BPP F3 Kitbj
BPP F3 Kitbj
BPP F3 Kitbj
10.15 Danya owns a small shop and the following information concerns the heat and light account for the year
to 31 March 2017:
Gas Electricity
At 31 March 2016 1,000 prepayment 500 accrual
At 31 March 2017 2,000 accrual 1,200 prepayment
During the year, Danya made payments of $5,000 for gas and $7,800 for electricity.
What is the total heat and light expense for the year ended 31 March 2017?
A $14,100
B $13,100
C $12,500
D $11,500 (2 marks)
(Total = 30 marks)
A
C
11 Receivables and payables 48 mins
C
11.1 Identify, by indicating the relevant box in the table below, whether each of the following statements is A
true or false.
Payables represent money the True False
business owes. G
L
Payables are an asset. True False
Receivables represent money True False
owed to the business.
O
(2 marks)
B
11.2 At 31 December 20X2 a company's receivables totalled $400,000 and an allowance for receivables of
$50,000 had been brought forward from the year ended 31 December 20X1.
A
It was decided to write off debts totalling $38,000. The allowance for receivables was to be adjusted to L
the equivalent of 10% of the receivables.
What charge for receivables expense should appear in the company's statement of profit or loss for the
year ended 31 December 20X2? B
A $74,200 O
B $51,800
C $28,000 X
D $24,200 (2 marks)
.
11.3 At 1 July 20X2 the receivables allowance of Q was $18,000.
C
During the year ended 30 June 20X3 debts totalling $14,600 were written off. The receivables
allowance required was to be $16,000 as at 30 June 20X3. O
What amount should appear in Q's statement of profit or loss for receivables expense for the year ended M
30 June 20X3?
A $12,600
B $16,600
C $48,600
D $30,600 (2 marks)
www.ACCAGlobalBox.com
51
Download FREE ACCA STUDY MATERIALs from "www.ACCAGlobalBox.com"
FFA/FA FINANCIAL ACCOUNTING
11.4 At 30 September 20X2 a company's allowance for receivables amounted to $38,000, which was
equivalent to five per cent of the receivables at that date.
At 30 September 20X3 receivables totalled $868,500. It was decided to write off $28,500 of debts as
irrecoverable. The allowance for receivables required was to be the equivalent of five per cent of
receivables.
What should be the charge in the statement of profit or loss for the year ended 30 September 20X3 for
receivables expense?
$_______ (2 marks)
11.5 At 1 July 20X3 a limited liability company had an allowance for receivables of $83,000.
During the year ended 30 June 20X4 debts totalling $146,000 were written off. At 30 June 20X4 a
receivables allowance of $218,000 was required.
What figure should appear in the company's statement of profit or loss for the year ended 30 June 20X4
for receivables expense?
A $155,000
B $364,000
C $281,000
D $11,000 (2 marks)
11.6 A company has received cash for a debt that was previously written off. Which of the following is the
correct double entry to record the cash received?
DEBIT CREDIT
A Irrecoverable debts expense Accounts receivable
B Cash Irrecoverable debts expense
C Allowance for receivables Accounts receivable
D Cash Allowance for receivables
(2 marks)
11.7 At 31 December 20X4 a company's trade receivables totalled $864,000 and the allowance for
receivables was $48,000.
It was decided that debts totalling $13,000 were to be written off. The allowance for receivables was to
be adjusted to the equivalent of five per cent of the receivables.
What figures should appear in the statement of financial position for trade receivables (after deducting
the allowance) and in the statement of profit or loss for receivables expense?
Statement of profit or loss Statement of financial position
$ $
A 8,200 807,800
B 7,550 808,450
C 18,450 808,450
D 55,550 808,450 (2 marks)
11.8 Which of the following would a decrease in the allowance for receivables result in?
A An increase in liabilities
B A decrease in working capital
C A decrease in net profit
D An increase in net profit (2 marks)
www.ACCAGlobalBox.com
52
QUESTIONS
11.9 A company has been notified that a customer has been declared bankrupt. The company had previously
made an allowance for this debt. Which of the following is the correct double entry to account for this
new information?
DEBIT CREDIT
A Irrecoverable debts Receivables
B Receivables Irrecoverable debts
C Allowance for receivables Receivables
D Receivables Allowance for receivables (2 marks)
11.10 An increase in an allowance for receivables of $8,000 has been treated as a reduction in the allowance
in the financial statements. Which of the following explains the resulting effects?
