http://freeaccastudymaterial.blogspot.com/ co m/ log sp o t l.b tud ACCA Approved Practice & Revision Kit Look inside cc as Paper F7 Financial Reporting Practice & Revision Kit for exams up to June 2015 Free access to our Exam Success site ea BPP House 142-144 Uxbridge Road London W12 8AA United Kingdom T 0845 075 1100 (UK) T +44 (0)20 8740 2211 (Overseas) E Learningmedia@bpp.com bpp.com/learningmedia For exams up to June 2015 Contact us ym ate • Banks of questions on every syllabus area • Answers with detailed guidance on approaching questions • Three mock exams with full answers and guidance ria One of a suite of products supporting Paper F7 Financial Reporting, for use independently or as part of a package, this Kit is targeted at ACCA’s exams up to June 2015 and contains: Practice & Revision Kit Paper F7 Financial Reporting This Kit provides material specifically for the practice and revision stage of your studies for Paper F7 Financial Reporting that has been comprehensively reviewed by the ACCA examining team This unique review ensures that the questions, solutions and guidance provide the best and most effective resource for practising and revising for the exam Financial Reporting BPP Learning Media is dedicated to supporting aspiring business professionals with top-quality learning material as they study for demanding professional exams, often whilst working full time BPP Learning Media’s commitment to student success is shown by our record of quality, innovation and market leadership in paper-based and e-learning materials BPP Learning Media’s study materials are written by professionally qualified specialists who know from personal experience the importance of top-quality materials for exam success ACCA F7 ACCA approved content provider ACCA APPROVED CONTENT PROVIDER htt p:/ /fr e June 2014 £18.00 http://freeaccastudymaterial.blogspot.com/ ACF7(INT)RK14.indd 1-3 11/06/2014 11:00 co m/ http://freeaccastudymaterial.blogspot.com/ log sp o t P R A C T I C E l.b PAPER F7 ym ate ria FINANCIAL REPORTING tud BPP Learning Media is an ACCA Approved Learning Partner – content for the ACCA qualification This means we work closely with ACCA to ensure our products fully prepare you for your ACCA exams as In this Practice and Revision Kit which is has been reviewed by the ACCA examination team, we: Discuss the best strategies for revising and taking your ACCA exams Ensure you are well prepared for your exam Provide you with lots of great guidance on tackling questions Provide you with three mock exams Provide ACCA exam answers as well as our own for selected questions ea cc htt p:/ /fr e Our Passcard and i-Pass products also support this paper FOR EXAMS UP TO JUNE 2015 http://freeaccastudymaterial.blogspot.com/ & R E V I S I O N K I T log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ l.b First edition 2008 Eighth edition June 2014 ria ISBN 9781 4727 1103 (previous ISBN 9781 4453 7996 8) ate e-ISBN 9781 4727 1167 BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the practice answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated as www.bpp.com/learningmedia tud Published by Printed in Singapore by All our rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd ym British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ea cc Ho Printing 31 Changi South Street Changi South Industrial Estate Singapore 486769 htt p:/ /fr e Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable sustainable sources © BPP Learning Media Ltd 2014 ii http://freeaccastudymaterial.blogspot.com/ co m/ http://freeaccastudymaterial.blogspot.com/ Contents Page log sp o t Finding questions Question index v Helping you with your revision ix Revising F7 Topics to revise x Question practice x Passing the F7 exam xi Exam information xii l.b Questions and answers ria Questions Answers 97 Exam practice ate Mock exam Questions 217 Plan of attack .227 Answers .228 ym Mock exam Questions 241 Plan of attack .255 Answers .256 tud Mock exam (Specimen paper) Questions 269 Plan of attack .281 Answers .282 htt p:/ /fr e ea cc Review form as ACCA examiner's answers Specimen paper 293 iii http://freeaccastudymaterial.blogspot.com/ co m/ http://freeaccastudymaterial.blogspot.com/ A note about copyright Dear Customer log sp o t What does the little © mean and why does it matter? Your market-leading BPP books, course materials and e-learning materials not write and update themselves People write them: on their own behalf or as employees of an organisation that invests in this activity Copyright law protects their livelihoods It does so by creating rights over the use of the content Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a serious breach of professional ethics Photocopying our materials is a breach of copyright Scanning, ripcasting or conversion of our digital materials into different file formats, uploading them to Facebook or emailing them to your friends is a breach of copyright ria l.b With current technology, things might seem a bit hazy but, basically, without the express permission of BPP Learning Media: ate You can, of course, sell your books, in the form in which you have bought them – once you have finished with them (Is this fair