BA3 Sample Questions Answers

Accountant P debited wages with £1,000 instead of £1,500, but credited sales with £1,500 instead of £2,000.

Which of the following kind of bookkeeping mistakes is this?

Your organization paid $120250 in net wages to its employees during the year.

Employees' tax and national insurance amounted to $32000 and employers national insurance was $11000. Employees had contributed $6250 to a superannuation scheme.

The amount to be charged against profits for the year, in respect of wages is

Which of the following would be a role of the management accountant?

The IASB's Framework for the Preparation and Presentation of Financial Statements identifies four possible measurement bases for use in financial statements

Which of the following are those bases?

One of the main responsibilities of internal auditors is to check the operational systems within their organization to establish whether the system's internal controls are sufficient and in full operation.

Which THREE of the following are examples of internal controls?

CDE, an entity registered for sales tax, purchases a piece of equipment for cash on 31 December 20X6 for $30,000 including sales tax. The sales tax rate is 20%. What is the journal entry required to record this transaction in the nominal ledger?

Place the labels in the corresponding position in the table below:

Refer to the Exhibit.

A company operates an AVCO system of inventory. Opening inventory at the beginning of the period was 400 units @ $6.50 per unit.

During the period, the following purchases and issues were recorded:

The amount charged to the company's income statement in the period is

Which of the following financial documents contains the manufacturing account?

A company has authorized capital of 100,000 5% preference shares of $2 each and 500,000 ordinary shares of $0.20p each. All of the preference shares have been issued, and 400,000 ordinary shares have been issued at $0.45p each.

Interim dividends of $0.10p per ordinary share, plus half the preference dividend have been paid during the current year. A final dividend of $0.20p per ordinary share is declared.

The total of dividends payable for the year is

Which of the following transactions affects profit but does not affect cash?

In internal auditing, detection of fraud is an important objective. The auditors will best be able to detect frauds if they are knowledgeable in the most common methods of fraud.

Which THREE of the following are common methods of fraud?

AB wrote off a $500 debt owed by CD last year During the current year CD has paid the $500 in full AB has debited the bank account with S500.

Where would the credit entry for this receipt be recorded?

The sales ledger control account shows a balance of £236,725, whilst the individual customer balances total £231,472.

One possible explanation for the difference between the two may bE.

A trial balance should be extracted from the ledger accounts prior to preparing the final accounts because:

Refer to the Exhibit.

The following information relates to a business at its year end:

The prime cost of goods manufactured during the year is:

MM does not maintain complete accounting records. The following information is available for the year ended 31 December 20X3:

The mark up on items sold by MM is 20%.

Which THREE of the following statements are true?

Entity V has a cost of sales of £23,850 for last year. Entity V's opening inventories for the year were £15,800, and its closing inventories were £3,570. Entity V had a gross profit margin of 240% for last year.

What was Entity V's inventories turnover figure to the nearest whole number for last year?

Refer to the Exhibit.

A company operates a FIFO system of inventory valuation. Opening inventory at the beginning of the period was 200 units @ £2.80 each. During the period the following movements of inventory were recorded.

The value of the closing inventory at the end of the period and amount charged to the income statement were:

Which of the following are likely examples of accrued expenses:

Office equipment store Officework Ltd has made the following purchase from supplier GX:

50 printers costing £3,500 £6,400

worth ofA4 paper £101,500

worth of general stationary

This purchase has been made on credit. Which TWO of the following show how the transaction should be recorded in Officework Ltd's documents?

Which of the following transactions would be classified as a capital transaction?

In which section of the statement of cash flow would cash from share issues be included? Select one of the following

Statement of cash How for the year ended.......

Refer to the Exhibit.

The following information is available relating to the non-current assets of Company X:

Non-current assets that had originally cost $225,000 and had a carrying value of $105,000 were sold during the year.

The figure for purchases of non-current assets to be shown in the statement of cash flows will be, to the nearest $1,000:

Which one of the following would not be considered a purpose of segregation of duty?

JW's debits total £10,502 for this period. JW's credits total £8,940.

What amount does JW's accountant need to include in the company's suspense account to make the transactions balance?

Refer to the exhibit.

A company has the following equity balances at the beginning of the year

During the year the company made a rights issue of 1 for 5 at a price of $1.50

The balance of share premium after this issue is

Which one of the following best describes the stewardship function?

