Fi32rk14 LR

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Q 1.7
Q 1.8
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A list of ledger balances shown in debit and credit columns

A list of all the assets owned and all the liabilities owed by a business
A record of income generated and expenditure incurred over a given period
A record of the amount of cash generated and used by a company in a given period
A
B
C
D
(2 marks)
Which ONE of the following statements correctly describes the contents of the Statement of Financial Position?
New Question.
Deleted
1.8
ERRATA
A supplier of goods on credit is interested only in the statement of financial position, ie an indication of the
current state of affairs.
D Providing reliable investment advice
Time Allocation changed from 34 to 39 minutes
Details of changes
We regret if these changes have caused any inconvenience.
We set out below the location and details of each change.
Please note that the FIA FFA F3 Practice & Revision Kit was updated in August 2014 and re-printed. Some questions have
therefore been updated or changed (third edition, dated 2013)
Errata sheet: November 2014
Practice & Revision Kit Pack (third edition, November 2013)
FIA FFA F3 Financial Accounting
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Q 1.15
Q 1.14
Q 1.13
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Q 1.10
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Q 1.9
Former Q 1.12
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ERRATA // FIA FFA F3 Financial Accounting
1 only
2 only
1 and 2
Both are incorrect
A
B
C
D
Companies should create provisions in times of company growth to be utilised in more difficult times, to
smooth profits.
A list of all the assets owned and all the liabilities owed by a business
A record of income generated and expenditure incurred over a given period
A record of the amount of cash generated and used by a company in a given period
B
C
D
Promote the use and rigorous application of International Financial Reporting Standards (IFRSs)
Ensure International Financial Reporting Standards (IFRSs) focus primarily on the needs of global, multinational organisations
Bring about the convergence of national accounting standards and IFRSs
B
C
D
(2 marks)
Through the IASB, develop a single set of globally accepted International Financial Reporting Standards
(IFRSs)
(2 marks)
1.15 Which ONE of the following is NOT an objective of the IFRS Foundation?
New Question Formerly Q 1.16
Formerly 1.15
Formerly 1.14
Formerly 1.13
Deleted
A list of ledger balances shown in debit and credit columns
1.10 Which ONE of the following statements correctly describes the contents of the Statement of Profit or Loss?
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Q 2.8
Q 2.7
Q 2.6
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Q 1.16
Question/Answer
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ERRATA
To facilitate the enforcement of a single set of global financial reporting standards

To prevent national bodies from developing their own financial reporting standards
C
D
Accuracy
2.7
The presentation and classification of items in the financial statements should stay the same from one
period to the next.
Financial statements are required to present fairly, in all material respects, the financial results of the
entity
(2 marks)
Financial statements always treat the business as a separate entity.
Whenever legally possible, the commercial effect of a transaction should be reflected in the financial
statements.
Revenue earned must be matched against the expenditure incurred in earning it.
Which ONE of the following statements describes the substance over form concept?
Which of these are qualitative characteristics of financial information according to the IASB's Conceptual Framework
for Financial Reporting?
Consistency
Total marks changed from 34 to 32
To ensure high ethical standards are maintained by financial reporting professionals internationally
(2 marks)
To provide examples of best financial reporting practice for national bodies who develop their own
requirements
1.16 Which ONE of the following statements correctly describes how International Financial Reporting Standards
(IFRSs) should be used?
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Q 4.17
Q4
Q 2.10
Q 2.9
Question/Answer
A
B
C
D
The concept of substance over form requires the legal standing of a transaction to be reflected in the
financial statements.
Information is material if its omission or misstatement could influence the economic decisions of users
taken on the basis of the financial statements.
Based on faithful representation, it may sometimes be necessary to exclude material information from
financial statements due to difficulties establishing an accurate figure.
1 only
1 and 2 only
2 only
2 and 3 only
(2 marks)
Which of the following statements about accounting concepts and the characteristics of financial information
are correct?
Accuracy, Faithful representation, Comparability, Verifiability, Timeliness and Understandability

Relevance, Faithful representation, Consistency, Verifiability, Timeliness and Understandability
Relevance, Comparability, Consistency, Verifiability, Timeliness and Understandability
B
C
D
By requiring authorisation in line with organisational policies

By processing and recoding transactions in accordance with accounting rules
By preventing transactions from being processed inaccurately
By enabling transactions to be recorded as necessary to permit preparation of financial statements
(2 marks)
A
B
C
D
4.17 Which ONE of the following statements does NOT describe a way in which an effective accounting system
facilitates the provision of useful accounting information?
New Question
Time Allocation changed from 38 minutes to 43 minutes
Relevance, Faithful representation, Comparability, Verifiability, Timeliness and Understandability
2.10 The IASB's Conceptual Framework for Financial Reporting gives six qualitative characteristics of financial
information. What are these six characteristics?
2.9
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27
27
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Q 5.5
Q 5.4
Q4
Q 4.18
Question/Answer
The sales day books is used to keep a list of invoices received from suppliers.
Both statements are TRUE
Both statements are FALSE
Statement 1 is TRUE and statement 2 is FALSE
Statement 1 is FALSE and statement 2 is TRUE
2
A
B
C
D
5.5
5.4
(2 marks)
ERRATA
$
140,000*
65,000
//
$20,000
$23,333
$13,000
B
C
D
(2 marks)
A business commenced with capital in cash of $1,000. Inventory costing $800 plus sales tax is purchased
on credit, and half is sold for $1,000 plus sales tax, the customer paying in cash at once. The sales tax rate
is 20%.
$7,000
What was the total sales tax paid to regulatory authorities at the end of May 20X4 (to the nearest $)?
* Lauren Co's sales for the month of $140,000 included $20,000 of sales exempt from sales tax.
Sales tax is charged at a flat rate of 20%. Lauren Co's sales tax account had a zero balance at the beginning
of the month and at the end of the month.
Sales (including sales tax)

Purchases (net of sales tax)
Information relating to Lauren Co's transactions for the month of May 20X4 is shown below:
Total marks changed from 32 to 36
Cash purchases are recorded in the purchases day book.
4.18 Which of the following statements is/are TRUE or FALSE?
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31
31
32
32
32
32
33
33
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Q 6.18
Q 6.17
Q 6.16
Q 6.15
Q 6.14
Q 6.13
Q 6.12
Q 6.11
Q 6.10
Q 6.9
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30
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50 units purchased at a cost of $50 per unit