to your fellow students? We update for a reason.) Please note the e-products are sold on a single user licence basis: we not supply ‘unlock’ codes to people who have bought them second-hand htt p:/ /fr e ea cc as tud ym And what about outside the UK? BPP Learning Media strives to make our materials available at prices students can afford by local printing arrangements, pricing policies and partnerships which are clearly listed on our website A tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting organisations that If they act illegally and unethically in one area, can you really trust them? iv http://freeaccastudymaterial.blogspot.com/ Question index The headings in this checklist/index indicate the main topics of questions, but many questions cover several different topics Each topic area begins with MCQs on the topic Your exam will have 20 MCQs Examiner's answers For the Mock exam the examiner's answers can be found at the end of this Kit Page number log sp o t Time co m/ http://freeaccastudymaterial.blogspot.com/ Marks allocation Mins Question Answer MCQs – conceptual framework 10 18 97 Lisbon (pilot paper amended) 15 27 97 Concepts (6/08 amended) 15 27 98 Part 2: The regulatory framework MCQs – regulatory framework 11 100 27 100 27 101 10 18 103 – – 103 – – 105 30 54 10 108 30 54 12 111 30 54 13 114 20 36 15 119 Baxen (6/12 amended) 15 15 MCQs – presentation of published financial statements Preparation question: Candel (12/08) Preparation question: Dexon ym ate Part 3: Presentation of published financial statements ria Regulatory framework (2.5 12/04 amended) 10 Highwood (6/11 amended) 11 Keystone (12/11 amended) Part 4: Non-current assets 13 MCQs – non-current assets – – 17 120 15 27 18 121 15 27 18 122 14 20 125 18 Emerald (12/07 amended) 15 27 20 125 19 Dexterity (2.5 6/04 amended) 15 27 21 127 20 Darby (12/09) 15 27 22 128 15 Dearing (12/08 amended) cc 16 Flightline (6/09 amended) as 14 Preparation question: Plethora plc tud 12 Fresco (6/12 amended) l.b Part 1: The conceptual framework Part 5: Intangible assets htt p:/ /fr e ea 17 MCQs – intangible assets Finding questions http://freeaccastudymaterial.blogspot.com/ v Time co m/ http://freeaccastudymaterial.blogspot.com/ Page number Marks allocation Mins Question Answer 21 MCQs – impairment of assets 12 22 23 130 22 Telepath (6/12) 15 27 24 131 14 26 133 – 26 133 27 27 134 27 28 136 18 29 138 – 30 138 – 30 138 12 22 32 141 – – 33 142 30 54 34 142 33 MCQs – consolidated statement of profit or loss and OCI 14 36 146 34 Preparation question: Acquisition during the year – – 37 146 log sp o t Part 6: Impairment of assets Part 7: Reporting financial performance 23 MCQs – reporting financial performance 24 Preparation question: Partway (2.5 12/06 amended) – 25 Tunshill (12/10) 15 26 Manco (12/10 amended) 15 10 28 Preparation question: Group financial statements – 29 Preparation question with helping hands: Simple consolidation – 30 MCQs – consolidated statement of financial position 31 Preparation question: Goodwill ym 32 Pedantic (12/08 amended) ate Part 9: Consolidated statement of financial position ria 27 MCQs – introduction to groups l.b Part 8: Introduction to groups tud Part 10: Consolidated statement of profit or loss and other comprehensive income – – 38 148 36 Viagem (12/12 amended) 15 27 39 151 30 54 40 152 38 MCQs – accounting for associates 10 18 43 156 39 Preparation question: Laurel – – 44 156 40 Preparation question: Tyson – – 47 158 41 Preparation question: Plateau (12/07 amended) – – 48 159 42 Paladin (12/11 amended) 30 54 50 162 37 Prodigal (6/11 amended) as 35 Preparation question: Pandar (12/09 amended) htt p:/ /fr e ea cc Part 11: Accounting for associates vi Finding questions http://freeaccastudymaterial.blogspot.com/ Time Page number Marks allocation Mins Question Answer 18 32 52 165 14 54 166 27 55 166 27 55 167 27 56 169 14 57 170 27 58 171 20 18 59 173 – – 61 174 – – 62 175 log sp o t Part 12: Inventories and biological assets 43 MCQs –inventories and biological assets 44 MCQs – provisions, contingent liabilities and contingent assets 45 Promoil (12/08) 15 46 Borough (12/11) 15 47 Shawler (12/12 amended) 15 Part 14: Financial instruments 49 Bertrand (12/11 amended) 15 ria 48 MCQs – financial instruments l.b Part 13: Provisions, contingent liabilities and contingent assets 50 MCQs - revenue 51 Preparation question: Derringdo 52 Preparation question: Contract 53 Preparation question: Beetie (pilot paper amended) ym 54 Mocca (6/11 amended) ate Part 15: Revenue 55 Wardle (6/10 amended) 56 MCQs - leasing 57 Preparation question: Branch tud Part 16: Leasing co m/ http://freeaccastudymaterial.blogspot.com/ – – 63 176 15 27 63 178 15 27 64 179 10 18 65 181 – – 66 182 15 27 66 183 59 MCQs – accounting for taxation 10 18 67 185 60 Preparation question: Julian – – 68 186 – – 69 186 10 18 70 188 58 Fino (12/07 amended) cc as Part 17: Accounting for taxation 61 Preparation question: Bowtock ea Part 18: Earnings per share 62 MCQs – earnings per share – – 71 189 64 Barstead (12/09 amended) 15 27 72 190 65 Rebound (6/11 amended) 15 27 72 192 htt p:/ /fr e 63 Preparation question: Fenton Finding questions http://freeaccastudymaterial.blogspot.com/ vii