If the royalty cost falls on items used in the manufacturing process, which TWO of the following would be true?

Refer to the exhibit.

ABC has the equity balances at the end of year 1.

During year 2 ABC issues 100,000 new shares at a price of $1.10

What is the balance on share premium at the end of year 2?

Refer to the exhibit.

A company has the following current assets and liabilities at its most recent year end:

When measured against standard acceptable levels for liquidity, the company can be said to have:

DE has the following incomplete non-current register extract at 301 at December 20X7:

What is the useful economic life (UEL) (in years) of this asset which should be entered into the non-current asset register?

An organization’s cash book has an opening balance in the bank column of $4,850 credit.

The following transactions then took place:

(a) Cash sales of $14,500, including VAT of $1,500.

(b) Receipts from customers of debts of $24,000.

(c) Payments to creditors of debts of $18,000, less 5% cash discount.

(d) Dishonored cheques from customers amounting to $2,500.

The resulting balance in the bank column of the cash book should be:

Which of the following would result in an increase in the cash balance for the period?

(a) A reduction in inventory

(b) A reduction in receivables

(c) A reduction in payables

(d) A gain on disposal of non-current assets

An extract from PQ's statement of profit or loss for the year ended 31 March 20X6 is shown below:

What is the mark-up percentage that PQ applies in arriving at its selling price? Give your answer to one decimal place

Refer to the exhibit.

Harvey commenced business with capital of $50,000. At the end of the first financial year, he has

What was the profit for the period?

The valuation of inventory in a manufacturing company will consist of:

External auditors report their opinion to the members of the company after their independent examination of the financial statements.

Which THREE of the following should be included in their opinion?

Before lending to an entity, which TWO of the following pieces of information would a potential lender want to consider?

In the year ended 31 December 20X1, XYZ receives an email confirming that a major customer has gone into liquidation and will be unable to pay its suppliers.

Which of the following is the impact of adjusting for this event?

If closing inventory at the end of an accounting period is overvalued by £2000 and no adjustment is made, the net profit in the following accounting period will be:

An organization restores its petty cash balance to £350 at the end of each month.

During October, the total expenditure column in the petty cash book was calculated as being £310, and hence the impress was restored by this amount. The analysis columns, which had been posted to the nominal ledger, totaled only £300.

This error would result in:

Refer to the Exhibit.

A business which is not VAT registered, purchased stationery items on credit costing £500 excluding VAT. The rate of VAT on the goods was 17.5%.

What are the correct ledger entries?

The answer is:

It underpins all accounting standards and provides the platform from which all future standards will be developed.

Which ONE of the following is described above?

The Accounting Standards Board is responsible for:

Which THREE of the following would be recorded as a debit balance in the trial balance?

Refer to the Exhibit.

Accounting information is required for a wide range of users both internal and external. Each user has a different need for the information.

Which of the following is the correct combination of user and need?

Which one of the following does not apply when the historical cost convention is being followed?

Cost of goods sold for a manufacturing company is the total of

AB commenced trading on 1 January 20XS. introducing $50,000 cash and $15,000 of assets to the business. The profit earned and retained in the business for the year ended 31 December 20X6 was $160,000. AB's closing capital at 31 December 20X5 was $190,000.

What is the value of AB's drawings for the year ending 31 December 20X5?

Which THREE of the following internal controls are procedures to help detect errors?

A business has expanded rapidly during the current year. As a result the accounting records have been building up and the management accountant is having problems producing reports for each department head.

Which of the following would be the best solution if introduced?

A company which is VAT registered, has sales for the period of $28,450 (excluding VAT) and purchases (including VAT) for the period of $14,687.50.

The balance on the VAT account, assuming all items are subject to VAT at 17.5%, is:

Refer to the exhibit.

In a statement of cash flows, which three of the following would be found under the section "cash flows from investing activities"?

Refer to the Exhibit.

Which of the following items should be included in the valuation of inventory in a manufacturing company?

Refer to the exhibit.

The following extracts from the statement of financial position and income statement for Company S are available:

Included in operating profit was depreciation of $120,000 and a loss on disposal of non-current assets of $48,000.

The cash generated from operations for year 2 would be: