Free ACCA Mock Test 171 — 20 Questions + Full Answers
Association of Chartered Certified Accountants · Accountancy students · Exams: Mar, Jun, Sep, Dec
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Applaa ACCA Mock Test 171
applaa-acca-mock-171.pdf · 20 questions
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8 of 20 shownCorrect answers highlighted in green. Full explanations included.
The Receivables Ledger Control Account of Nexus Media plc is shown in the diagram. Credit sales of £22,000 were recorded, and cash of £17,600 was received from credit customers. What is the correct closing balance (balance c/f) of the account?
- A.£15,400 Debit closing balance
- B.£15,400 Credit closing balance
- C.£33,000 Debit closing balance
- D.£17,600 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 £11,000 - money already owed by customers. 2. Credit Sales (+): New credit sales of £22,000 increase the amount owed,
Apex Trading Ltd disposed of a delivery vehicle for £86,400. The vehicle had originally cost £144,000 and had accumulated depreciation of £72,000 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 £14,400
- B.Loss on disposal of £14,400
- C.Gain on disposal of £-57,600
- D.Loss on disposal of £72,000
✓ 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 = £144,000 £72,000 = £72,000 2. Compare to Disposal Proceeds: £86,400 (rece
The sole trader of Meridian Distributors Ltd took goods costing £400 from the business for personal use. These goods had a selling price of £600. What is the correct double entry to record this transaction?
- A.Debit Drawings £400, Credit Purchases £400
- B.Debit Drawings £600, Credit Revenue £600
- C.Debit Purchases £400, Credit Drawings £400
- D.Debit Inventory £400, Credit Drawings £400
✓ 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 £400 (cost) for personal use. This is a capital withdrawal. 2. Choose the Correct Value: Goods are recorded at cost (£400), not
A grocery distributor, Summit Manufacturing Ltd, recorded net sales of £9,600 for standard-rate products (20% VAT) and £4,800 for zero-rated food products. What is the total output VAT generated on these sales?
- A.£1,920
- B.£2,880
- C.£960
- 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 (£9,600): Output VAT = £9,600 × 20% = £1,920 2. Zero-Rate Sales (£4,800): Output VAT = £4,800 × 0% = £0 3. Total Output VAT = £1,920 + £0 = £1,920 Common Mistakes to Avoid
A retail store, Vanguard Retail Ltd, purchased inventories for a gross total of £22,000 inclusive of standard-rate VAT at 20%. What are the net purchase cost and the input VAT amount recoverable by Vanguard Retail Ltd?
- A.Net Cost: £18,333, VAT Recoverable: £3,667
- B.Net Cost: £22,000, VAT Recoverable: £4,400
- C.Net Cost: £17,600, VAT Recoverable: £4,400
- D.Net Cost: £18,333, 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 £22,000. Standard rate VAT = 20%. 2. Apply the VAT Fraction: Net = Gross ÷ (1 + VAT rate) = £22,
Atlas Transport 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
For the year ended 31 December, Apex Trading Ltd paid rent of £12,600. At the year-end, the company had an outstanding electricity invoice of £1,050 which has not yet been paid. What are the adjusting entries required at the year-end to record this accrual?
- A.Debit Accruals £1,050, Credit Electricity Expense £1,050
- B.Debit Electricity Expense £1,050, Credit Accruals (Liabilities) £1,050
- C.Debit Cash £1,050, Credit Electricity Expense £1,050
- D.Debit Electricity Expense £1,050, Credit Prepayments (Assets) £1,050
✓ Worked Explanation
Core Concept: Accruals (Expenses Incurred but Not Yet Paid) Under the accruals concept (IAS 1), expenses must be recognised in the period they are *incurred*, not when they are *paid*. An accrual is a current liability - the business owes this amount but hasn't yet paid the invoice. Step-by-Step Resolution: 1. Identify the Issue: The electricity expense of £1,050 was incurred during the accounting year but remains unpaid at year-end. 2. Apply the Accruals Concept: The expense belongs to this ye
The Receivables Ledger Control Account of Atlas Transport Ltd is shown in the diagram. Credit sales of £1,800 were recorded, and cash of £1,440 was received from credit customers. What is the correct closing balance (balance c/f) of the account?
- A.£1,260 Debit closing balance
- B.£1,260 Credit closing balance
- C.£2,700 Debit closing balance
- D.£1,440 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 £900 - money already owed by customers. 2. Credit Sales (+): New credit sales of £1,800 increase the amount owed, so
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Paper Info
- Exam
- ACCA
- Mock number
- 171 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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