60 units sold at a selling price of $100 per unit
31
50 units held in opening inventory at a cost of $40 per unit
17
$4,000
$1,800
$2,000
$2,500
A
B
C
D
Under AVCO, what is the value of inventory held for item Z at the end of March 31?
March
6.18 The information below relates to inventory item Z.
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Formerly Q 6.18
Formerly Q 6.17
Formerly Q 6.16
Formerly Q 6.15
Formerly Q 6.14
Formerly Q 6.13
Formerly Q 6.12
Formerly Q 6.11
Formerly Q 6.10
Formerly Q 6.9
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(2 marks)
35
40
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Q 7.10
Q 7.6
34
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Former Q 7.6
33
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An internal control to ensure information relating to non-current assets in the nominal ledger and the
financial statements is correct
To enable the organisation to comply with IAS 16 Property, plant and equipment
C
D
Assets which are intended to be used by the business on a continuing basis, include both tangible and
intangible assets that do not meet the IASB definition of a current asset
Non-monetary assets without physical substance that are controlled by the entity and from which future
benefits are expected to flow
(2 marks)
B
C
D
Assets in the form of materials or supplies to be consumed in the production process
Assets that are held for use in the production of goods or services and are expected to be used during
more than one accounting period
Which one of the following statements correctly defines non-current assets?
A profit on disposal $5,500

A loss on disposal $4,500
A loss on purchase of a new asset $5,500
A profit on disposal $500
A
B
C
D
(2 marks)
8.15 A non-current asset (cost $15,000, depreciation $10,000) is given in part exchange for a new asset costing
$20,500. The agreed trade-in value was $5,500. Which of the following will be included in the statement of
profit or loss?.
The company's policy is to charge depreciation at 20% per year on the reducing balance basis, with proportionate
depreciation in the years of purchase and disposal.
7.6
New Question
(2 marks)
To ensure the organisation is aware of the age of plant and machinery
ERRATA
An internal control to ensure details of all assets are readily available in the event of loss or theft
//
Which of the statements below correctly states the purpose of the asset register?
Deleted
7.2
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Q9
Q 9.13
Q 10.13
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48
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Q 10.12
45
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45
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Q 9.11
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Former Q 10.12
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$125,000
$25,000
$50,000
B
C
D
Formerly Q 10.15
Deleted
Formerly Q 10.13
Deleted
Total Marks changed from 24 to 26
(2 marks)
To reduce the cost of an intangible non-current asset in the statement of financial position to its
estimated market value
To account for the risk associated with intangible assets
To ensure that funds are available for the eventual purchase of a replacement non-current asset
To allocate the cost of an intangible non-current asset over its useful life
(2 marks)
9.13 What is the purpose of amortisation?
New Question
$250,000
9.11 Theta Co purchased a patent on 31 December 20X3 for $250,000. Theta Co expects to use the patent for
ten years, after which it will be valueless. According to IAS 38 Intangible assets, what amount will be
amortised in Theta Cos statement of profit or loss and other comprehensive income for the year ended
31 December $20X4?
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Q 11.1
Q 11
Q 10
Q 10.14
Question/Answer
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ERRATA
$125,000
$75,000
$25,000
B
C
D
$225,000
$325,000
$375,000
$425,000
Statement 1 only
Statements 1 and 2 only
Statements 1 and 3 only
Statement 3 only
A
B
C
D
3. Receivables represent money owed to the business.
2. Payables are an asset.
1. Payables represent money the business owes.
11.1 Which of the following statements regarding payables and receivables are TRUE?
New Question
$175,000
(2 marks)
(2 marks)
What will Bookz Co profit and net asset position be after an entry to correct the under-accrual has been
processed?
Profit for the year
Net asset position
Before this under-accrual was discovered, Bookz Co's draft statement of profit or loss for the accounting year
ended 31 December 20X2 showed a profit of $125,000 and their draft statement of financial position showed
net assets of $375,000.
As at the end of December 20X2, Bookz Co had accrued $100,000 in royalties due to writers. However, a
check of the royalty calculation performed in January 20X3 established that the actual figure due to be paid by
Bookz Co to writers was $150,000.
10.14 Bookz Co pays royalties to writers annually, in February, the payment covering the previous calendar year.
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50
50
50
51
51
51
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Q 11.11
Q 11.10
Q 11.9
Q 11.8
Q 11.7
Q 11.6
Q 11.5
Q 11.4
Q 11.12
50
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50
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Former Q 11.11
49
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Irrecoverable debts
Allowance for receivables
Irrecoverable debts
Receivables
A
B
C
D
Debit
Receivables
Receivables
Credit
Which of the following is the correct double entry to create this allowance?
(2 marks)
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 allowance has
been made for receivables.
New Question
Deleted
Formerly Q 11.10
Formerly Q 11.9
Formerly Q 11.8
Formerly Q 11.7
Formerly Q 11.6
Formerly Q 11.5
Formerly Q 11.4
Formerly Q 11.3
Formerly Q 11.2
Formerly Q 11.1
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Q 12
Q 11
Q 11.21
Q 11.20
Q 11.19
Q 11.18
Q 11.17
Q 11.16
Q 11.15
Q 11.14
Q 11.13
Question/Answer
The separation of product and service delivery from payment

Provides time for appropriate payment approval procedures
Fewer irrecoverable debts
B
C
D
Improved convenience for the customer
11.21 Which one of the following statements is NOT a benefit of offering credit facilities to customers?
New Question
Formerly Q 11.19
Formerly Q 11.18
Formerly Q 11.17
Formerly Q 11.16
Formerly Q 11.15
Formerly Q 11.14
Formerly Q 11.13
Formerly Q 11.12
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//
11
(2 marks)
ERRATA
12
Q 13.7
60
Q 12
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Q 12.11
Former Q 13.7
56
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$ 25,000
$300,000
$150,000
B
C
D
A
B
C
D
$128,200
$509,000
$224,200
$144,600
What should the closing balance be when all the errors are corrected?
All items relate to credit purchases.
PAYABLES LEDGER CONTROL ACCOUNT

