i CONTENT CONTENT i INTRODUCTION 1 1 Aim of this Practice & Revision for ACCA Introduction 2 2 Tackling the questions 2 2 1 Multiple choice questions 2 2 2 Compound questions 3 TOPIC 1 4 ACCA ORGANIZA[.]
CONTENT CONTENT i INTRODUCTION 1 Aim of this Practice & Revision for ACCA Introduction 2 Tackling the questions 2.1 Multiple choice questions 2.2 Compound questions TOPIC ACCA ORGANIZATION AND QUALIFICATIONS CHAPTER ACCA ORGANIZATION AND QUALIFICATIONS 1.1 Review and Revision 1.2 Practice questions TOPIC PRINCIPLE OF ACCOUNTING CHAPTER INTRODUCTION TO ACCOUNTING 2.1 Review and Revision 2.2 Practice questions CHAPTER 11 THE REGULATORY FRAMEWORK AND 11 THE FUNDAMENTAL BASES OF ACCOUNTING 11 3.1 Review and Revision 11 3.2 Practice questions 11 CHAPTER 17 ACCOUNTING SYSTEMS 17 4.1 Review and Revision 17 4.2 Practice questions 18 TOPIC 27 FINANCIAL ACCOUNTING 27 CHAPTER 27 i RECORDING TRANSACTIONS AND EVENTS 27 5.1 Review and Revision 27 5.2 Practice questions 28 CHAPTER 53 PREPARING A TRIAL BALANCE AND FINANCIAL STATEMENTS FOR SOLE TRADERS 53 6.1 Review and Revision 53 6.2 Practice questions 53 CHAPTER 67 FINANCIAL STATEMENTS FOR COMPANIES 67 7.1 Review and Revision 67 7.2 Practice questions 67 CHAPTER 84 CONSOLIDATED FINANCIAL STATEMENTS 84 8.1 Review and Revision 84 8.2 Practice questions: 84 REFERRENCE 91 ii INTRODUCTION In the current period, Vietnamese accounting is tending to approach international accounting, such as the application of IFRS in preparing the business’ financial statements Therefore, the provision of international financial accounting knowledge is necessary to help accounting students grasp the international accounting knowledge and have abilities to apply it in accounting practices ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants ACCA aims to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management ACCA provided multiple professional programs of qualifications in accounting and auditing inclusive FIA/CAT, ACCA certification The ACCA certification is considered to be one of the most prestigious qualifications in the world and helps in securing high-paid jobs in the world of finance and accounting In that trend, Faculty of Finance and Accounting - PTIT has introduced the ACCA Introduction subject with the content closely following the Financial Accounting - FA subject, knowledge module of fundamental level of ACCA certification The aim of Financial Accounting - FA is to develop knowledge and understanding of the underlying principles and concepts relating to financial accounting and technical proficiency in the use of double-entry accounting techniques including the preparation of basic financial statements This book is written to provide a full set of practical exercises which is accordance with the contents of ACCA Introduction subject provided by PTIT It will help lecturers and students get more convenient in studying this subject All the questions are referenced in FA Revision Kit published by BPP and closely similar to the Financial Accounting – FA examination Therefore, students then can attempt the FA exam which is organized by ACCA We hope that this book will be the useful material to make the learning process get more effective for students and other lecturers We also look forward to receiving any recommendations and suggestions to improve the quality of this book For further information, please contact: Faculty of Finance and Accounting Post and Telecommunication Institute of Technology Km 10, Nguyen Trai, Thanh Ha Dong, Ha Noi 1 Aim of this Practice & Revision for ACCA Introduction To provide the practice to help you succeed in the final examination by a thorough understanding in all areas covered by the syllabus and teaching guide Tackling the questions 2.1 Multiple choice questions The MCQs in the exam will contain four or five possible answers You have to choose the option that best answers the question The three or four incorrect options are called distracters There is a skill in answering MCQs quickly and correctly You may wish to follow the approach outlined below, or you may prefer to adapt it Step Skim read all the MCQs and identify which appear to be the easier questions Step Work out how long you should allocate to each MCQ bearing in mind the number of marks available Remember that the examiner will not expect you to spend an equal amount of time on each MCQ; some can be answered instantly but others will take time to work out Step Attempt each question – starting with the easier questions identified in Step Read the question thoroughly You may prefer to work out the answer before looking at the options, or you may prefer to look at the options at the beginning Adopt the method that works best for you Step Read the options and see if one matches your own answer Be careful with numerical questions, as the distracters are designed to match answers that incorporate common errors Check that your calculation is correct Have you followed the requirement exactly? Have you included every stage of the calculation? Step You may find that none of the options matches your answer x Re-read the question to ensure that