Mirchawala’s Hub of Accountancy:

FA2:Mock Exam 2
Question#1:
Kieron is an antiques dealer. His inventory includes a clock which cost $15,800.
Kieron expects to spend $700 on repairing the clock which will mean that he will be able to sell it for
$26,000.
At what value should the clock be included in Kieron’s inventory?
A. $26,000
B. $16,500
C. $15,800
D. $25,300
Question#2:
Which two of the following statements about the purpose of suspense account are true?
A. It is used in the final accounts to make the statement of financial position balance
B. It is used when the total debits and total credits in the trial balance are not equal
C. It is used to keep a record of journal entries made to correct errors of complete omission
D. It is used as a temporary account when the bookkeeper does not know immediately where to post
an amount
Question#3:
At 31 May 20X1 the balance on Caleb’s bank statement showed that he had $3,732 in the bank. When
he carried out the reconciliation between the bank statement and the bank account in his general ledger
he found the following:
(1) Un presented cheques $5,729
(2) Outstanding lodgments $822
(3) Bank charges $495
What overdraft balance should be reported in Caleb’s statement of financial position at 31 May 20X1?
$
Question#4:
Kris has correctly completed the reconciliation between the balance on the payables control account in
his general ledger and the list of balances from the payables ledger.
Is each of the following statement true or false? True False
1. The reconciliation provides confirmation that the balance on the payables
control account is correctly stated
2. The reconciliation confirms that the balance on each supplier’s account is correct
Question#5:
At 1 May 20X8 Trevor’s receivables allowance was $1,468 At 30 April 20X9 the total balance on his
receivables ledger was $88,463. This includes a balance of $563 which is irrecoverable. Trevor estimates
that his receivables allowance at 30 April 20X9 should be equivalent to 2% of the remaining balances.
How should the movement in the receivables allowance be reported in the statement of profit or
loss?
A. A charge of $290
B. A credit of $290
C. A charge of $1,758
D. A credit of $1,758
Question#6:
Which of the following correctly explain(s) why a trial balance is prepared?
(1) To summaries the balances prior to preparation of final accounts
(2) To provide a basic check on the accuracy of bookkeeping entries

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A. Neither 1 nor 2
B. 1 only
C. Both 1 and 2
D. 2 only
Question#7:
Accounting information should be free from materials error and should be neutral.
Which of the qualitative characteristics of accounting information does this describe?
A. Comparability
B. Faithful representation
C. Understandability
D. Relevance
Question#8:
At 31 October 20X3 Laila had a bank overdraft of $3.681 and a bank loan of $16,800. The bank loan is
due to be repaid by three payments of $5,600 on 1 April 20X4, 1 April 20X5 and 1 April 20X6.
Which TWO of the following show how these amounts should be reported in Laila’s statement of
financial position at 31 October 20X3?
A. Current liabilities $9,281
B. Non-current liabilities $11,200
C. Non-current liabilities $16,800
D. Current liabilities $3,681
Question#9:
A trainee accountant is employed by a partnership and has prepared the following current account for a
partner.
$ $
Interest on capital 560 balance b/f 54
Salary 300 drawings 1,240
Balance c/f 2,174 net profit 1,740
3,034 3,034

The balance brought forward is entered correctly and the other entries are all correct in the amount.
However the trainee accountant thinks she might have mixed up some of the debits and credits.
What is balance carried forward on the account after the errors have been corrected?
$

Question#10:
Kiera knows that her accounting records contain some errors.
Will each of these errors lead to the total of the debit balances being greater than the total of the
credit balances in Kiera’s trial balance?
Yes No
1. The entry for depreciation was made correctly in the accumulated depreciation
account, and was entered on the wrong side of the depreciation expense account.
2. A cash sale for $430 was recorded correctly in the cash account, but was entered
on the correct side of the sales account as $340

