Free ACCA Mock Test 12 — 20 Questions + Full Answers
Association of Chartered Certified Accountants · Accountancy students · Exams: Mar, Jun, Sep, Dec
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Applaa ACCA Mock Test 12
applaa-acca-mock-12.pdf · 20 questions
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8 of 20 shownCorrect answers highlighted in green. Full explanations included.
Summit Manufacturing Ltd completed two projects during the year: 1) Purchased and installed a new warehouse conveyor belt system for £180,000, and 2) Had the exterior of the existing office block repainted for £18,000. How should these expenditures be classified?
- A.Both projects are Capital Expenditure.
- B.Warehouse system: Capital Expenditure (£180,000), Repainting: Revenue Expenditure (£18,000)
- C.Warehouse system: Revenue Expenditure (£180,000), Repainting: Capital Expenditure (£18,000)
- D.Both projects are Revenue Expenditure.
✓ Worked Explanation
Core Concept: Capital Expenditure vs. Revenue Expenditure Capital Expenditure (CapEx) creates or enhances a long-term non-current asset and is capitalised on the balance sheet, then depreciated over its useful life. Revenue Expenditure (RevEx) relates to day-to-day operations, maintenance, or restoration and is expensed immediately in profit or loss. Step-by-Step Resolution: 1. Warehouse Conveyor Belt System (£180,000): - This is a *new* asset installed to generate future economic benefits.
The Receivables Ledger Control Account of Atlas Transport Ltd is shown in the diagram. Credit sales of £14,000 were recorded, and cash of £11,200 was received from credit customers. What is the correct closing balance (balance c/f) of the account?
- A.£9,800 Debit closing balance
- B.£9,800 Credit closing balance
- C.£21,000 Debit closing balance
- D.£11,200 Credit closing balance
✓ Worked Explanation
Core Concept: Receivables Ledger Control Account The Receivables Ledger Control Account is an asset account that tracks money owed to the business by credit customers. As an asset, it follows the fundamental debit rule: increases are recorded on the debit side and decreases on the credit side. Step-by-Step Resolution: 1. Opening Balance: The account opens with a debit balance of £7,000 - money already owed by customers. 2. Credit Sales (+): New credit sales of £14,000 increase the amount owed,
The sole trader of Meridian Distributors Ltd took goods costing £2,700 from the business for personal use. These goods had a selling price of £4,050. What is the correct double entry to record this transaction?
- A.Debit Drawings £2,700, Credit Purchases £2,700
- B.Debit Drawings £4,050, Credit Revenue £4,050
- C.Debit Purchases £2,700, Credit Drawings £2,700
- D.Debit Inventory £2,700, Credit Drawings £2,700
✓ Worked Explanation
Core Concept: Owner's Drawings of Inventory at Cost When a sole trader takes goods from the business for personal use, this is treated as drawings - a withdrawal of capital by the owner. The key rule is that drawings of goods are always valued at cost price, never at selling price. Step-by-Step Resolution: 1. Identify the Economic Event: The owner has taken goods worth £2,700 (cost) for personal use. This is a capital withdrawal. 2. Choose the Correct Value: Goods are recorded at cost (£2,700),
Crown Paper Ltd disposed of a delivery vehicle for £5,760. The vehicle had originally cost £9,600 and had accumulated depreciation of £4,800 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 £960
- B.Loss on disposal of £960
- C.Gain on disposal of £-3,840
- D.Loss on disposal of £4,800
✓ 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 = £9,600 £4,800 = £4,800 2. Compare to Disposal Proceeds: £5,760 (received)
A suspense account was opened with a debit balance of £1,200. It was discovered that a cash receipt of £1,200 from a credit customer was credited to the cash account and credited to Receivables Control. What is the correcting journal entry to clear the suspense account?
- A.Debit Cash £2,400, Credit Suspense Account £2,400
- B.Debit Receivables Control £1,200, Credit Suspense £1,200
- C.Debit Suspense £2,400, Credit Cash £2,400
- D.Debit Cash £1,200, Credit Receivables Control £1,200
✓ Worked Explanation
Core Concept: Correcting Journal Entries via the Suspense Account When an error is identified, the correcting entry must: (1) reverse what was posted *incorrectly*, and (2) post what *should have been* posted. The suspense account is used to hold an unexplained balance while the error is investigated. Step-by-Step Resolution: 1. Understand the Original Error: Cash receipt of £1,200 from a customer was posted as: - Credit Cash £1,200 *(wrong - cash was RECEIVED, so it should be DEBITED)* -
Swift Logistics Ltd disposed of a delivery vehicle for £11,520. The vehicle had originally cost £19,200 and had accumulated depreciation of £9,600 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 £1,920
- B.Loss on disposal of £1,920
- C.Gain on disposal of £-7,680
- D.Loss on disposal of £9,600
✓ 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 = £19,200 £9,600 = £9,600 2. Compare to Disposal Proceeds: £11,520 (receive
Solar Energy plc completed two projects during the year: 1) Purchased and installed a new warehouse conveyor belt system for £12,000, and 2) Had the exterior of the existing office block repainted for £1,200. How should these expenditures be classified?
- A.Both projects are Capital Expenditure.
- B.Warehouse system: Capital Expenditure (£12,000), Repainting: Revenue Expenditure (£1,200)
- C.Warehouse system: Revenue Expenditure (£12,000), Repainting: Capital Expenditure (£1,200)
- D.Both projects are Revenue Expenditure.
✓ Worked Explanation
Core Concept: Capital Expenditure vs. Revenue Expenditure Capital Expenditure (CapEx) creates or enhances a long-term non-current asset and is capitalised on the balance sheet, then depreciated over its useful life. Revenue Expenditure (RevEx) relates to day-to-day operations, maintenance, or restoration and is expensed immediately in profit or loss. Step-by-Step Resolution: 1. Warehouse Conveyor Belt System (£12,000): - This is a *new* asset installed to generate future economic benefits. I
At 31 March, the bank statement of Alpha Properties Ltd shows a credit balance of £44,000. Unpresented checks total £11,000, and outstanding uncleared lodgements total £5,500. What is the reconciled balance that should appear in Alpha Properties Ltd's cash book?
- A.£38,500
- B.£49,500
- C.£60,500
- D.£27,500
✓ Worked Explanation
Core Concept: Bank Reconciliation Statement A bank reconciliation explains the difference between the *cash book balance* (company's records) and the *bank statement balance* (bank's records). Timing differences - unpresented cheques and uncleared lodgements - cause these differences. Step-by-Step Resolution: 1. Start with Bank Statement Balance: £44,000 (credit balance, meaning the bank shows this as a positive balance for the company). 2. Add Uncleared Lodgements: Deposits sent by Alpha Prope
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Paper Info
- Exam
- ACCA
- Mock number
- 12 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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