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ACCA · Free Mock Test 11 of 250

Free ACCA Mock Test 1120 Questions + Full Answers

Association of Chartered Certified Accountants · Accountancy students · Exams: Mar, Jun, Sep, Dec

Sections: Financial Accounting · Applaa proprietary paper — free to download and print

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Applaa ACCA Mock Test 11

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Sample Questions — ACCA Mock 11

8 of 20 shown

Correct answers highlighted in green. Full explanations included.

1
Financial Accounting

A grocery distributor, Nexus Media plc, recorded net sales of £33,600 for standard-rate products (20% VAT) and £16,800 for zero-rated food products. What is the total output VAT generated on these sales?

  • A.£6,720
  • B.£10,080
  • C.£3,360
  • D.£0 (all food products are exempt from output VAT)

✓ Worked Explanation

Core Concept: Zero-Rated vs. Standard-Rated VAT Supplies In UK VAT, there are multiple categories of supply: standard-rated (20%), zero-rated (0%), reduced-rated (5%), and exempt. Both standard-rated and zero-rated are *taxable* supplies, but zero-rated generates £0 output VAT. Step-by-Step Resolution: 1. Standard-Rate Sales (£33,600): Output VAT = £33,600 × 20% = £6,720 2. Zero-Rate Sales (£16,800): Output VAT = £16,800 × 0% = £0 3. Total Output VAT = £6,720 + £0 = £6,720 Common Mistakes to A

2
Financial Accounting

The trial balance of Aura Goods Ltd balanced perfectly. However, it was later discovered that a purchase of equipment costing £9,600 was entered into the repairs and maintenance account. What type of error has occurred?

  • A.Error of Omission
  • B.Error of Commission
  • C.Error of Principle
  • D.Error of Reversal

✓ Worked Explanation

Core Concept: The Six Types of Accounting Errors There are six classic types of bookkeeping errors. Some cause the trial balance to disagree; others do not. This question tests recognition of errors that *hide* behind a balanced trial balance - meaning both sides are still equal, but the accounting treatment is fundamentally wrong. Step-by-Step Resolution: 1. Analyse the Error: Equipment (a non-current asset / capital expenditure) was posted to Repairs & Maintenance (a revenue expense accou

3
Financial Accounting

Before correcting the year-end errors, the draft profit of Solar Energy plc was £120,000. An error was discovered: Closing inventory was overstated by £6,000. What is the revised profit after correcting this error?

  • A.£126,000
  • B.£114,000
  • C.£120,000 (no effect on profit)
  • D.£108,000

✓ Worked Explanation

Core Concept: Impact of Inventory Errors on Profit The relationship between inventory and profit is one of the most important concepts in financial accounting. Closing inventory is deducted from Cost of Sales. If closing inventory is overstated, Cost of Sales is *understated*, which means Gross Profit is *overstated*. Correcting the overstatement increases COGS and reduces profit. Step-by-Step Resolution: 1. Recall the COGS Formula: Cost of Sales = Opening Inventory + Purchases Closing Invent

4
Financial Accounting

Nexus Media plc disposed of a delivery vehicle for £67,200. The vehicle had originally cost £112,000 and had accumulated depreciation of £56,000 at the date of disposal. What is the gain or loss on disposal to be recorded in profit or loss?

  • A.Gain on disposal of £11,200
  • B.Loss on disposal of £11,200
  • C.Gain on disposal of £-44,800
  • D.Loss on disposal of £56,000

✓ Worked Explanation

Core Concept: Profit or Loss on Disposal of a Non-Current Asset When a non-current asset is sold, the gain or loss is measured as Disposal Proceeds minus the Carrying Value (Net Book Value). It is *not* compared to the original cost. Only the written-down value at the disposal date is relevant. Step-by-Step Resolution: 1. Find the Carrying Value (NBV) at disposal date: NBV = Original Cost Accumulated Depreciation = £112,000 £56,000 = £56,000 2. Compare to Disposal Proceeds: £67,200 (rece

5
Financial Accounting

For the last quarter, Apex Trading Ltd had net credit sales of £48,000 (excluding VAT). Gross purchases inclusive of 20% VAT were £28,800. What is the net VAT amount payable to (or reclaimable from) the tax authority?