$
Opening balance (amounts
318,600
Purchases
owed to suppliers)
Contras against debit
Cash paid to suppliers
1,364,300
balances in receivables ledger
Purchases returns
41,200
Discounts received
Refunds received from suppliers
2,700
Closing balance
$1,726,800
13.7 The payables ledger control account below contains a number of errors:
New Question
Deleted
$125,000
(2 marks)
48,000
8,200
402,000
$1,726,800
$
1,268,600
(2 marks)
What amount should Mobiles Co include as a provision in the statement for profit or loss for the year ended 31
December 20X4?
Based on past experience, the company expects warranty claims for 5% of units sold. Half of these claims will
be for a major defect, with an average claim value of $50. The other half of these claims will be for a minor
defect, with an average claim value of $10.
12.11 Mobiles Co sells goods with a one year warranty under which customers are covered for any defect that
becomes apparent within a year of purchase. In calendar year 20X4, Mobiles Co sold 100,000 units.
New Question
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Q 14.5
65
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Former Q 14.5
61
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Control accounts help deter fraud.
Cheque payments totalling $3,275 have been entered in the cashbook but have not been presented for
payment.
Cheques totalling $5,380 have been correctly entered on the debit side of the cashbook but have not
been paid in at the bank.
(iii)
(iv)
(v)
$9,520 overdrawn
$11,200 overdrawn
$9,520 in credit
$11,200 in credit
A
B
C
D
13
(2 marks)
The bank has credited the account in error with $425 which belongs to another customer.
(ii)
What was the balance as shown by the bank statement before taking the above items into account?
The bank balance in the cashbook before taking the items below into account was $8,970 overdrawn.
Bank charges of $550 on the bank statement have not been entered in the cashbook.
(i)
14.5 The following information relates to a bank reconciliation.
New Question
Deleted
A receivables ledger control account aims to ensure there are no errors in the personal ledger.
(2 marks)
A receivables ledger control account ensures the trial balance balances.
ERRATA
A receivables ledger control account provides a check on the overall accuracy of the personal ledger
accounts.
//
13.11 Which one of the following is not a purpose of a receivables ledger control account?
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Q 15.16
Q 15
Question/Answer
$700,000
$600,000
$725,000
$600,000
A
B
C
D
Total assets (SOFP)
$ 75,000
$225,000
$100,000
$200,000
Profit for year
(2 marks)
What would the total assets figure in the Statement of Financial Position, and the adjusted profit for the year
figure, be after adjusting for this error?
15.16 . Beta Co has total assets of $650,000 and profit for the year of $150,000 recorded in the financial
statements for the year ended 31 December 20X3. Inventory costing $50,000, with a resale value of
$75,000, was received into the warehouse on 2 January 20X4 and included in the inventory value that was
recorded in the financial statements at 31 December 20X3.
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Former Q 16.6
Q 15
Q 15.17
Question/Answer
720
900
840
1 November 20X0 for three months to 31 October 20X0

1 February 20X1 for three months to 31 January 20X1
30 June 20X1 for three months to 30 April 20X1
//
ERRATA
$560
$860
$860
B
C
D
Deleted
$560
Statement of
financial position
$3,060
$3,320
$3,060
$3,320
Statement of
profit or loss
15
(2 marks)
What are the appropriate amounts for electricity to be included in the financial statements of Jingles Co for the
year ended 30 June 20X1?
Jingles Co expects the next bill due in September to be for the same amount as the bill received in June.
600
300
1 August 20X0 for three months to 31 July 20X0
Payments made during the year
Opening balance for electricity accrued at 1 July 20X0
15.17 The electricity account for Jingles Co for the year ended 30 June 20X1 was as follows.
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83
85
QB
QB
Q 17.6
Q 17.5
Q 17.4
82
Q 17.3
QB
81
QB
Q 17.2
Q 17.4
79
QB
Q 17.1
82
79
QB
Q 17
QB
79
QB
Q 16.6
Former Q 17.4
74
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Suspense account
Plant and machinery
Plant and machinery
Suspense account
Bank current account
Suspense account
Formerly 17.7
Formerly 17.6
Exam Focus Point added
Formerly 17.5
Deleted
Exam Focus Point deleted
Plant and machinery

Bank current account
Which of the following journal entries would correct the error?
25,000
25,000
25,000
25,000
Debit
$
25,000
25,000
25,000
25,000
Credit
$
(2 marks)
Subsequent investigation revealed the difference was due to one side of an entry to record the purchase of
machinery for $25,000, by cheque, failing to post to the plant and machinery account.
16.6 A company's trial balance failed to agree, the out of balance difference of $25,000 being posted to a suspense
account.
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86
87
91
92
95
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QB
QB
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QB
QB
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Former Q 19.19
Q 19.10
Q 19
Q 18.12
Q 17
Q 17.8
Q 17.8
Q 17.7
Question/Answer
//
ERRATA
$112,900
$381,600
$510,900
B
C
D
7,200
9,400
$
381,600
6,800
112,900
Deleted
17
(2 marks)
19.10 Which of the following items are required to be disclosed by a limited liability company, either on the face of
their main financial statements or in the notes, according to International Financial Reporting Standards?
$517,900
Which of the following correctly represents Alpha's sales figure for 20X4?
Closing balance of Trade receivables
Other information, Alpha, 20X4

Irrecoverable debts written off
Discounts allowed to credit customers
Cash received from credit customers and paid into the bank
Expenses paid out of cash received from credit customers before banking
Cash sales
Bank and cash summary, Alpha, 20X4
Alphas first year of trading was 20X4. From reviewing Alphas bank statements and the incomplete records
relating to cash maintained, the following summary has been compiled.
18.12 Alpha is a sole trader who does not keep proper accounting records.
Formerly 17.9
Formerly 17.8
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QB
QB
QB
Q 21
Q 19
Q 19.23
Q 19.19
Question/Answer
Non-statutory reserves must be distributed as dividends

Neither statutory nor non-statutory reserves are available for distribution as dividends.
Non-statutory reserves consist of profits which are distributable as dividends.
Statutory reserves are required by law and are available for the distribution of dividends.
(2 marks)
$15,000
$17,500
$20,000
B
C
D
$22,500
(2 marks)
What should the charge for taxation be in Fruitz's statement of profit or loss (SPL) for the year ended 31
December 20X2?
Fruitzs accountant estimates their tax liability for profits earned in 20X2 will be $20,000.
19.23 Fruitz Co has a tax liability relating to 20X1 brought forward in 20X2 of $16,000. This liability is finally
agreed at $18,500, which is paid is paid in 20X2.
New Question
A
B
C
D
19.19 A distinction is made between Statutory reserves and Non-statutory reserves. Which ONE of the following
statements is true?
New Question
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QB
QB
QB
QB
Q 22.17
Q 22
Q 21
Q 21.9
Question/Answer
//
ERRATA
Sales revenue was $33,400, including $900 receivables at the year end. Brought forward receivables
were $400.
Interest on cash deposits at the bank amounted to $175.
Using the direct method, what is Big Time Co's cash flow from operating activities?
19
(2 marks)
Interest of $2,100 on a long term loan was paid in the year.
$3,425
$3,775
$1,425
$6,775
Wages and salaries amounted to $9,500, of which $750 was unpaid at the year end. The accounts for
the previous year showed an accrual for wages and salaries of $1,500.
A
B
C
D
Purchases from suppliers were $18,500, of which $2,550 was unpaid at the year end. Brought
forward payables were $1,000.
22.17 Big Time Co had the following transactions during the year.
New Question
(2 marks)
An estimate of the financial effect (or a statement that such an estimate cannot be made) only
C
No disclosure required
The nature of the event only
The nature of the event and an estimate of the financial effect (or a statement that such an estimate
cannot be made)
21.9 If a material event occurs after the reporting date but before the financial statements are authorised for issue
outside the organisation, and this event does NOT require adjustment, what information should be disclosed in
the financial statements?
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QB
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Q 22
Q 22.20
Q 22.19
Q 22.18
Question/Answer
If a business makes a loss, it has negative cash flow.

