#241
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#242
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AM Finance
you may find my email from my profile here is not allowed to give email address
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#243
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1. A fluctuating capital account refers to a partner’s capital account which
is fixed for a specific period of time includes only those earnings and profits attributable to a partner includes both increases and reductions to a partner’s capital fluctuates according to the partner’s drawings fluctuates according to the partnership’s bank balance 2. The capital of a not-for-profit organization is defined as an Accumulated Fund because it refers to the total assets and liabilities invested by the organization’s founding members assets and liabilities invested by the organization’s current members assets and liabilities owned by the organization and made available to all membe subscriptions earned by the organization assets accumulated by the organization since its’ foundation 3. Donations received by a not-for-profit organization on behalf of another society are an expense in the Income and Expenditure account an income in the Income and Expenditure account included in the Balance Sheet as a Current Asset matched with donations paid and the balance shown as a Current Liability in the included in the Balance Sheet as a Current Liability 4. Profits earned from operating a bar in a not-for-profit organization are added to Current Assets in the Balance Sheet added to other expenditure in the Income and Expenditure account deducted from the Accumulated Fund in the Balance Sheet added to other income in the Income and Expenditure account added to Current Liabilities in the Balance Sheet 5. When calculating its’ closing stock at the end of May 2001, When calculating its’ closing stock at the end of May 2001, Bee Company decided to changes its’ method of stock valuation from a LIFO method to a Weighted Average Cost method of valuation. During this period of time the economy was subject to inflation. As a result of this change in method of stock valuation, the company’s closing stock valuation is now ouble what it was lower than before higher than before unchanged half the amount it was 6. Cash Sales of £200 were incorrectly entered on the credit side of the Cash account and on the debit side of the Sales account. When correcting the Sales account, one should: debit by £200 credit by £200 debit by £100 debit by £400 credit by £400 7. Upon dissolution of a partnership, the assets taken over by an individual partner are deducted from profits deducted from drawings deducted from capital added to capital added to profits 8. Where no formal or written partnership deed exists, the only condition applicable in a partnership is that profits and losses are shared according to partners’ capital balances nterest on capital at 5% is applicable drawings are limited to partners’ invested capital profits and losses are shared equally irrespective of partners’ capital balanc profits and losses are shared according to partners’ involvement within the pa 9. Which of the following mistakes may be termed to be an Error of Principle? £30 Stationery entered in the Motor Expenses account Motor Vehicles Expenses of £50 entered in the Motor Vehicles account Receipt of a cheque for £25 from H. Smith entered in Tom Smith’s account £100 Cash Purchases entered in the accounts as £1,000 Discounts Received of £75 entered in the Discounts Allowed account 10. Profits earned from competitions held by a not-for-profit organization are included in the annual final accounts under Income Expenditure Current Assets Current Liabilities Accumulated Fund 11. Which of the following accounting concepts is not used when drawing up the final accounts of a not-for-profit organization? prudence concept current cost concept consistency concept accruals concept going concern concept 12. A non-profit making society operates a bar open both to members and non-members. During 1997, the bar sold £10,000 worth of drinks, paid £5,000 to suppliers of bar stocks, and still owed another £1,000 to creditors for such stocks. Assuming no opening or closing stocks, the profit earned from the bar for 1997 amounts to £5,000 £6,000 £4,000 £9,000 £7,000 13. Which of the following statements does not represent a typical characteristic of the Average Price Method of valuing issues from stock? It is not a buying in price except by coincidence. It is less complicated to administer than other methods This method makes cost comparisons between jobs using similar materials easier t Product costs will tend to be based on current prices and will therefore be more With constantly fluctuating prices, this method tends to even out the price fluc 14. Which of the following sources of funds would not appear as Income in a not-for-profit organization’s Income and Expenditure Account? Subscriptions earned Donations received Profit from bar operations Cash proceeds from the disposal of office furniture Profit from annual dinner 15. Farout p.l.c. discovered that some of its’ stock had been damaged and were now unsaleable. This