British Management College Mock Exa

PAPER: Financial Accounting (FA)

Full Marks 26×2=52

Pass Marks 26

Time allowed: 1 Hour

STUDENTS NAME:……………………………..
DATE:…………………………………………………
 1. Nonyong produced the following information concerning its expenses for the year ended 31 December 20X6.
Expense Balance at 1-Jan-20X6 ($) Cash paid ($) Statement of profit or loss ($)
Stationery 3,000 accrual 12,000 10,000
Rent payable 8,000 prepayment 29,000 35,000
Service agreements payable 500 accrual 14,000 13,000
Telephone 1,000 prepayment 8,500 11,000
Which two of the above will be included as liabilities in the statement of financial position at the year end?
a) Telephone
b) Rent payable
c) Stationery
d) Service agreements payable
Answer:

2. Denise has extracted the following balances whilst preparing her trial balance. Unfortunately she has forgotten to
include her drawing’s account.
Particular $
Cash at bank and in hand 40
Receivables 310
Capital 600
payables 250
Sales 1,800
Purchases 700
Wages 600
Insurance 300
Purchase returns 80
Sales return 20
What amount should be included for drawings in the trial balance?
760
$..........................

3. Are the following statements true or false?

The payables control account helps ensure that the total amount owed to suppliers is accurate
Particular True False
The purpose of payables control account is to provide check on accuracy of the payables figure True
The receivables control account shows the amount owed by each individual customer False

4. Gamma Co’s receivables control account at 30 June 20X9 is as follows:

Receivables control account
Particular $ Particular $
Balance brought forward 39,900 Cash receipts 61,600
Credit sales 55,500 Balance carried forward 33,800
95,400 95,400
What is the balance for receivables in the trial balance at 30 June 20X9?
a) $ 33,800 Cr b) $ 39,900 Cr. c) $ 33,800 Dr. d) $39,900 Dr.
Answer:
5. The following extracts is taken from Polly’s financial statements for the year ended 30 November 20X7:
Year ended 20X6 ($) 20X7 ($)
Trade receivables 150,000 140,000
Allowances for receivables 6,000 4,200
Which TWO of the following statements are correct for the year ended 30 November 20X7 in relation to the
information given above?
a) The allowances for receivables charged in the statements of profit or loss is a debit of $4,200
b) The allowances for receivables charged in the statements of profit or loss is a credit of $1,800
c) Net trade receivables reported in the statements of financial position are $135,800
d) Net trade receivables in the statements of financial position are $140,000

6. Jeff’s receivables control account at the year-end is shown below:

Particular $ Particular $
Balance b/f 25,650 Cash 36,860
Sales 43,890 Contra 1,500
Jeff has not yet recorded irrecoverable debts of $4,500 of which $2,000 had a specific allowances made for it at the
start of the year. His allowance for receivables at the year-end is $8,300.
What balance should be extracted from the receivables control account into the Jeff’s balance at the year end?
a) $24,680 b) $28,680 c) $26,680 d) $18,380
b)

7. On 30 September 20X4, Ravi has a balance on her receivables control account of $26,000 but the total of the
individual accounts in the receivables ledger came to $25,448. Upon investigation the following errors were
discovered.
 The sales day book was overcast by $120
 A credit balance of $84 on customer’s account in the receivables ledger had been incorrectly treated as a debit
balances
 A payables contra of $600 had been entered in the customer’s individual account but no other entry was made in
control account.
After accounting for the above errors, what is the correct amount on both the receivables ledger and the receivables
control account?
25,280
$..................

