,600

    – Sales for September 2014 $130,000

    – Inventory at 30 September 2014 – undamaged items $32,000

    – Standard gross profit percentage of sales 30%

    Based on this information, what is the cost of the inventory destroyed? A $17,800

    B $47,400

    C $15,400

    D $6,400

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    Question-12

    Catt sells goods at a margin of 50%. During the year to 31 March 2015 the business made

    purchases totalling $134,025 and sales totalling $240,000. Inventories in hand at 31 March 2015,

    valued at cost, was $11,385 higher than the corresponding figure at 1 April 2014.

    What was the cost of the goods Catt had drawn out?

    A $2,640

    B $14,590

    C $25,410

    D $37,360

    Question-13 At 1 July 2014 the share capital and share premium account of a company were as follows:

    $

    Share capital – 300,000 ordinary shares of 25c each 75,000

    Share premium account 200,000

    During the year ended 30 June 2015 the following events took place:

    1 On 1 January 2015 the company made a rights issue of one share for every five held, at

    $1.20 per share.

    2 On 1 April 2015 the company made a bonus (capitalisation) issue of one share for every

    three in issue at that time, using the share premium account to do so.

    What are the correct balances on the company's share capital and share premium accounts at 30

    June 2015?

    Share capital Share premium account

    A $460,000 $287,000

    B $480,000 $137,000

    C $120,000 $137,000

    D $120,000 $227,000

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    Question-14

    A statement of cash flows prepared in accordance with IAS 7 Statements of cash flows opens with

    the calculation of cash flows from operating activities from the net profit before taxation.

    Which of the following lists of items consists only of items that would be ADDED to net profit

    before taxation in that calculation?

    A Decrease in inventories, depreciation, profit on sale of non-current assets.

    B Increase in trade payables, decrease in trade receivables, profit on sale of non-current assets.

    C Loss on sale of non-current assets, depreciation, increase in trade receivables.

    D Decrease in trade receivables, increase in trade payables, loss on sale of non-current assets.

    Question-15

    The issued share capital of Maelstrom Co is as follows:

    Ordinary shares of 10c each $1,000,000

    8% Preferred shares of 50c each $500,000

    In the year ended 31 October 2015, the company has paid the preferred dividend for the year and

    an interim dividend of 2c per share on the ordinary shares. A final ordinary dividend of 3c per share

    is declared o