A business may make a profit but have negative cash flow.
A business that breaks even has cash inflows equal to cash used.
B
C
D
(2 marks)
(2 marks)
Under IAS 7 Statement of cash flows the statement of cash flows may cover a different period of time to the
other financial statements.
Cash flow figures are more open to manipulation than the profit figure.
There is an opportunity to reclassify some cash outflows that might have been reported in the operating
section as investing cash outflows.
Under IAS 7 Statement of cash flows, an entity may use any format for their statement.
22.20 Which one of the following statements correctly identifies a valid disadvantage to users of financial statements
of the statement of cash flows?
New Question
(2 marks)
Jo is correct. Proactive cash flow management is required under IAS 7 Statement of cash flows.
Jo is correct. A business that does not have cash available to fund operations is likely to fail.
Adam is correct. A profitable business will always survive and prosper.
B
D
Adam is correct. A profitable business should not waste management time on cash flow issues.
Adam and Jo have two different views. Who is correct, and why?
22.19 Toots Co has made healthy profits for the past year, although at times the company has been close to running
out of cash. Because Toots Co is profitable, Adam, their accountant is unconcerned by the cash shortage. Jo,
the financial controller at Toots Co, is concerned. Jo tells Adam, profits are fine on paper, but in the real world
cash is king. Jo believes Toots Co needs to take a more proactive approach to cash flow management.
New Question
If a business makes a profit, it has positive cash flow.
22.18 Which one of the following statements is correct?
New Question
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123
123
123
127
128
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QB
QB
QB
QB
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128
128
129
129
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QB
QB
Q 26.2
128
QB
Former Q 26.8
Q 26.6
Q 26.5
Q 26.4
Q 26.3
Former Q 26.2
QB
Q 26
Q 25
Q 24
Q 24.23
Q 24.22
Q 24.21
Q 24.20
122
QB
Q 24
Former Q 24.20
116
QB
Question/Answer
QB
Page
Question section
//
ERRATA
Deleted
26.6 Which of the following is a ratio which is used to measure how much a business owes in relation to its size?
Formerly Q 26.7
21
26.5 Quality Co are drafting their financial statements. An extract from their draft statement of financial position at
31 March 20X8 is set out below.
Formerly Q 26.6
Formerly Q 26.5
Formerly Q 26.4
Formerly Q 26.3
Deleted
Exam focus point. It is unlikely that there would be a 15 mark question solely on interpretation in the exam.
However, interpretation could easily form part of a 15 mark question and test the skills covered in this question.
Interpretation could also be tested in a multiple-choice question, such as those included in section 26 of this Kitfair.
Formerly Q 24.24
Formerly Q 24.23
Formerly Q 24.22
Formerly Q 24.21
Deleted
Details of changes
22
Q 26.9
130
130
130
132
132
132
132
133
133
133
QB
QB
QB
QB
QB
QB
QB
QB
QB
QB
Q 27. 10
Q 27.9
Q 27.8
Q 27.7
Q 27.6
Q 27.5
Former Q 27.5
Q 27
Q 26
Former Q 26.12
QB
Q 26.8
130
QB
Q 26.7
Former Q 26.10
129
QB
Question/Answer
QB
Page
Question section
(iii) A contingent liability should be disclosed in the notes to the financial statements.
Formerly Q 27.11
Formerly Q 27.10
Formerly Q 27.9
Formerly Q 27.8
Formerly Q 27.7
Formerly Q 27.6
Deleted
Formerly 26.13
Deleted
D Liquidity appears to be poorly-controlled as shown by the existence of a bank overdraft
C Liquidity appears to be poorly-controlled as shown by the companys relatively high current ratio
B Liquidity appears to be poorly-controlled as shown by the large payables balance
A Liquidity appears to be well managed as the bank overdraft is relatively low
Which of the following statements accurately describe the companys liquidity position?
(2 marks)
The industry the company operates in has a current ratio norm of 1.8. Companies who manage liquidity well in this
industry have a current ratio lower than the norm.
Formerly Q 26.11
Deleted
Formerly Q 26.9
Details of changes
134
135
135
135
135
135
139
142
QB
QB
QB
QB
QB
QB
QB
QB
Q 29
Q 28.11
Q 27
Q 27.19
Q 27.18
Q 27.17
Q 27.16
Q 27.15
Q 27.14
Q 27.13
Q 29.2
134
QB
142
134
QB
Q 27.12
QB
134
QB
Q 27.11
Former Q 29.2
133
QB
Question/Answer
QB
Page
Question section
1 only
1 and 3
2 and 3
3 only
A
B
C
D
Formerly Q 29.3
Deleted
Material non-adjusting events are disclosed by note in the financial statements.
23
(2 marks)
Contingent liabilities must be provided for in financial statements if it is probable that they will arise.
ERRATA
Contingent assets are included as assets in financial statements if it is probable that they will arise.
//
28.11 Which of the following statements are correct?
Formerly Q 27.20
Formerly Q 27.19
Formerly Q 27.18
Formerly Q 27.17
Formerly Q 27.16
Formerly Q 27.15
Formerly Q 27.14
Formerly Q 27.13
Formerly Q 27.12
Details of changes
24
142
142
143
143
143
143
144
144
144
145
145
145
145
146
146
QB
QB
QB
QB
QB
QB
QB
QB
QB
QB
QB
QB
QB
QB
QB
QB
Page
Question section
Former 29.19
Q 29.17
Q 29.16
Q 29.15
Q 29.14
Q 29.13
Q 29.12
Q 29.11
Q 29.10
Q 29.9
Q 29.8
Q 29.7
Q 29.6
Q 29.5
Q 29.4
Q 29.3
Question/Answer
Deleted
Formerly Q 29.18
Formerly Q 29.17
Formerly Q 29.16
Formerly Q 29.15
Formerly Q 29.14
Formerly Q 29.13
Formerly Q 29.12
Formerly Q 29.11
Formerly Q 29.10
Formerly Q 29.9
Formerly Q 29.8
Formerly Q 29.7
Formerly Q 29.6
Formerly Q 29.5
Formerly Q 29.4
Details of changes
148
148
149
149
QB
QB
QB
QB
Q 30.8
Q 30.7
Q 30.6
Q 30.5
Q 30.4
148
QB
Q 30
Q 30.3
147
QB
Q 29
147
147
QB
Q 29.19
QB
147
QB
Q 29.18
Former Q 30.3
146
QB
Question/Answer
QB
Page
Question section
//
ERRATA
$286,430
$282,830
$284,430
B
C
D
Formerly Q 30.9
Formerly Q 30.8
Formerly Q 30.7
Formerly Q 30.6
Formerly Q 30.5
Formerly Q 30.4
Deleted
Formerly 29.20
$290,150
What should the closing balance on the account be when the errors in it are corrected?
25
(2 marks)
29.18 The following receivables ledger control account has been prepared by a trainee accountant:
$
$
20X3
20X3
1 Jan Balance
31 Dec Cash received from credit
284,680
31 Dec Credit sales
customers
189,120
179,790
Discounts allowed
Contras against amounts
3,660
Irrecoverable debts
owing by company in
written off
1,800
payables ledger
800
Sales returns
Balance
4,920
303,590
484,180
484,180
New Question
Details of changes
26
151
151
152
152
152
158
QB
QB
QB
QB
QB
QB
Q 32.3
159
159
159
159
160
160
160
160
QB
QB
QB
QB
QB
QB
QB
QB
Q 32.10
Q 32.9
Q 32.8
Q 32.7
Q 32.6
Q 32.5
Q 32.4
Former Q 32.3
QB
Q 32
Q 30
Q 30.18
Q 30.17
Q 30.16
Q 30.15
Q 30.14
151
QB
Q 30.12
Q 30.13
150
QB
Q 30.11
151
150
QB
Q 30.10
QB
150
QB
Q 30.9
Former Q 30.14
149
QB
Question/Answer
QB
Page
Question section
Formerly Q 32.11
Formerly Q 32.10
Formerly Q 32.9
Formerly Q 32.8
Formerly Q 32.7
Formerly Q 32.6
Formerly Q 32.5
Formerly Q 32.4
Deleted
Formerly Q 30.20
Formerly Q 30.19
Formerly Q 30.18
Formerly Q 30.17
Formerly Q 30.16
Formerly Q 30.15
Deleted
Formerly Q 30.13
Formerly Q 30.12
Formerly Q 30.11
Formerly Q 30.10
Details of changes
162
162
163
163
163
QB
QB
QB
QB
QB
Q 33
Q 32
Q 32.19
Q 32.18
Q 32.17
Q 32.16
Q 33.13
166
166
167
167
167
167
167
QB
QB
QB
QB
QB
QB
QB
Q 33
Q33.18
Q 33.17
Q 33.16
Q 33.15
Q 33.14
Former Q 33.14
QB
Q 33.12
166
162
QB
Q 32.15
QB
162
QB
Q 32.14
Q 33.11
161
QB
Q 32.13
166
161
QB
Q 32.12
QB
161
QB
Q 32.11
Former Q 33.11
161
QB
Question/Answer
QB
Page
Question section
Formerly Q 33.20
Formerly Q 33.19
Formerly Q 33.18
Formerly Q 33.17
Formerly Q 33.16
Formerly Q 33.15
Deleted
Formerly Q 33.13
Formerly Q 33.12
Deleted
Formerly Q 32.20
Formerly Q 32.19
Formerly Q 32.18
Formerly Q 32.17
Formerly Q 32.16
Formerly Q 32.15
Formerly Q 32.14
Formerly Q 32.13
Formerly Q 32.12
Details of changes
//
27
ERRATA
28
171
171
AB
AB
A 1.12
171
171
171
171
171
171
AB
AB
AB
AB
AB
AB
A1
A 1.16
A 1.15
A 1.14
A 1.13
Former A 1.12
AB
A 1.10
A 1.9
A 1.8
171
AB
Answer 1.3
Former A 1.8
171
Answer Bank
Question/Answer
AB
Page
Question section
(2) is the IASBs Conceptual framework description of the purpose of financial statements. (1) is false although the supplier needs to know the current situation, the supplier also needs to be able to assess
future prospects to ensure the entity has the ability to pay and to support an ongoing relationship.
(1) is incorrect, the presentation or classification can be changed if there is a significant change in the
nature of operations, if an IFRS requires it or if a review of the accounts indicates a more appropriate
presentation. (2) is incorrect, companies should not make provisions in order to smooth profits,
provisions should only be made in accordance with IAS 37.
The Statement of Financial Position contains a list of all the assets owned and all the liabilities owed by
a business.
The Statement of Profit or Loss contains a record of income generated and expenditure incurred over a
given period.
The IFRS Foundation does not focus primarily on the needs of global, multi-national organisations. One
of the objectives of the foundation is to take account of the financial reporting needs of emerging
economies and small and medium-sized entities (SMEs).
One of the ways IFRSs are used is as an international benchmark for those countries which develop
their own requirements.
1.16 A
Answer to New Question Formerly A 1.17
1.15 C
Answer to New Question Formerly A 1.16
Formerly A 1.15
Formerly A 1.14
Formerly A 1.13
Deleted
1.10 C
Answer to New Question
1.9
1.8
Deleted
1.3
Details of changes
Page
172
172
172
175
175
175
176
176
176
177
177
177
Question section
AB
AB
AB
AB
AB
AB
AB
AB
AB
AB
AB
AB
A 6.12
A 6.11
A 6.10
A 6.9
A 6.8
Former A 6.8
A 5.4
A 4.18
A 4.17
A 2.10
A 2.9
A 2.7
Question/Answer
Relevance, Faithful representation, Comparability, Verifiability, Timeliness and Understandability.
No system can prevent a transaction being processed inaccurately, for example being posted to an
incorrect but valid account code (although an effective system can reduce the likelihood of this).
$7,000
6.12 C
Sales ($120,000 x 20% / 120%)
$2,950 (10 units @$45 and 50 units @$50)
Formerly A 6.13
Formerly A 6.12
Formerly A 6.11
Formerly A 6.10
Formerly A 6.9
Deleted
$
13,000
7,000
20,000
SALES TAX CONTROL ACCOUNT
20,000
$
20,000
29
Cash purchases are recorded in the cash book. The sales day book lists invoices sent to customers, not
invoices received from suppliers.
Purchases ($65,000 20%)