A Net profit is overstated by $16,000, receivables overstated by $8,000
B Net profit understated by $16,000, receivables understated by $16,000
C Net profit overstated by $16,000, receivables overstated by $16,000
D Gross profit overstated by $16,000, receivables overstated by $16,000 (2 marks) A
11.11 At 1 January 20X1, there was an allowance for receivables of $3,000. During the year, $1,000 of debts C
were written off as irrecoverable, and $800 of debts previously written off were recovered. At
31 December 20X1, it was decided to adjust the allowance for receivables to 5% of receivables which C
are $20,000. A
What figure should be included in the statement of profit or loss as the receivables expense for the year?
$__________ DEBIT / CREDIT (2 marks)
G
11.12 Top Co has total receivables outstanding of $280,000. The accountant believes that approximately 1%
of these balances will not be collected, so wishes to make an allowance of $28,000. No previous
L
allowance has been made for receivables. O
Which of the following is the correct double entry to create this allowance?
B
DEBIT CREDIT
A
A Irrecoverable debts Allowance for receivables
B Allowance for receivables Receivables L
C Irrecoverable debts Receivables
D Receivables Allowance for receivables (2 marks)
11.13 At the beginning of the year, the allowance for receivables was $850. At the year-end, the allowance
B
required was $1,000. During the year $500 of debts were written off, which includes $100 previously O
included in the allowance for receivables.
What is the charge to statement of profit or loss for receivables expense for the year?
X
A $1,500 .
B
C
$1,000
$650
C
D $550 (2 marks) O
11.14 Which TWO of the following statements are correct? M
A An aged receivables analysis shows how long invoices for each customer have been outstanding.
B A credit limit is a tool applied by the credit control department to make suppliers provide goods
on time.
C Receivables are included in the statement of financial position net of the receivables allowance.
D Credit limits are applied to customers who purchase goods using cash only. (2 marks)
www.ACCAGlobalBox.com
53
Download FREE ACCA STUDY MATERIALs from "www.ACCAGlobalBox.com"
FFA/FA FINANCIAL ACCOUNTING
11.15 At 31 May 20X7 Roberta's trial balance included the following items.
$
Inventory at 1 June 20X6 23,856
Trade receivables 55,742
Trade payables 32,165
Bank overdraft 5,855
Loan due for repayment in 20X9 15,000
What is the value of Roberta's current liabilities at 31 May 20X7?
A $38,020
B $53,020
C $61,597
D $76,597 (2 marks)
11.16 Which one of the following statements is NOT a benefit of offering credit facilities to customers?
A Improved convenience for the customer
B The separation of product and service delivery from payment
C Provides time for appropriate payment approval procedures
D Fewer irrecoverable debts (2 marks)
www.ACCAGlobalBox.com
54
QUESTIONS
11.20 A business commenced trading on 01 January 20X1. The following transactions with Supplier A have
been recorded in the purchase ledger.
01 January 20X1 Opening balance $nil
(1) 01 January 20X1 Purchase of goods $50
(2) 01 February 20X1 Purchase of goods $435
(3) 30 March 20X1 Payment $385
31 March 20X1 Closing balance $100
On 31 March 20X1, the business receives the following statement from the supplier.
Opening balance $nil
(4) 1 January 20X1 Invoice #365 $50
(5) 1 February 20X1 Invoice #490 $435
(6) 31 March 20X1 Invoice #533 $35
Closing balance $520
Which transactions should be noted as reconciling items on the supplier statement reconciliation at
31 March 20X1? A
A
B
3 only
6 only
C
C 3 and 6 only C
D 1 to 6 (2 marks)
A
(Total = 40 marks)
G
12 Provisions and contingencies 31 mins L
12.1 Identify, by indicating the relevant box in the table below, whether each of the following statements
O
about provisions and contingencies is true or false. B
A company should disclose
details of the change in
True False
A
carrying amount of a provision L
from the beginning to the end
of the year.
Contingent assets must be
recognised in the financial
True False
B
statements in accordance with
the prudence concept.
O
Contingent liabilities must be True False X
treated as actual liabilities and
provided for if it is probable .
that they will arise.
C
(2 marks)
O
M
www.ACCAGlobalBox.com
55