stock could however be sold for £110 as spares after repairs estimated at £40 had been carried out. Assuming the original cost was £200, this stock should now be valued in the accounts as: £110 £40 £200 £70 £160 16. Which of the following items would not represent a typical fund-raising activity held by a not-for-profit organization? Competitions Running a bar Sale of helmets and medals by the Old Military Club Nature appreciation exhibition by the Sunny Side Club Sale of excess bar stocks at reduced prices 17. During the financial year ended 30th September 2000, the Fenwick nature appreciation club held a number of nature appreciation activities, earning total fees of £5,700. Expenses incurred in organizing these activities amounted to £4,800. Assuming there were outstanding creditors for nature appreciation expenses of £500 at 30th September 2000, the profit made on nature appreciation activities amounts to £5,700 £4,800 £900 £500 £400 18. The junior accountant of Carlton Ltd erroneously overstates the Sales Journal total for the month of September 2001 by £300. The actual total for the month was £5,000. To correct this error, the accountant should debit the Sales Account by: £5,300 £300 £5,000 £4,700 £600 19. Which of the following costs represents a typical stockout cost in inventory control and management? Transportation costs Interest on capital invested in stocks Clerical costs of purchasing stocks Extra costs associated with urgent deliveries of stock Annual salary paid to storekeeper 20. A partner takes a motor vehicle valued at £7,200 from a partnership for his own private use at the beginning of February 2001. During the month of February 2001, whilst doing his private errands, he purchases stock for the partnership for £2,500 from his own private funds and subsequently claims total fuel expenses of £300 from the partnership for that month. His net drawings at the end of February 2001 are £7,200 £7,500 £2,800 £5,000 £4,700 |
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Saneela (Monday, July 07, 2014) |
#244
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1. Which one of the following qualitative characteristics of financial information can be described as a 'Threshold' quality?
Reliability Relevance Materiality Understandability 2. The 'going concern' concept assumes that: the business can continue in operational existence for the foreseeable future the business cannot continue in operational existence for the foreseeable future the business is continuing to be profitable the business is causing concern to investors 3. The format of published financial summaries within the European Union is decided by: the company itself the company's auditors stock exchange regulations European Union regulations 4. In the UK, the government's official registry of company information is called: Corporation House Business Information House Companies House Shareholders' House 5. To save printing and distribution costs, companies are allowed to send financial information to shareholders: only once every two years in an electronic version only if they ask for it only if the company is profitable 6. Which one of the following is not a valid reason for the disparity of international accounting procedures? The problems of translation from one language to another The nature of the country's legal system The relationship between taxation requirements and financial reporting requireme The relative strength of the accounting profession 7. Which one of the following factors has led to the development of strong, independent professional accountancy associations within specific countries? Predominantly small, family-run businesses Wide share ownership Banks owning majority of shares of large companies Communist governments 8. The body charged with the aim of harmonizing international accounting practice is: the Financial Harmony Council the International Accounting Goodwill Fellowship the International Financial Foundation. the International Accounting Standards Committee Foundation. 9. When developing international accounting standards, it is usual for an 'Exposure Draft' to be published. Which one of the following best describes an Exposure Draft? A preliminary version of the proposals, made available for public debate and fee The agreed version of an international accounting standard issued immediately pr The summary of feedback received following the publication of a new internationa A call to the general public to generate fresh ideas for new accounting standard 10. The status of International Accounting Standards (IASs) was given a significant boost in 2001 when which one of the following events occurred? The President of the United States endorsed IASs for American companies IASs received World Heritage Status from the United Nations The European Commission proposed that from 2005 listed companies throughout the IASs were made compulsory throughout Asia and Australasia |
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Saneela (Monday, July 07, 2014) |
#245
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1. If a business pays for only 11 months rent during a financial year, what accounting term is given to the outstanding one month's rent?