Paid to tax authority
5.4
4.18 B
ERRATA
Information is material if its omission or misstatement could influence the economic decisions of users
taken on the basis of the financial statements. Statement 1 contradicts substance over form. Statement
3 is also incorrect, faithful representation does not prevent estimates being made.
4.17 C
//
Whenever legally possible, the commercial effect of a transaction should be reflected in the financial
statements..
2.10 A
2.9
2.7
Details of changes
30
177
177
178
AB
AB
AB
A 7.2
A 6.18
A 6.17
A 6.16
A 6.15
A 7.6
177
AB
178
177
AB
A 6.14
AB
177
AB
A 6.13
Former A 7.6
177
AB
Question/Answer
AB
Page
Question section
- 60
40
31 March
7.6
$45
$45
$40
$50
$45*
2,700
Cost
of issues
$
1,800
Balance in
inventory
$
2,000
2,500
4,500
An internal control to ensure information relating to non-current assets in the nominal ledger and the
financial statements is correct.
Assets which are intended to be used by the business on a continuing basis, including both tangible
and intangible assets that do not meet the IASB definition of a current asset.
Deleted
7.2
50
50
100
1 March
17 March
* 4,500 / 100
Units
Date
6.18 B
Unit cost
Continuous inventory reduces the need for physical inventory counts, but in practice periodic counts are
needed to ensure that the recorded quantities of inventory match the physical quantities that are held
(and, for example, there have not been significant losses of inventory due to theft).
6.17 C
Formerly A 6.18
Formerly A 6.17
Formerly A 6.16
Formerly A 6.15
Formerly A 6.14
Details of changes
184
184
184
184
184
184
184
184
AB
AB
AB
AB
AB
AB
AB
AB
A 11.6
A 11.5
A 11.4
A 11.3
A 11.2
A 11.1
A 10.14
A 10.13
A 10.12
9.13
183
181
AB
9.11
AB
181
AB
A 8.15
Former A 10.12
180
AB
Question/Answer
AB
Page
Question section
500
Profit on disposal
Formerly A 11.5
Formerly A 11.4
Formerly A 11.3
Formerly A 11.2
Formerly A 11.1
Payables are a liability, so statement 2 is false.
Dr Expenses (SPL) $50,000