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Question#11:
Below is Rekha’s purchases day book for 13 April 20X1:
Date Supplier Total ($) Purchases ($) Expenses ($)
13 April 20X1 R Haslam 550 550
NP Golding 250 250
RG Power 725 725
1,525 800 725
How is the total of Rekha’s purchases day book posted to her ledger accounts?
A. Dr Purchases $800 Dr Electricity $725 Cr Payables control $1,525
B. Dr Payables control $1,525 Cr Purchases $1,525
C. Dr Purchases $800 Dr Electricity $725 Cr Cash $1,525
D. Dr Cash $1,525 Cr Purchases $800 Cr Electricity $725
Question#12:
Which of the following correctly calculates closing capital?
A. Capital introduced + Drawings – Profit + Opening capital
B. Capital introduced – Drawings + Profit + Opening capital
C. Capital introduced -Drawings – profit – Opening capital
D. Capital introduced + Drawings + Profit + Opening Capital
Question#13:
Wilson has returned goods that he bought on credit.
Which TWO of the following form the journal entry that Wilson should record in his general ledger?
A. Cr Trade payables
B. Cr Purchase returns
C. Dr Trade payables
D. Dr Purchase returns
Question#14:
At 1 May 20X0 Lim owed his suppliers $17,822. At 30 April 20X1 he owed $16,385. During the year to
30th April 20X1 he paid his suppliers $131,740, and made a contra entry with the receivables ledger of
$800.
What was the value of his purchases for the year to 30 April 20X1?
$
Question#15:
Would each of the following errors cause a difference between the total of the debit balances and the
total of the credit balances when the trial balance is extracted? Yes No
1. The debit entry of $500 for repairs has been correctly recorded, but the credit entry
was recorded as $50
2. An invoice from a supplier has not been recorded
Question#16:
When a trial balance is being extracted where should the balances for accumulated depreciation be
entered?
A. Statement of financial position credit and statement of profit or loss debit
B. Statement of financial position debit and statement of profit and loss credit
C. Statement of financial position credit only
D. Statement of financial position debit only

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Question#17:
When completing the extended trial balance, in which column should the balance for receivables
allowance be included?
A. Statement of profit or loss credit
B. Statement of financial position credit
C. Statement of financial position debit
D. Statement of profit or loss credit
Question#18:
Jane is preparing her bank reconciliation. The bank balance in her general ledger is $422 credit. The only
items which need to be dealt with are:
(1) A cheque for $822 issued to a supplier which has not yet appeared on the bank statement
(2) Interest received of $153 which was credited by the bank, but not recorded by Jane
What is the closing balance on Jane’s bank statement?
A. $269 overdrawn
B. $1,091 overdrawn
C. $553 cash at bank
D. $1,397 cash at bank
Question#19:
Candy started her own business during the year.
The following is a list of Candy’s capital injections. Which TWO of these would be included in the
capital section of her statement of financial position?
A. A $600 business loan from Candy’s bank
B. A van worth $350 bought by Candy for the business using her personal bank account
C. A $150 loan to the business from Candy’s friend Jim repayable in 2 months time
D. $400 cash paid into the business by Candy from her personal bank account
Question#20:
In the year to 31 October 20X0 Vlad’s 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 Vlad’s purchases in the year to 31 October 20X0?
$
Question#21:
Is each of the following statement about going concern correct?
Yes No
1. Financial statements must always be prepared on the going concern basis
2. If a business is not considered to be a going concern financial statements should not be prepared
Question#22:
Which book of prime entry is used to record settlement discounts received?
A. Purchases account
B. Cash book
C. Purchase day book
D. General ledger
Question#23:
Davindra is reconciling the total of balances from her receivables ledger to the balance on the trade
receivables control account. The total of balances is $25,627. She has discovered two errors:
(1) A customer account has been overcast by $99
(2) 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. $25,706