you understand it and are answering the requirement x Eliminate any obviously wrong answers x Consider which of the remaining answers is the most likely to be correct and select that option Step If you are still unsure, continue to the next question Likewise if you are nowhere near working out which option is correct after a couple of minutes, leave the question and come back to it later Make a note of any questions for which you have submitted answers, but you need to return to later The computer will list any questions for which you have not submitted answers Step Revisit unanswered questions and other questions you're uncertain about When you come back to a question after a break, you often find you can answer it correctly straightaway If you are still unsure, have a guess You are not penalised for incorrect answers, so never leave a question unanswered! 2.2 Compound questions The compound question will contain a case study of one business entity You might have extracted information from business transactions in order to preparing the set of financial statements including the balance sheet, income statement, statement of retained earnings, and statement of cash flows You may wish to follow the approach outlined below, or you may prefer to adapt it Step Skim read the question and identify which issues have to be considered Step Note all the related information which used to prepare FSs You can use highlight pens to take notes easier Step Follow the steps to preparing the Financial statements, using all the knowledge to solve the issues which are identified You have to assure the format of each statements You still have mark for this one TOPIC ACCA ORGANIZATION AND QUALIFICATIONS CHAPTER ACCA ORGANIZATION AND QUALIFICATIONS 1.1 Review and Revision Founded in 1904, the Association of Chartered Certified Accountants (ACCA) is the global professional accounting body offering the Chartered Certified Accountant qualification (ACCA) ACCA's headquarters are in London with principal administrative office in Glasgow ACCA works through a network of over 104 offices and centres in 52 countries - with 323 Approved Learning Partners (ALP) and more than 7,300 Approved Employers worldwide, who provide employee development The ACCA qualification is structured in three modules, plus an Ethics and Professional Skills module and a Professional Experience Requirement (PER) The introduction to accounting regulatory and framework - Accounting standards were developed to try to address subjectivity - The IASB develops International Financial Reporting Standards (IFRSs) - The main objectives of the IFRS Foundation are to: + Develop a single set of high quality, understandable, enforceable and globally accepted international financial reporting standards (IFRSs) through its standardsetting body, the IASB + Promote the use and rigorous application of those standards + Bring about convergence of national accounting standards and IFRSs to high quality solutions 1.2 Practice questions Question : Choose the best answer for these questions below : Who issues International Financial Reporting Standards? A The IFRS Advisory Committee B The stock exchange C The International Accounting Standards Board D The government Which of the following statements is/are correct ? The IFRS Interpretations Committee is a forum for the International Accounting Standards Board (IASB) to consult with the outside world The IFRS Foudation produces IFRSs The IFRS Foudation is overseen by One of the objectives of the IFRS Foudation is to bring about convergence the IASB of national accounting standards and IFRSs A and only B ony C and only D only What is the role of the International Accounting Standards Board (IASB) ? A Oversee the standard setting and regulatory process B Formulate international financial reporting standards C Review defective accounts D Control the accountancy profession Which ONE of the following is NOT an objective of the IFRS Foudation ? A Through the International Acocunting Standards Board, develop a single set of slobally accepted International Financial Reporting Standards B Promote the use and rigorous application of International Financial Reporting Standards C Ensure IFRSs focus primarily on the needs of global, multi-national organisations D Bring about convergence of national accounting standards and IFRSs to high quality solutions Which ONE of the following statements correctly describes how International Financial Reporting Standards should be used? A To provide examples of the best financial reporting practice for national bodies who develop their own requirements B To ensure high ethical standards are maintained by financial reporting professionals international C To facilitate the enforcement of a single set of global financial reporting standards D To prevent national bodies from developing their own financial reporting standards Question 2: Give the explanation for these questions below: What is the ACCA qualification? How many modules are in ACCA qualification? What is the objective of the IFRS Foundation? What is the main purpose of IFRSs? 