Free ACCA Mock Test 196 — 20 Questions + Full Answers
Association of Chartered Certified Accountants · Accountancy students · Exams: Mar, Jun, Sep, Dec
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Applaa ACCA Mock Test 196
applaa-acca-mock-196.pdf · 20 questions
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8 of 20 shownCorrect answers highlighted in green. Full explanations included.
At 31 March, the bank statement of Aura Goods Ltd shows a credit balance of £33,600. Unpresented checks total £8,400, and outstanding uncleared lodgements total £4,200. What is the reconciled balance that should appear in Aura Goods Ltd's cash book?
- A.£29,400
- B.£37,800
- C.£46,200
- D.£21,000
✓ 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: £33,600 (credit balance, meaning the bank shows this as a positive balance for the company). 2. Add Uncleared Lodgements: Deposits sent by Aura Goods
Summit Manufacturing Ltd disposed of a delivery vehicle for £23,040. The vehicle had originally cost £38,400 and had accumulated depreciation of £19,200 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 £3,840
- B.Loss on disposal of £3,840
- C.Gain on disposal of £-15,360
- D.Loss on disposal of £19,200
✓ 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 = £38,400 £19,200 = £19,200 2. Compare to Disposal Proceeds: £23,040 (recei
A bookkeeper at Aura Goods Ltd prepared a trial balance which failed to agree, with the credit side exceeding the debit side by £900. A suspense account was opened. Which of the following errors, when corrected, could explain this difference?
- A.A purchase invoice for £450 was completely omitted from the books.
- B.A cash payment of £450 to a supplier was debited to the purchases account but not credited to the cash account.
- C.Sales of £450 were recorded by debiting Receivables Control and debiting Sales Account.
- D.A purchase return of £450 was debited to the Purchase Returns account and credited to Receivables Control.
✓ Worked Explanation
Core Concept: Trial Balance Errors and the Suspense Account A trial balance fails to agree when a transaction is posted with unequal debits and credits. The difference is placed in a suspense account until the error is found and corrected. Errors that cause the trial balance to fail include: single-sided entries, casting errors, and transposition errors on one side only. Step-by-Step Resolution: 1. Analyse the Symptom: Credits exceed debits by £900. This means the debit side is £900 *too small*
The Receivables Ledger Control Account of Solar Energy plc is shown in the diagram. Credit sales of £5,400 were recorded, and cash of £4,320 was received from credit customers. What is the correct closing balance (balance c/f) of the account?
- A.£3,780 Debit closing balance
- B.£3,780 Credit closing balance
- C.£8,100 Debit closing balance
- D.£4,320 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 £2,700 - money already owed by customers. 2. Credit Sales (+): New credit sales of £5,400 increase the amount owed, s
Crest Hotels Ltd disposed of a delivery vehicle for £20,160. The vehicle had originally cost £33,600 and had accumulated depreciation of £16,800 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 £3,360
- B.Loss on disposal of £3,360
- C.Gain on disposal of £-13,440
- D.Loss on disposal of £16,800
✓ 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 = £33,600 £16,800 = £16,800 2. Compare to Disposal Proceeds: £20,160 (recei
Nexus Media plc completed two projects during the year: 1) Purchased and installed a new warehouse conveyor belt system for £250,000, and 2) Had the exterior of the existing office block repainted for £25,000. How should these expenditures be classified?
- A.Both projects are Capital Expenditure.
- B.Warehouse system: Capital Expenditure (£250,000), Repainting: Revenue Expenditure (£25,000)
- C.Warehouse system: Revenue Expenditure (£250,000), Repainting: Capital Expenditure (£25,000)
- 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 (£250,000): - This is a *new* asset installed to generate future economic benefits.
A grocery distributor, Summit Manufacturing Ltd, recorded net sales of £112,000 for standard-rate products (20% VAT) and £56,000 for zero-rated food products. What is the total output VAT generated on these sales?
- A.£22,400
- B.£33,600
- C.£11,200
- 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 (£112,000): Output VAT = £112,000 × 20% = £22,400 2. Zero-Rate Sales (£56,000): Output VAT = £56,000 × 0% = £0 3. Total Output VAT = £22,400 + £0 = £22,400 Common Mistakes
Swift Logistics Ltd completed two projects during the year: 1) Purchased and installed a new warehouse conveyor belt system for £42,000, and 2) Had the exterior of the existing office block repainted for £4,200. How should these expenditures be classified?
- A.Both projects are Capital Expenditure.
- B.Warehouse system: Capital Expenditure (£42,000), Repainting: Revenue Expenditure (£4,200)
- C.Warehouse system: Revenue Expenditure (£42,000), Repainting: Capital Expenditure (£4,200)
- 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 (£42,000): - This is a *new* asset installed to generate future economic benefits. I
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Paper Info
- Exam
- ACCA
- Mock number
- 196 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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