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B. $25,439
C. $25,350
D. $25,617
Question#24:
Emily’s drafts accounts report a profit of $11,855. However an accrual of $398 was treated as a
prepayment and a prepayment of $480 was incorrectly recorded as $522.
What is the correct profit?
A. $11,499
B. $12,693
C. $11,415
D. $11,017
Question#25:
At 31 May 20X3 Shelins’s was $1,157. She wishes to write off a balance of $178 as irrecoverable. At 31
May 20X2 her receivables allowance was $1,284.
What charge should be reported in Shelina’s statement of profit or loss for the year to 31 May 20X3
for receivables expense?
A. $1,335
B. $1,157
C. $305
D. $51
Question#26:
Nigel has closing inventory which cost $38,750. This includes some damaged items which cost $3,660. It
will cost Nigel $450 to repair these. He will be able to sell them for $1,500 after the repairs are
completed.
What is the correct value of Nigel’s closing inventory?
A. $36,590
B. $36,140
C. $38,750
D. $35,090
Question#27:
In the year to 28th February 20X0 Simone paid $378,942 into her bank account. This includes $40,000 of
new capital and was after Simone had taken cash drawings of $26,500. The balance represented cash
received from customers.
How much cash did Simone receive from customers?
$
Question#28:
Boris receives rental income of $1,200 each month. His tenant pays the rent relating to the month by
cheque on the last day of each month.
What debit and credit should Boris record for the payment received?
Rental income $1,200 Bank $1,200 Cash $1,200
Debit
Credit

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Question#29:
Paulo and Claude are in partnership sharing profits and losses in the ratio 2:3. In the year to 31 March
20X0 the partnership profit 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 as follows:
$
Paulo 11,450
Claude 9,770
What is Paulao’s share of the residual profit?
A. $77,562
B. $51,708
C. $47,228
D. $64,204
Question#30:
Gary bought a new machine. The invoice included costs for the following:
(1) Installation charges
(2) Routine maintenance for the first year of operation
(3) Testing the machine prior to operation
Which of the costs are capital expenditure?
A. 1 and 3 only
B. 1 and 2 only
C. 1,2 and 3
D. 2 and 3 only
Question#31:
In June 20X8 Laura bought goods for $12,000. She paid $11,000 of the amount due by cheque and
agreed a 45 day credit period for the balance. She has not made any further payments in the month of
June 20X8. She intends to buy more goods for $13,000 in July 20X8.
What amount should be reported for Laura’s payables at 30 June 20X8?
A. $25,000
B. $14,000
C. $1,000
D. $13,000
Question#32:
Which of the following would normally be recorded in a non-current asset register?
(1) The location of each asset
(2) The serial number of each asset
(3) Accumulated depreciation on each asset
A. 1,2 and 3
B. 1 only
C. 2 and 3 only
D. 1 and 3 only
Question#33:
In the year to 30 November 20X9. 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 Lui’s profit for the year to 30 November 20X9?
A. Overstated by $7,700
B. Understated by $6,300

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C. Understated by $7,700
D. Overstated by $6,300
Question#34:
Albert and Len are in partnership. The correct entry for the partner’s drawings has been made in the
cash account. A separate control account and current account is maintained for each partner.
What entry is needed to complete the posting for partner’s drawings?
A. A credit entry in the partners capital accounts
B. A debit entry in the partners capital accounts
C. A debit entry in the partners current accounts
D. A credit entry in the partners current accounts
Question#35:
Sabrina sold goods with a list price of $1,200 to Marcus. Marcus receives a trade discount of 10% and a
settlement discount of 5% for payment within 14 days. Marcus is expected to take advantage of the
settlement discount.
What amount should be recorded in revenue relating to this sales?
$

Question#36:
Richid’s extended trial balance has been extended and totalled, but the final result fot the year has not
been calculated.
Rachid’s opening capital balance was $138,736 and his drawings during the year were $32,273.
The totals for the statement of profit or loss columns on his extended trial balance are as follows:
Debit $261,960, Credit $341,839.
What is Rachid’s closing capital balance?
A. $218,615
B. $186,342
C. $106,463
D. $26,584
Question#37:
When completing the reconciliation between the total of the list of balances on her payables ledger and
the balance on the payables control account in her general ledger, Tracey found that no record has been
made in her accounting system of the following:
(1) A discount received $27
(2) An invoice received $622
The total of her list of balances $84,855.
Before any adjusting entries were made what was the balance on the payables control account in
Tracey’s general ledger?
A. $85,504
B. $85,450
C. $84,855
D. $84,206
Question#38:
The balance on Jane’s payables ledger control account is $31,554. Jane has discovered that she has not
recorded:
(1) A settlement discount of $53 received from a supplier
(2) A suppliers invoice for $622
What amount should be reported for payables on Jane’s statement of financial position?
$