Cr Accruals (SOFP)
$50,000
This reduces profit from $125,000 to $75,000 and the net asset position from $375,000 to
$325,000.
The double entry to record the accrual in the accounts is:
11.1 C
31
ERRATA
Amortisation is an application of the matching concept and allocates the cost of the intangible asset
over its useful life (over the accounting periods expected to benefit from its use).
Formerly A 10.15
10.14 C
//
The patent should be amortised over its useful life of 10 years. (250,000 / 10) = $25,000.
5,500
Trade-in allowance
Formerly A 10.13
Deleted
9.13 A
$
Carrying amount at disposal (15,000 10,000) 5,000
9.11 C
8.15 D
Details of changes
32
185
185
185
185
185
185
185
185
AB
AB
AB
AB
AB
AB
AB
AB
AB
185
AB
Former A 13.7
A 11.21
A 11.20
A 11.19
A 11.18
A 11.17
A 11.16
A 11.15
A 11.14
A 11.13
A 11.12
185
AB
A 11.10
A 11.11
184
AB
A 11.9
185
184
AB
A 11.8
AB
184
AB
A 11.7
Former A 11.11
184
AB
Question/Answer
AB
Page
Question section
When a business first establishes an allowance for receivables the full amount of the allowance should
be debited to Irrecoverable debts (statement of profit or loss) and credited to Allowance for receivables
(statement of financial position).
Deleted

11.21 D
Offering credit facilities will not reduce the level of irrecoverable debts.
Formerly 11.19
Formerly A 11.18
Formerly A 11.17
Formerly A 11.16
Formerly A 11.15
Formerly A 11.14
Formerly A 11.13
Formerly A 11.12
11.12
Formerly A 11.10
Deleted
Formerly A 11.9
Formerly A 11.8
Formerly A 11.7
Formerly A 11.6
Details of changes
191
AB
A 15.16
A 14.5
189
A 13.11
AB
187
AB
A 13.7
Former 14.5
187
AB
Question/Answer
AB
Page
Question section
PAYABLES LEDGER CONTROL ACCOUNT

$
$
Purchases returns
41,200
Bal b/f
318,600
Cash paid
1,364,300
Purchases
1,268,600
Discounts received
8,200
Refunds
2,700
Contras
48,000
Bal c/f
128,200
1,589,900
1,589,900
Bank charges
Balance
Cash book
15.16 B
$600,000 - $50,000 = $600,000.
(9,520)
(550)
(8,970)
$11,200 overdrawn
14.5 B
Deleted
$150,000 - $50,000 = $100,000.
5,380
Outstanding deposits
(9,520)
(3,275)
(425)
(11,200)
Unpresented cheques
Credit in error
Balance b/f (bal fig)
Bank statement
13.11 B A receivables ledger control account does not ensure the trial balance balances.
13.7 A
Details of changes
//
33
ERRATA
34
199
201
202
203
AB
AB
AB
AB
A 17.8
A 17.7
A 17.6
A 17.5
A 17.4
197
A 16.6
AB
192
AB
A 15.17
Former A 17.4
191
AB
Question/Answer
AB
Page
Question section
Paid bank
1 November
560
Paid bank
Accrual c/d $840 2/3
30 June
30 June
SPL
Balance b/fwd
3,620
3,320
300
The $25,000 currently held in the Suspense account needs to be posted to Plant and machinery.
Formerly 17.9
Formerly 17.8
Formerly A 17.7
Formerly A 17.6
Formerly A 17.5
Deleted
16.6 C
3,620
840
Paid bank
900
720
600
1 February
20Y0:
Paid bank
1 August
20X9:
ELECTRICITY ACCOUNT
Statement of financial position $560, Statement of profit or loss $3,320.
15.17 A
Details of changes
Page
205
207
207
207
207
208
Question section
AB
AB
AB
AB
AB
AB
A 21.9
A 19.23
A 19.20
A 19.19
A 19.17
A 18.12
Question/Answer
Share premium @ 1.1.20X0

1.4.20X0 200,000 shares @ (130c 50c)
Bonus issue (as above)
Share capital @ 1.1.20X0

Issue on 1.4.20X0 (200,000 @ 50c)
Bonus issue (1.2m 4) @ 50c
Share capital as at 31.12.20X0
Non-statutory reserves consist of profits which are distributable as dividends
21.9
ERRATA
300,000
160,000
(150,000)
310,000
$
500,000
100,000
150,000
750,000
The nature of the event and an estimate of the financial effect (or a statement that such an estimate
cannot be made) should be disclosed.
35
The under provision for the previous year of $2,500 plus the provision for the current year of $20,000
gives a charge to the SPL of $22,500.
19.23 A
19.20
19.19 C
//
A bonus issue does not raise any funds, instead other reserves are capitalised and reclassified as share
capital. A rights issue is an issue of shares for cash, the right to buy the shares are initially offered to
existing shareholders. If the existing shareholders do not take up their right to buy the shares, then their
shareholding will be diluted.
19.17 B
18.12 A
Sales = 381,600 + 6,800 + 112,900 + 7,200 + 9,400 = $517,900
Details of changes
36
218
AB
A 24.12
A 22.20
A 22.19
A 24.20
210
AB
218
210
AB
A 22.18
AB
210
AB
A 22.17
Former A 24.20
210
AB
Question/Answer
AB
Page
Question section
(10,250)
(2,100)
Cash paid to employees ($1,500 + $9,500 $750)

