Free ACCA Mock Test 156 — 20 Questions + Full Answers
Association of Chartered Certified Accountants · Accountancy students · Exams: Mar, Jun, Sep, Dec
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Applaa ACCA Mock Test 156
applaa-acca-mock-156.pdf · 20 questions
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8 of 20 shownCorrect answers highlighted in green. Full explanations included.
The sole trader of Beacon Logistics LLP took goods costing £6,250 from the business for personal use. These goods had a selling price of £9,375. What is the correct double entry to record this transaction?
- A.Debit Drawings £6,250, Credit Purchases £6,250
- B.Debit Drawings £9,375, Credit Revenue £9,375
- C.Debit Purchases £6,250, Credit Drawings £6,250
- D.Debit Inventory £6,250, Credit Drawings £6,250
✓ 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 £6,250 (cost) for personal use. This is a capital withdrawal. 2. Choose the Correct Value: Goods are recorded at cost (£6,250),
Swift Logistics Ltd completed two projects during the year: 1) Purchased and installed a new warehouse conveyor belt system for £125,000, and 2) Had the exterior of the existing office block repainted for £12,500. How should these expenditures be classified?
- A.Both projects are Capital Expenditure.
- B.Warehouse system: Capital Expenditure (£125,000), Repainting: Revenue Expenditure (£12,500)
- C.Warehouse system: Revenue Expenditure (£125,000), Repainting: Capital Expenditure (£12,500)
- 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 (£125,000): - This is a *new* asset installed to generate future economic benefits.
At 31 March, the bank statement of Beacon Logistics LLP 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 Beacon Logistics LLP'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 Beacon Logi
Beacon Logistics LLP purchased a motor car for £150,000 inclusive of VAT, for use by a director. The car is used 60% for business travel and 40% for private travel. What is the input VAT recovery rule regarding this vehicle?
- A.Input VAT can be recovered in full (100%).
- B.Input VAT can be recovered at 60% representing the business use portion.
- C.No input VAT can be recovered because input VAT is generally blocked on passenger motor cars unless used exclusively for business (0% recovery).
- D.Input VAT can be recovered in full if the car is leased rather than purchased.
✓ Worked Explanation
Core Concept: Input VAT Block on Passenger Motor Cars Under HMRC VAT rules, input VAT on the purchase of a passenger motor car is subject to a 100% block - meaning it is entirely irrecoverable - unless the car is used *exclusively* for business purposes with no possibility of private use. Step-by-Step Resolution: 1. Identify the Asset: This is a passenger motor car (not a commercial vehicle like a van or lorry). 2. Apply the VAT Block Rule: If the car is available for any private use, input VAT
The sole trader of Summit Manufacturing Ltd took goods costing £600 from the business for personal use. These goods had a selling price of £900. What is the correct double entry to record this transaction?
- A.Debit Drawings £600, Credit Purchases £600
- B.Debit Drawings £900, Credit Revenue £900
- C.Debit Purchases £600, Credit Drawings £600
- D.Debit Inventory £600, Credit Drawings £600
✓ 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 £600 (cost) for personal use. This is a capital withdrawal. 2. Choose the Correct Value: Goods are recorded at cost (£600), not
The sole trader of Genesis Enterprises Ltd took goods costing £7,000 from the business for personal use. These goods had a selling price of £10,500. What is the correct double entry to record this transaction?
- A.Debit Drawings £7,000, Credit Purchases £7,000
- B.Debit Drawings £10,500, Credit Revenue £10,500
- C.Debit Purchases £7,000, Credit Drawings £7,000
- D.Debit Inventory £7,000, Credit Drawings £7,000
✓ 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 £7,000 (cost) for personal use. This is a capital withdrawal. 2. Choose the Correct Value: Goods are recorded at cost (£7,000),
The sole trader of Nova Tech Solutions Ltd took goods costing £6,250 from the business for personal use. These goods had a selling price of £9,375. What is the correct double entry to record this transaction?
- A.Debit Drawings £6,250, Credit Purchases £6,250
- B.Debit Drawings £9,375, Credit Revenue £9,375
- C.Debit Purchases £6,250, Credit Drawings £6,250
- D.Debit Inventory £6,250, Credit Drawings £6,250
✓ 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 £6,250 (cost) for personal use. This is a capital withdrawal. 2. Choose the Correct Value: Goods are recorded at cost (£6,250),
A grocery distributor, Omega Foodstuffs plc, recorded net sales of £132,000 for standard-rate products (20% VAT) and £66,000 for zero-rated food products. What is the total output VAT generated on these sales?
- A.£26,400
- B.£39,600
- C.£13,200
- 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 (£132,000): Output VAT = £132,000 × 20% = £26,400 2. Zero-Rate Sales (£66,000): Output VAT = £66,000 × 0% = £0 3. Total Output VAT = £26,400 + £0 = £26,400 Common Mistakes
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Paper Info
- Exam
- ACCA
- Mock number
- 156 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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