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Question#39:
Maryam and Ariel have been in partnership together for a number of years and share profits and losses
in the ratio 5:4.
At 1 March 20X9 Jana was admitted to the partnership when the goodwill was valued at $75,000. The
partners decided that goodwill would not be maintained in the accounts and drew up a new partnership
agreement stating that profits would now be shared in the ratio 1:1:1.
How much must Jana contribute to the partnership to ensure that her opening capital balance is nil?
$
Question#40:
Andrew’s trial balance at 31 October 20X7 includes the following:
$
Machinery at cost 85,800
Accumulated depreciation on machinery 21,750
Trade receivables 42,650
Receivables allowance 1,570
Bank overdraft 6,470
Inventory at 1 November 20X6 21,650
His inventory at 31 October 20X7 is valued at $22,300.
What value should be reported for current assets in Andrew’s statement of financial position at 31
October 20X7 $______?
Question#41:
At 30 November 20X5 Jenny had a bank loan of $8,500 and a balance of $678 in hand in her bank
account.
How should these amounts be recorded on Jenny’s opening trial balance at 1 December 20X5?
A. Credit $7,822
B. Debit $8,500 and credit $678
C. Debit $7,822
D. Credit $8,500 and Debit $678
Question#42:
Joyce’s trial balance has been completed and extended. The totals of the statement of profit or loss
columns and the statement of financial position columns are shown below:
Statement of profit or loss statement of financial position
Dr ($) Cr ($) Dr ($) Cr ($)
100,478 110,536 120,621 110,563
What is Joyce profit or loss?
A. A profit of $10,085
B. A profit of $10,058
C. A loss of $10,085
D. A loss of $10,058
Question#43:
Sanjay is a sales tax registered trader. He has recently received an invoice for goods for resale which
costs $360 including sales tax. The rate of sales tax is 20%
At what amount should Sanjay record the purchase in his purchases account?
$
Question#44:
In the year to 31 May 20X9 Ina’s sales were $174,820, and her cost of sales was $139,856. The value of
her opening inventory was $11,844 and the value of her closing inventory was $13,328.
What was the value of her purchases $______?

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Question#45:
What is the main purpose of a statement of financial position?
A. To report the growth in the value of capital since the business was established
B. To provide information about the activities of the business over a period of time
C. To provide a valuation of the business at a particular date
D. To report the assets, liabilities and capital of the business at a particular date
Question#46:
On checking his draft financial statement Ricardo notes that he had omitted an accrual for $754 and a
prepayment for $388.
By how much is the value of his current assets understated?
$
Question#47:
Ed’s year end is 30 September. He depreciates office furniture at 15% per annum on the straight line
basis. A full years depreciation is charged in the year an asset is purchased, and no depreciation is
charged in the year it is sold. In March 20X5 Ed bought office furniture for $80,000.
If he sells the office furniture for $39,000 in July 20X8 what will Ed’s profit or loss be on disposal?
A. A profit of $7,000
B. A loss of $7,000
C. A profit of $5,000
D. A loss of $5,000
Question#48:
On 10 May Amanda bought goods for resale. Her supplier allowed her a credit period of 30 days. To date
the goods have not been sold.
How is Amanda’s accounting equation affected by the transaction?
A. Assets: Unchanged Liabilities: Increased Capital: Reduced
B. Assets: Increased Liabilities: Increased Capital: Unchanged
C. Assets: Increased Liabilities: Unchanged Capital: Reduced
D. Assets: Reduced Liabilities: Reduced Capital: Unchanged
Question#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:
(1) Her bank charged fees of $365 to her account in error
(2) She has outstanding cheques totaling $1,745
(3) She has an outstanding ledgement of $1,519
What is the overdraft balance on her bank statement?
$
Question#50:
A sale invoice for $3,450 was recorded in Susan’s general ledger as shown below:
$
Debit sales 3,540
Credit Trade receivables 3,540
If the errors are not corrected before the final accounts are drafted how will Susan’s net profit be
affected?
A. Overstated by $6,990
B. Understated by $6,990
C. Overstated by $90
D. Understated by $90

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