Interest paid
Net cash flow from operating activities

A business may make a profit but have negative cash flow.
Jo is correct. A business that does not have cash available to fund operations is likely to fail
An investor must have significant influence over the investee in order for the investee to be classified as
an associate. If the investor holds 20% or more of the voting power of the entity, significant influence
can be assumed (unless it can clearly be shown that this is not the case). Therefore 1 is true. For an
investee to be classified as a subsidiary, the investor (the parent) must have control over the investee
(the subsidiary). Control can be demonstrated if the investor has the power to appoint the majority of
board members of the investee, so 2 is true. 3 is incorrect because the power to govern the financial
and operating policies of F make F a subsidiary of E. Likewise, 4 is incorrect as the power to govern the
financial and operating policies of H makes H a subsidiary of G.
3 and 4 are incorrect.
There is an opportunity to reclassify some cash outflows that might have been reported in the operating
section as investing cash outflows. For example, questionable capitalisation of expenses.
Formerly A 24.21
Deleted
24.12 C
22.20 B
22.19 D
22.18 C
3,775
175
(16,950)
Cash paid to suppliers ($1,000 + $18,500 $2,550)
Interest received
32,900
Cash received from customers ($400 + $33,400 $900)
Cash flows from operating activities
22.17 B
Details of changes
220
220
220
AB
AB
AB
A 27.5
221
221
221
221
AB
AB
AB
AB
A 27.8
A 27.7
A 27.6
Former A 27.5
AB
A 26.9
AB
220
Former 26.12
AB
A 26.8
AB
220
Former 26.10
A 26.7
AB
AB
Former 26.8
A 26.6
A 26.5
A 26.4
AB
220
220
AB
A 26.3
A 26.2
A 24.23
220
219
AB
A 24.22
AB
219
AB
A 24.21
Former 26.2
219
AB
Question/Answer
AB
Page
Question section
The gearing ratio is used to assess how much the company owes in relation to its size.
Current ratio is 2,900 : 1,100 = 2.6: 1 ie high compared to the industry norm
Formerly A 27.9
Formerly A 27.8
Formerly A 27.7
Formerly A 27.6
Deleted
Formerly A 26.13
Deleted
26.8 C
Formerly A 26.11
Deleted
Formerly A 26.9
Deleted
26.6 C
Formerly A 26.7
Formerly A 26.6
Formerly A 26.5
Formerly A 26.4
Formerly A 26.3
Deleted
Formerly A 24.24
Formerly A 24.23
Formerly A 24.22
Details of changes
//
37
ERRATA
38
225
225
225
AB
AB
A 29.9
A 29.8
A 29.7
A 29.6
A 29.5
A 29.4
A 29.3
AB
A 28.11
225
223
AB
A 27.19
AB
222
AB
A 27.18
225
222
AB
A 27.17
AB
222
AB
A 27.16
225
222
AB
A 27.15
AB
222
AB
A 27.14
225
221
AB
A 27.13
AB
221
AB
A 27.12
A 29.2
221
AB
A 27.11
225
221
AB
A 27.10
AB
221
AB
A 27.9
Former 29.2
221
AB
Question/Answer
AB
Page
Question section
All three statements are correct
Only statements 2 and 3 are correct.
Formerly A 29.10
Formerly A 29.9
Formerly A 29.8
Formerly A 29.7
Formerly A 29.6
Formerly A 29.5
Formerly A 29.4
Formerly A 29.3
Deleted
28.11 C
Formerly A 27.20
Formerly A 27.19
Formerly A 27.18
Formerly A 27.17
Formerly A 27.16
Formerly A 27.15
Formerly A 27.14
Formerly A 27.13
Formerly A 27.12
27.10 D
Formerly A 27.11
Formerly A 27.10
Details of changes
226
226
AB
AB
A 29.17
A 29.16
A 29.15
A 30.3
226
226
227
227
227
AB
AB
AB
AB
AB
A 30.7
A 30.6
A 30.5
A 30.4
Former A30.3
AB
A 29.19
226
225
AB
A 29.14
AB
225
AB
A 29.13
A 29.18
225
AB
A 29.12
226
225
AB
A 29.11
AB
225
AB
A 29.10
Former 29.19
225
AB
Question/Answer
AB
Page
Question section
Opening balance
Credit sales
Formerly A 30.8
Formerly A 30.7
Formerly A 30.6
Formerly A 30.5
Formerly A 30.4
Deleted
Formerly A 29.20
29.18 C
Answer To New Question
Deleted
Formerly A 29.18
Formerly A 29.17
Formerly A 29.16
Formerly A 29.15
Formerly A 29.14
Formerly A 29.13
Formerly A 29.12
Formerly A 29.11
Details of changes
RECEIVABLES LEDGER CONTROL ACCOUNT

$
Cash received
284,680
Discounts allowed
189,120
Irrecoverable debts written off
Sales returns
Contras
Closing balance
473,800
//
39
ERRATA
$
179,790
3,660
1,800
4,920
800
282,830
473,800
40
228
228
228
228
AB
AB
AB
AB
A 32.3
230
231
231
231
231
231
231
231
231
AB
AB
AB
AB
AB
AB
AB
AB
AB
A 32.11
A 32.10
A 32.9
A 32.8
A 32.7
A 32.6
A 32.5
A 32.4
Former A 32.3
AB
A 30.18
A 30.17
A 30.16
A 30.15
A 30.14
228
A 30.12
AB
227
AB
A 30.11
A 30.13
227
AB
A 30.10
228
227
AB
A 30.9
AB
227
AB
A 30.8
Former A 30.14
227
AB
Question/Answer
AB
Page
Question section
Formerly A 32.12
Formerly A 32.11
Formerly A 32.10
Formerly A 32.9
Formerly A 32.8
Formerly A 32.7
Formerly A 32.6
Formerly A 32.5
Formerly A 32.4
Deleted
Formerly A 30.20
Formerly A 30.19
Formerly A 30.18
Formerly A 30.17
Formerly A 30.16
Formerly A 30.15
Deleted
Formerly A 30.13
Formerly A 30.12
Formerly A 30.11
Formerly A 30.10
Formerly A 30.9
Details of changes
232
232
AB
AB
A 32.19
A 32.18
A 32.17
233
233
233
233
233
AB
AB
AB
AB
AB
Questions
Mock Exam 2
A 33.13
233
AB
Former Q 4
A 33.18
A 33.17
A 33.16
A 33.15
A 33.14
Former A 33.14
AB
A 33.12
233
232
AB
A 32.16
AB
232
AB
A 32.15
A 33.11
232
AB
A 32.14
233
232
AB
A 32.13
AB
231
AB
A 32.12
Former 33.11
231
AB
Question/Answer
AB
Page
Question section
Deleted
Formerly A 33.20
Formerly A 33.19
Formerly A 33.18
Formerly A 33.17
Formerly A 33.16
Formerly A 33.15
Deleted
Formerly A 32.13
Formerly A 32.12
Deleted
Formerly A 32.20
Formerly A 32.19
Formerly A 32.18
Formerly A 32.17
Formerly A 32.16
Formerly A 32.15
Formerly A 32.14
Formerly A 32.13
Details of changes
//
41
ERRATA
42
Q6
270
ME 2
Q4
Former Q 6
269
ME 2
Question/Answer
ME 2
Page
Question section
$1,460
$2,300
$2,580
$3,140
A
B
C
D
What is the adjusted bank balance per the cash book at 30 April 20X8?
Equity is a present obligation of the entity arising from past events, the settlement of which is expected
to result in an outflow from the entity of resources embodying economic benefit.
Equity is a resource controlled by an entity as a result of past events and from which future economic
benefits are expected to flow to the entity.
Equity is the residual interest in the assets of the entity after deducting all its liabilities.
Equity is increases in economic benefits during the accounting period in the form of inflows or
enhancements of assets or decreases of liabilities.
(2 marks)
A
B
C
D
Which of the following correctly defines equity according to the IASB's Conceptual Framework for Financial
Reporting?
New Question
(2 marks)
Your firm's cash book at 30 April 20X8 shows a balance at the bank of $2,490. Comparison with the bank
statement at the same date reveals the following differences:
$
Unpresented cheques
840
Bank charges not in cash book
50
Receipts not yet credited by the bank
470
Dishonoured cheque not in cash book
140
Deleted
New Question
Details of changes
270
273
274
283
ME 2
ME 2
ME 2
ME 2
Answers
Page
Question section
A4
Q 24
Q 19
Q7
Question/Answer
ERRATA
Relevance
Fair presentation
Consistency
Accruals
(2 marks)
Improved inventory control.

The refinancing of a long-term loan.
A reduction in payables.
An increase in payables.
A
B
C
D
IFRS Advisory Council

International Accounting Standards Board
The United Nations
B
C
D
Original cash book figure

Adjustment re charges
Adjustment re dishonoured cheque
IFRS interpretations Committee
2,490
(50)
(140)
2,300
43
(2 marks)
(2 marks)
A companys quick ratio has increased from 0.9:1 at 31 December 20X1 to 1.5:1 at 31 December 20X2.
Which of the following events could explain this increase?
A
B
C
D
//
Which of the following is a qualitative characteristic of financial information included in the IASBs Conceptual
framework for financial reporting?
Which body is responsible for issuing International Financial Reporting Standards?
19
Details of changes
44
Page
283
283
283
285
285
Question section
ME 2
ME 2
ME 2
ME 2
ME 2
A 21
A 19
A7
A6
A5
Question/Answer
$88,000
21
19
5,000
2,000
1,000
Installation
Delivery
Testing
88,000
80,000
Cost of machine
70,000 (70,000 2/20)
Carrying value at the end of year 5:
= $63,000
100,000 (100,000 3/10) = $70,000
Carrying value at the end of year 3:
$63,000.
The quick ratio does not include inventories or long term loans, so A and B will have no effect. An
increase in payables would reduce the quick ratio.
Quick ratio = current assets excluding inventories / current liabilities.
Relevance is a qualitative characteristic. The other options are accounting concepts.
A is the definition of a liability, B is the definition of an asset and D is the definition of income according
to the Conceptual framework.
Details of changes

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A list of ledger balances shown in debit and credit columns

D Providing reliable investment advice

Time Allocation changed from 34 to 39 minutes

We regret if these changes have caused any inconvenience.

We set out below the location and details of each change.

Errata sheet: November 2014

Practice & Revision Kit Pack (third edition, November 2013)

FIA FFA F3 Financial Accounting

FIA FFA F3 Financial Accounting

ERRATA // FIA FFA F3 Financial Accounting

New Question Formerly Q 1.16

A list of ledger balances shown in debit and credit columns

To facilitate the enforcement of a single set of global financial reporting standards

Financial statements always treat the business as a separate entity.

Total marks changed from 34 to 32

New Question Formerly 1.17

FIA FFA F3 Financial Accounting

ERRATA // FIA FFA F3 Financial Accounting

Accuracy, Faithful representation, Comparability, Verifiability, Timeliness and Understandability

By requiring authorisation in line with organisational policies

Time Allocation changed from 38 minutes to 43 minutes

Relevance, Faithful representation, Comparability, Verifiability, Timeliness and Understandability

Sales (including sales tax)

Total marks changed from 32 to 36

Cash purchases are recorded in the purchases day book.

4.18 Which of the following statements is/are TRUE or FALSE?

FIA FFA F3 Financial Accounting

ERRATA // FIA FFA F3 Financial Accounting

50 units purchased at a cost of $50 per unit

50 units held in opening inventory at a cost of $40 per unit

6.18 The information below relates to inventory item Z.

Assets in the form of materials or supplies to be consumed in the production process

Which one of the following statements correctly defines non-current assets?

A profit on disposal $5,500

To ensure the organisation is aware of the age of plant and machinery

FIA FFA F3 Financial Accounting

ERRATA // FIA FFA F3 Financial Accounting

Time Allocation changed from 36 minutes to 34 minutes

Total Marks changed from 24 to 26

To account for the risk associated with intangible assets

9.13 What is the purpose of amortisation?

Time allocation changed from 29 minutes to 31 minutes

3. Receivables represent money owed to the business.

2. Payables are an asset.

1. Payables represent money the business owes.

Time Allocation changed from 48 minutes to 50 minutes

Total Marks changed from 30 to 28

FIA FFA F3 Financial Accounting

ERRATA // FIA FFA F3 Financial Accounting

Allowance for receivables

Allowance for receivables

The separation of product and service delivery from payment

Time Allocation changed from 24 minutes to 26 minutes

Total Marks changed from 38 to 42

Improved convenience for the customer

FIA FFA F3 Financial Accounting

ERRATA // FIA FFA F3 Financial Accounting

All items relate to credit purchases.

PAYABLES LEDGER CONTROL ACCOUNT

Total Marks changed from 20 to 22

Control accounts help deter fraud.

14.5 The following information relates to a bank reconciliation.