Repayment Prepayment Underpayment Accrual 2. A business started its financial period with 100 bicycles, then bought 600 bicycles during the period. The cost of 50 bicycles was owing to creditors at the end of the period. It sold 500 bicycles during the financial period, but customers have paid for only 400. Each bicycle was bought for £100 and sold for £150. What is the value of sales to be included in the firm's profit and loss account for the period? £75,000 £60,000 £105,000 £52,500 3. Using the information in question 2, what gross profit would be shown for the financial period? £75,000 £50,000 £25,000 £20,000 4. Using the information in question 2, what is the value of closing stock to be shown on the balance sheet? £45,000 £30,000 £15,000 £20,000 5. A business shows total debtors' balances of £400,000 in its sales ledger at the end of its financial period. One customer owing £40,000 is bankrupt, and there is no possibility of getting the debt paid. A further 2% of debtors are considered doubtful. What debtors' total will be included as a current asset in the balance sheet? £400,000 £352,800 £352,000 £36,200 6. Using the information in question 5, if there had been an existing provision for doubtful debts at the start of the financial year amounting to £8,000, what entry relating to doubtful debts would be shown in the profit and loss account? £800 decrease in provision £15,200 increase in provision £7,200 increase in provision No entry 7. A top dress designer misjudged the fashion market, and has an unsold stock of 100 silk dresses which normally sell for £500 each. They cost the business £200 each to make, but can now only be sold for £100 each (subject to incurring further material costs of £20 per dress). What is the valuation per dress for the purposes of the asset valuation in the balance sheet? £200 £500 £100 £80 8. To arrive at the gross profit of a trading business, which one of the following formulae is applied? Sales - (Opening Stock - Purchases - Closing Stock) Sales - (Opening Stock + Purchases + Closing Stock) Sales - (Opening Stock + Purchases - Closing Stock) Sales - (Opening Stock - Purchases + Closing Stock) 9. Which one of the following would be expected to favour 'partnership' as their preferred form of business organisation? An anti-social unmarried artist who is most contented when working for many mont Two electricians who are very worried about being sued for shoddy workmanship A very ambitious business person who wants access to large amounts of capital in Two solicitors who enjoy working together and are subject to strict professional 10. Share capital is: the way in which capital is divided at the end of each year. the way in which partners decide to divide profits and losses. another name for London's stock exchange. the way in which the ownership of a limited company is divided |
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Saneela (Monday, July 07, 2014) |
#246
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@ Muhammad Ahad.... Sir great knowledge for finance candidates. Wish some one could help like you for all branches.
Sent from my GT-I9500 |
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Muhammad Ahad (Sunday, July 06, 2014) |
#247
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1. A company issued a £10m 4% Bond on 1 January 2005, the start of its financial year. It paid the first half-year's interest on 1 July 2005, the second half-year on 1 January 2006. What will be the total of 'interest payable' to be shown in the profit and loss account to 31 December 2005? Income tax rates are currently 20%.
£160,000 £320,000 £200,000 £400,000 2. Which one of the following is an example of expenditure which, although included within the profit and loss account, might be disallowable for taxation purposes? Insurance for delivery vehicles Fuel for delivery vehicles Repairs to delivery vehicles Speeding fines relating to delivery vehicles 3. 'Accelerated capital allowances' refers to a situation when: government allowances used when calculating depreciation for tax purposes are mo government allowances used when calculating depreciation for tax purposes are le government allowances used when calculating depreciation for tax purposes are th the Government makes no taxation allowance for the purchase of assets. 4. A 'minority interest' exists when: a parent company owns all the shares in a subsidiary company. one company owns only 15% in another company. a parent company own less than 100% of the shares in a subsidiary company. an individual owns shares in a company which is the associate of another company 5. 'Minority Interests' must be split between: equity and non-equity interests minority and majority interests subsidiary and associated interests permanent and timing interests 6. Which one of the following is not part of a company's 'equity capital'? Ordinary shares Preference shares Voting shares Equity shares 7. Which one of the following is sometimes referred to as the 'bottom line' by financial commentators? Profit after interest and taxation Profit after interest but before taxation Profit before interest and taxation Retained profit for the year 8. The first dividend to be paid in a financial year is usually the: proposed final dividend of the current year interim dividend of the current year proposed final dividend of the previous year interim dividend of the previous year 9. In calculating basic earnings per share, which one of the following 'weighted average' figures is used in the formula? The number of ordinary shares outstanding during the period The number of ordinary shares outstanding since the company's formation The total number of shares outstanding during the period The authorised ordinary share capital during the period 10. In calculating basic earnings per share, net profit or loss is included in the formula after all but one of the following are deducted. Which one? Taxation Minority Interests Preference Dividends Ordinary dividends |
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Saneela (Monday, July 07, 2014) |
#248
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1. A company has, by the end of its financial period, paid out more Value Added Tax than it has received. How would this be shown in the balance sheet?