  • A.£4,800 Payable
  • B.£4,800 Reclaimable
  • C.£9,600 Payable
  • D.£3,840 Payable

✓ Worked Explanation

Core Concept: VAT Return - Output VAT vs. Input VAT A VAT-registered business acts as a tax collector for HMRC. It charges Output VAT on sales and reclaims Input VAT on purchases. The *net VAT payable* is the difference: Output VAT Input VAT. Step-by-Step Resolution: 1. Calculate Output VAT (tax charged to customers on sales): - Sales are NET (exc. VAT): £48,000 × 20% = £9,600 2. Calculate Input VAT (tax paid to suppliers on purchases): - Purchases are GROSS (inc. VAT): use VAT fraction

6
Financial Accounting

A retail store, Solar Energy plc, purchased inventories for a gross total of £4,200 inclusive of standard-rate VAT at 20%. What are the net purchase cost and the input VAT amount recoverable by Solar Energy plc?

  • A.Net Cost: £3,500, VAT Recoverable: £700
  • B.Net Cost: £4,200, VAT Recoverable: £840
  • C.Net Cost: £3,360, VAT Recoverable: £840
  • D.Net Cost: £3,500, VAT Recoverable: £0 (VAT is non-recoverable on inventories)

✓ Worked Explanation

Core Concept: Extracting VAT from a VAT-Inclusive (Gross) Price When a price is VAT-inclusive, you must use the VAT fraction to extract the tax element. You cannot simply multiply the gross price by 20% - that would over-calculate the VAT because you would be applying the rate to an amount that already contains VAT. Step-by-Step Resolution: 1. Identify the Problem: The gross (VAT-inclusive) price is £4,200. Standard rate VAT = 20%. 2. Apply the VAT Fraction: Net = Gross ÷ (1 + VAT rate) = £4,20

7
Financial Accounting

A retail store, Omega Foodstuffs plc, purchased inventories for a gross total of £1,800 inclusive of standard-rate VAT at 20%. What are the net purchase cost and the input VAT amount recoverable by Omega Foodstuffs plc?

  • A.Net Cost: £1,500, VAT Recoverable: £300
  • B.Net Cost: £1,800, VAT Recoverable: £360
  • C.Net Cost: £1,440, VAT Recoverable: £360
  • D.Net Cost: £1,500, VAT Recoverable: £0 (VAT is non-recoverable on inventories)

✓ Worked Explanation

Core Concept: Extracting VAT from a VAT-Inclusive (Gross) Price When a price is VAT-inclusive, you must use the VAT fraction to extract the tax element. You cannot simply multiply the gross price by 20% - that would over-calculate the VAT because you would be applying the rate to an amount that already contains VAT. Step-by-Step Resolution: 1. Identify the Problem: The gross (VAT-inclusive) price is £1,800. Standard rate VAT = 20%. 2. Apply the VAT Fraction: Net = Gross ÷ (1 + VAT rate) = £1,80

8
Financial Accounting

An entity purchased a machine on 1 January Year 1 for £75,000. The residual value of the machine is estimated to be £7,500 with an estimated useful life of 8 years. The entity uses the straight-line method of depreciation. What is the carrying value (net book value) of the machine on 31 December Year 2?

  • A.£66,563
  • B.£58,126
  • C.£50,626
  • D.£59,063

✓ Worked Explanation

Core Concept: Straight-Line Depreciation The straight-line method spreads the depreciable amount (Cost Residual Value) equally over the asset's useful life. The same charge is recognised in *every* period. After 2 complete years, two annual depreciation charges are deducted from the original cost. Step-by-Step Resolution: 1. Calculate Annual Depreciation: (Cost Residual Value) ÷ Useful Life = (£75,000 £7,500) ÷ 8 years = £8,437 per year 2. Calculate Accumulated Depreciation at 31 Dec Y

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Paper Info

Exam
ACCA
Mock number
11 of 250
Questions
20
Format
Multiple Choice (MCQ)
Sections
1
Audience
Accountancy students
Timing
Exams: Mar, Jun, Sep, Dec
Copyright
Applaa Proprietary

Sections Covered

  • Financial Accounting

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