8. Bert offers a 2% settlement discount to his credit customer if payment is made within 20 days of purchase.
Additionally, a trade discount of 10% of standard selling price is given if more than 100 units are purchased in one
month. List price is $60 per unit. A customer buys 120 units in September and was expected to take advantage of
the settlement discount. The customer pays 15 days later.
What is the total discount that the customer will receive?
a) $ 141.60 b) $ 849.60 c) $ 144.00 d) $ 129.60
Answer:
Conditional trade discount is applicable in accounts
9. What transaction is represented by the following entries?
Dr. Allowances for receivables Cr. Receivables expense
a) The recovery of an irrecoverable debt c) The writing off an irrecoverable debt
b) An increase in the allowances for receivables d) A decrease in the allowances for receivables
Answer:

10. The following accounts have been completed and extracted from PicolloCo’s general ledger for the year ended 31
October 20X2:
Heat and light
Particular $ Particular $
Cash paid 6,250 Balance b/fwd 650
Balance c/fwd 150 Statement of profit or loss 5,750
6,400 6,400
Rental income
Particular $ Particular $
Statement of profit or loss 12,000 Balance b/fwd 3,000
Cash received 9,000
12,000 12,000
What amounts would be shown in the financial statements for the year ended 31 October 20X2 in respect of the
above ledger accounts?
a) Heat and light $5,750 Rental income $12,000 Accruals $3,150
b) Heat and light $5,750 Rental income $12,000 Accruals $150
c) Heat and light $6,250 Rental income $9,000 Accruals $150
d) Heat and light $6,400 Rental income $12,000 Accruals $150
11. Raj’s receivables ledger control account includes the following entries for November 20X5:
Particular $
Opening balance 62,100
Credit sales 142,500
Cash received 138,600
Discount allowed 2,450
Irrecoverable debts written off 1,460
Note: The discount was not expected to be taken advantage of by the customer when the invoice was first issued.
What is the receivables balance to be extracted into the trial balance at 30 November 20X5?
62090
Answer: $...............
12. Gordon purchases goods from Owen and also goods to Owen. Gordon has asked Owen to offset the balances on the
receivables ledger and payables ledger. Gordon’s records show receivables ledger and payables ledger balances are
$2,000 and $1,500 respectively.
What is the correct double entry for this transaction in Gordon’s records?
a) Dr. receivables ledger $1,500 cr. Payables ledger $1,500
b) Dr. payables ledger $1,500 cr. Receivables ledger $1,500
c) Dr. receivables ledger $2,000 cr. Payables ledger $2,000
d) Dr. payables ledger $2,000 cr. Receivables ledger $2,000
Answer:
13. The following accounts has been prepared.
Accounts receivable control account
Particular $ Particular $
B/f 376,700 Cash received from credit customer 183,200
Contra 10,000 Irrecoverable debts 3,500
Cash sales 52,000 Dishonored cheques 2,500
Credit sales 115,800 C/f 365,300
554,500 554,500
What would be the balance on the accounts receivables control account after any necessary corrections?
Answer: $………….
298300

14. The following figures relate to credit purchases and trade payables of a company during the year to 31 May 20X9:
Particular $
Opening payables 7,850
Closing payables 8,150
Cash paid to suppliers 235,275
Settlement discount received 8,250
Contra entries with sales ledger 7,560
Credit notes received from suppliers 2,250
What should be the credit purchases figure?
a) $253,635 b) $253,035 c) $238,515 d) $249,135

15. Wilma received a settlement discount of $30 from a credit supplier. The discount has been debited to the
discounts received account. How will the profit be affected as a result of this error?
A) Overstated by $60
B) Understated by $30
C) Overstated by $30
D) Understated by $60

Answer:

16. Malena is completing the reconciliation of her accounts receivable control account. At the end of the period the
balance on the control account is higher than the list of balances extracted from the individual receivable ledger
accounts. Which of the following could explain the reason for this difference?
a) A contra between accounts receivable and payable control accounts had been posted twice
b) The balance for irrecoverable debts had not yet been accounted for
c) An irrecoverable debt had been accounted for twice in the individual ledger account
d) An individual ledger account balance had been included twice

Answer:

17. A business began operations with $800 in the cash till. During the first year, all sales were cash sales and $42,000
was banked. Before making any banking’s, sundry expenses of $200 per month were paid from the cash till and
the owner also withdrew $400 per month from the cash till for living expenses. The cash in the till at the end of
the first year was $300. What is the cash sales figure for the first year of operations?
 Answer: $...................