10 What are the advantages of studying ACCA qualification? TOPIC PRINCIPLE OF ACCOUNTING CHAPTER INTRODUCTION TO ACCOUNTING 2.1 Review and Revision - Financial reporting is a way of recording, analyzing and summarizing financial data - For – profit entities of whatever size or nature exist to make a profit - Profit is the excess of income over expenditure whereas Loss is the excess of expenditure over revenue - There are types of business entity: + Sole trader is a business owned and run by one individual, perhaps employing one or two assistants and controlling their work + Partnerships are arrangements between individuals to carry on business in common with a view to profit + Limited liability status means that the business’s debts and the personal debts of the business’s owners (shareholders) are legally separate - There are various groups of people who need information about the activities of a business They are internal and external users Those charged with governance of a company are responsible for the preparation of the financial statement - The main elements of financial statements: + Statement of financial position is simply a list os all the assets and all the liabilities owed by a business at a particular date Equity is the residual interest in the assets of the entity after deducting all its liabilities + Statement of profit or loss is a record of income generated and expenses incurred over a given period 2.2 Practice questions Choose the best answer for these questions below: Which group of people are most likely to be interested in the financial statements of a sole trader? (1) Shareholders of the company (2) The business’s bank manager (3) The tax authoritires (4) Financial analysts A and only B and only C 2,3 and only D 1,2, and only A supplier of goods on credit is interested only in the statement of financial position, ie an indication of the current state of affairs Is this statement TRUE or FALSE? Which of the following are advantages of trading as a limited liability company? (1) Operating as a limited liability company makes raising finance easier because additional shares can be issued to raise additional cash (2) Operating as a limited liability company is more risky than operating as a sole trader because the shareholders of a business are liable for all the debts of the business whereas the sole trader is only liable for the debts up to the amount he has received A only B only C Both and D Neither or A trade receivable is an example of: A An asset B A liability C Income D Expense A loan of $30,000 from a bank, repayable in three years’ time, is: A A current liability B A non-current liability C A current asset D A non-current asset International accounting standards are written primarily with regard to the information needs of which type of users? A Managers B Employees C The government and government agencies D Investors Some of the content of the financial statements of companies might be specified by national company law Is this statement TRUE or FALSE? Which of the following items are items of capital expenditure? (1) Company repairs (2) Purchases of a property (3) Short term hire of machinery A (1) and (2) only B (1) and (3) only C (2) only D (3) only Which of the following items are items of capital expenditure? (1) The cost of re-decorating offices (2) (3) Purchase of additional machinery Construction of an extension to the Head Office building A (1) and (2) only B (1) and (3) only C (2) and (3) D (3) only 10 Which one of the following is NOT an aspect of the reliability of financial information? A Fair representation B Substance over form C Neutrality D Completeness 11 If there is undue delay in reporting financial information, the information might lose its: A Relevance B Reliability C Consistency D Prudence 12 Which ONE of the following statements correctly describes the contents of the Statement of Financial Position? A A list of ledger balances shown in debit and credit columns B A list of all the assets owned and all the liabilities owed by a business C A record of income generated and expenditure incurred over a given period D A record of the amount of cash generated and used by a company in a given period 13 Which ONE of the following statements correctly describes the contents of the Statement of Profit or Loss? A A list of ledger balances shown in debit and credit columns B A list of all the assets owned and all the liabilities owed by a business C A record of income generated and expenditure incurred over a given period D A record of the amount of cash generated and used by a company in a given period ... are books in which we first record transactions They are: + Sales day book + Purchase day book + Sales returns day book + Purchases returns day book + Journal + Cash book + Petty cash book - Entries... Technology Km 10, Nguyen Trai, Thanh Ha Dong, Ha Noi 1 Aim of this Practice & Revision for ACCA Introduction To provide the practice to help you succeed in the final examination by a thorough... it in accounting practices ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants ACCA aims to offer business-relevant, first-choice qualifications