As an accrual As a debtor within current assets As a 'creditor due within one year' As a 'creditor due after more than one year' 2. A company has proposed a final equity dividend. Which one of the following events must happen before it can be paid? The Stock Exchange must agree to the dividend The chairman of the company must personally approve it The company's preference shareholders must approve it The shareholders must approve it at the AGM 3. If a loan is secured by a fixed charge, this means: the interest rate cannot change over the life of the loan. the lender can sell any of the assets of the company to repay the loan if the co the lender can only sell specific assets of the company to repay the loan if the the loan cannot be repaid by instalments but must be repaid in full at a fixed d 4. Another word meaning 'debenture' is: share bond equity reserve 5. Convertible loan stock can be converted to which one of the following? Cash Goods Shares Assets 6. In a defined contribution pension scheme, an employer pays: nothing, as all contributions are made by the employee. regular contributions which vary according to predicted future obligations under infrequent contributions based on changing future obligations under the scheme. regular contributions fixed as an amount or as a percentage of pay. 7. Contributions paid under a defined contribution pension scheme will be recognised within the: chairman's report. statement of total recognised gains and losses. profit and loss account. balance sheet. 8. Which one of the following material occurrences within the post balance sheet period would be classified as an adjusting post balance sheet event? A strike which is causing losses of £100,000 per week A debtor who owed £10,000 at the balance sheet date has 25% of the debt written Changes in foreign exchange rates one month after the balance sheet date have re A new branch is opened at a cost of £2m 9. Which one of the following material occurrences within the post balance sheet period would be classified as a non-adjusting post balance sheet event? A property revaluation showing a permanent fall in the balance sheet value The discovery that stock in the balance sheet had been undervalued The insolvency of a debtor whose debt had been recorded in the balance sheet An issue of shares 10. A post balance sheet period ends on: the date on which the board of directors approve the financial statements. the date on which the auditors approve the financial statements. the date on which the shareholders approve the financial statements. the date of the annual general meeting of the company |
#249
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1. Cash has been described as:
the lifebuoy of the business. the lifeboat of the business. he lifeline of the business. the lifeblood of the business. 2. The definition of cash as used in Cash Flow Statements includes: only cash balances. only bank balances. bank balances and bank overdrafts. cash in hand plus bank balances less bank overdrafts. 3. How can a profitable business fail? Because it can't pay its bills Because it has more current liabilities than current assets Because it has a bank overdraft Because it has too much cash 4. Which of the following is not a standard heading in a cash flow statement? Financing Taxation Equity dividends paid Current expenditure 5. The heading in a Cash Flow Statement 'Changes in Financing' means: the cash outflow due to loan interest payments being made. the cash flow from share and loan issues and repayments. cash dividends paid to shareholders. the change in the level of bank balances in the period 6. 'Equity dividends' shown in the cash flow statement will comprise: all company dividends paid during the year all dividends paid to voting shares in the year all dividends paid and proposed in the year relating to voting shares all proposed dividends in the year relating to voting shares 7. Depreciation is added back to profit when arriving at the cash flow from operating activities because: depreciation is only an estimated amount. depreciation does not affect profit. depreciation does not result in a flow of cash. depreciation only affects the balance sheet, not the profit and loss account 8. If net profit before taxation and interest was £95,000, depreciation for the year was £17,000, stock has decreased during the year by £7,000, debtors have increased by £11,000 and creditors have decreased by £4,000, what is the overall cash flow from operating activities? £104,000 £112,000 £98,000 £134,000 9. Payments under leasing contracts would be shown: in total within 'Returns on investments and servicing of finance' in total within 'Capital expenditure'. the capital element is shown within 'Acquisitions and disposals' and the interes the capital element is shown within 'and the interest element is shown within 'R 10. If a company has paid dividends on its preference shares, under which one of the cash flow statement headings would they appear? Returns on investments and servicing of finance Financing Equity dividends paid Capital investment and financial investment |
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Saneela (Monday, July 07, 2014) |
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