18. Beryl has forgotten to record the decrease of $18,000 in her receivables allowance in her accounts for the year
ended 31 December 20X9. How will Beryl’s profit for the year and net assets at the year-end be affected by this?
a) Profit – overstated Net assets – overstated
b) Profit – overstated Net assets – understated
c) Profit – understated Net assets – understated
d) Profit – understated Net assets – overstated

Answer:

19. FNZ Co. writes off a debt of $4,500 as irrecoverable in January but in February received $2,000 relating
to this write off. What is the double entry to record the money they have received?
a) Dr. receivables ledger control account $ 2,000 Cr. Bank $2,000
b) Dr. bank $2000 Cr. Irrecoverable debt expense $2,000
c) Dr. bank $2000 Cr. Receivables ledger control account $2,000
d) Dr. irrecoverable debt expenses $2,000 Cr. Bank $2,000
Answer:
20. A company had a balance on its accounts payable control account of $ 817,000 at 30 November 20X8. This did not
agree with the total of the list of balances in the payable ledger, which totaled $813,600. Following an investigation,
the following errors were discovered.
 A contra with a supplier of $ 1400 was omitted from the payable ledger control account
 An invoice of $ 3800 was posted to the suppliers account as $ 1800.
What is the revised account payable control account total after correcting the errors above?

Answer: $.............

21. The following transaction relates to Ram’s electricity expenses ledger account for the year ended 30 June 20X9:
 Prepayment forward $ 550
 Cash paid $5,400
 Accrual carried forward $650
What amount should be charged to the statement of profit or loss in the year ended 30 June 20X9 for electricity?
a) $ 6,600 b). $ 5,400 c. $ 5,500 d. $ 5,300

Answer:

22. A paid her telephone bill for the quarter ended on 30 November 20X2. The bills are broken down as follows:
 Line rental for the period ending 28 February 20X3 $ 60.
 Calls made 1 September to 20 November 20X2 $150.
 A is now preparing her account and prepayments adjustments for the year ended 31 st December 20X2.

What will be the impact on profit for each of the adjustments required?
Particular Increase profit Reduce profit
Line rental adjustment
Calls adjustment
23. The following is the extract of Jim trial balance as at 31 st December 20X7:
Particular Dr. Cr.
Receivables $ 29,600
Allowances for Receivables $ 3,100
Irrecoverable debt $ 1,600
The following notes are provided.
 Additional irrecoverable debts of $3,000 were discovered at the year end.
 It has been decided to make an allowance for receivables of 10% on the adjusted receivables at the year end.
The total irrecoverable debt expenses (irrecoverable debts and allowances for receivables) for the year ended 31 st
December 20X7 and the closing net receivables balance as at 31 st December 20X7 will be:
Irrecoverable debts expenses Net receivables
A. $4,160 $23,940
B. $5,040 $23,940
C. $2,560 $21,830
D. $4,000 $19,800
Answer:

24. Erin is registered for sales tax. During May, she sells good with a tax exclusive price of $600 to Kyle on credit. As
Kyle is buying a large quantity of goods, Erin reduces the price by 5%. She also offers a discount of another 3% if
Kyle pays within 10 days. Kyle does not pay within the 10 days. If the sales tax is charged at 17.5%, what amount
should Erin charge on this transaction? (Calculate to the nearest $)
Answer: $.....................

25. KIMI is reconciling her payable account to the list of individual payable balances in her payable ledger but they do
not agree. Which two of the following errors could account for the difference between payables ledger and the
list of individual balances?
a) An invoice of $6,568 has been recorded on the credit side of individual payable balance of Smith and company.
b) A supplier account of $ 2,129 has been omitted from the list of individual balances.
c) An invoice of $723 has been recorded in the payable control account as $ 273.
d) An invoice of $230 was omitted from the payable day book.
Answer:
26. At 31 December 20x0, Raheem’s list of individual sales ledger balances totaled $230,450 and account
receivables ledger control account balance was $229,730. Two errors were then identified. Where would
each of the following errors require an adjustment?
Particular In the receivables In the individual In both
ledger control sales ledger balances
account only only
Cash received of $360 had been debited to a
customer’s individual account and treated correctly in
the general ledger
A customer’s cheque for $766 had been returned by
the bank and no entries had been made to reflect this