Free ACCA Mock Test 20 — 20 Questions + Full Answers
Association of Chartered Certified Accountants · Accountancy students · Exams: Mar, Jun, Sep, Dec
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Applaa ACCA Mock Test 20
applaa-acca-mock-20.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 Solar Energy plc 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 Solar Energy plc'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 Solar Energ
A grocery distributor, Titan Steel plc, recorded net sales of £43,200 for standard-rate products (20% VAT) and £21,600 for zero-rated food products. What is the total output VAT generated on these sales?
- A.£8,640
- B.£12,960
- C.£4,320
- 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 (£43,200): Output VAT = £43,200 × 20% = £8,640 2. Zero-Rate Sales (£21,600): Output VAT = £21,600 × 0% = £0 3. Total Output VAT = £8,640 + £0 = £8,640 Common Mistakes to A
A retail store, Genesis Enterprises Ltd, purchased inventories for a gross total of £9,600 inclusive of standard-rate VAT at 20%. What are the net purchase cost and the input VAT amount recoverable by Genesis Enterprises Ltd?
- A.Net Cost: £8,000, VAT Recoverable: £1,600
- B.Net Cost: £9,600, VAT Recoverable: £1,920
- C.Net Cost: £7,680, VAT Recoverable: £1,920
- D.Net Cost: £8,000, 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 £9,600. Standard rate VAT = 20%. 2. Apply the VAT Fraction: Net = Gross ÷ (1 + VAT rate) = £9,60
An entity purchased a machine on 1 January Year 1 for £6,000. The residual value of the machine is estimated to be £600 with an estimated useful life of 15 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.£5,640
- B.£5,280
- C.£4,680
- D.£5,040
✓ 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 = (£6,000 £600) ÷ 15 years = £360 per year 2. Calculate Accumulated Depreciation at 31 Dec Year
Genesis Enterprises Ltd disposed of a delivery vehicle for £120,000. The vehicle had originally cost £200,000 and had accumulated depreciation of £100,000 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 £20,000
- B.Loss on disposal of £20,000
- C.Gain on disposal of £-80,000
- D.Loss on disposal of £100,000
✓ 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 = £200,000 £100,000 = £100,000 2. Compare to Disposal Proceeds: £120,000 (r
For the year ended 31 December, Falcon Engineering Ltd paid rent of £33,000. At the year-end, the company had an outstanding electricity invoice of £2,750 which has not yet been paid. What are the adjusting entries required at the year-end to record this accrual?
- A.Debit Accruals £2,750, Credit Electricity Expense £2,750
- B.Debit Electricity Expense £2,750, Credit Accruals (Liabilities) £2,750
- C.Debit Cash £2,750, Credit Electricity Expense £2,750
- D.Debit Electricity Expense £2,750, Credit Prepayments (Assets) £2,750
✓ 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 £2,750 was incurred during the accounting year but remains unpaid at year-end. 2. Apply the Accruals Concept: The expense belongs to this ye
Atlas Transport Ltd disposed of a delivery vehicle for £40,320. The vehicle had originally cost £67,200 and had accumulated depreciation of £33,600 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 £6,720
- B.Loss on disposal of £6,720
- C.Gain on disposal of £-26,880
- D.Loss on disposal of £33,600
✓ 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 = £67,200 £33,600 = £33,600 2. Compare to Disposal Proceeds: £40,320 (recei
The sole trader of Omega Foodstuffs plc took goods costing £1,800 from the business for personal use. These goods had a selling price of £2,700. What is the correct double entry to record this transaction?
- A.Debit Drawings £1,800, Credit Purchases £1,800
- B.Debit Drawings £2,700, Credit Revenue £2,700
- C.Debit Purchases £1,800, Credit Drawings £1,800
- D.Debit Inventory £1,800, Credit Drawings £1,800
✓ 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 £1,800 (cost) for personal use. This is a capital withdrawal. 2. Choose the Correct Value: Goods are recorded at cost (£1,800),
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Paper Info
- Exam
- ACCA
- Mock number
- 20 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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