Time Marks allocation Mins 66 MCQs – analysing and interpreting financial statements 12 67 Preparation question: Victular (12/08) – 68 Bengal (6/11 amended) 15 Page number Question Answer log sp o t Part 19: Analysing and interpreting financial statements co m/ http://freeaccastudymaterial.blogspot.com/ 22 74 194 – 75 194 27 77 196 25 79 198 27 80 198 27 81 199 14 83 201 – – 84 202 30 54 87 205 10 18 89 209 – – 90 209 15 27 91 210 78 MCQs – specialised, not-for-profit and public sector entities 10 18 92 211 79 Preparation question: Appraisal – – 93 212 69 MCQs – limitations of FSs and interpretation techniques 14 70 Waxwork (6/09) 15 71 Quartile (12/12 amended) 15 ria Part 21: Statement of cash flows l.b Part 20: Limitations of financial statements and interpretation techniques 72 MCQs – statement of cash flows 73 Preparation question: Dickson Part 22: Alternative models and practices 76 Preparation question: Changing prices 77 Update (2.5 6/03 part amended) ym 75 MCQs – alternative models and practices ate 74 Mocha (12/11) as Mock exam cc Mock exam tud Part 23: Specialised not-for-profit and public sector entities htt p:/ /fr e ea Mock exam (Specimen paper) viii Finding questions http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Helping you with your revision BPP Learning Media – Approved Learning Partner – content Tackling revision and the exam Using feedback obtained from ACCA exam team review: log sp o t As ACCA’s Approved Learning Partner – content, BPP Learning Media gives you the opportunity to use exam team–reviewed revision materials By incorporating the examination team’s comments and suggestions regarding syllabus coverage, the BPP Learning Media Practice and Revision Kit provides excellent, ACCA-approved support for your revision We look at the dos and don’ts of revising for, and taking, ACCA exams We focus on Paper F7; we discuss revising the syllabus, what to (and what not to do) in the exam, how to approach different types of question and ways of obtaining easy marks l.b Selecting questions We provide a full question index to help you plan your revision ria Making the most of question practice ate At BPP Learning Media we realise that you need more than just questions and model answers to get the most from your question practice Our top tips included for certain questions provide essential advice on tackling questions, presenting answers and the key points that answers need to include We show you how you can pick up easy marks on some questions, as we know that picking up all readily available marks often can make the difference between passing and failing We include marking guides to show you what the examiner rewards We include comments from the examiners to show you where students struggled or performed well in the actual exam We refer to the 2014 BPP Study Text (for exams up to June 2015) for detailed coverage of the topics covered in questions In a bank at the end of this Kit we include the official ACCA answers to the Specimen paper Used in conjunction with our answers they provide an indication of all possible points that could be made, issues that could be covered and approaches to adopt as tud ym cc Attempting mock exams htt p:/ /fr e ea There are three mock exams that provide practice at coping with the pressures of the exam day We strongly recommend that you attempt them under exam conditions Mock exams and reflect the question styles and syllabus coverage of the exam; Mock exam is the Specimen paper Revising F7 http://freeaccastudymaterial.blogspot.com/ ix htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ Name: co m/ Review Form – Paper F7 Financial Reporting (6/14) Address: How have you used this Kit? (Tick one box only) log sp o t During the past six months you recall seeing/receiving any of the following? (Tick as many boxes as are relevant) Home study (book only) Our advertisement in Student Accountant On a course: college Our advertisement in Pass With 'correspondence' package Our advertisement in PQ Other Our brochure with a letter through the post Why did you decide to purchase this Kit? (Tick one box only) Our website www.bpp.com Have used other BPP products in the past Which (if any) aspects of our advertising you find useful? (Tick as many boxes as are relevant) Recommendation by friend/colleague Prices and publication dates of new editions Recommendation by a lecturer at college Information on product content Saw advertising Facility to order books off-the-page Other None of the above Kit ria ate Which BPP products have you used? Text l.b Have used the complementary Study text i-Pass Home Study Package ym Passcards cc as Passing ACCA exams Passing F7 Questions Top Tips etc in answers Content and structure of answers ‘Plan of attack' in mock exams Mock exam answers tud Your ratings, comments and suggestions would be appreciated on the following areas Overall opinion of this Kit Excellent ea Do you intend to continue using BPP products? Very useful Useful Not useful Good Adequate Yes No Poor htt p:/ /fr e Please return this form to: Pippa Riley, ACCA Range Manager, BPP Learning Media Ltd, FREEPOST, London, W12 8AA http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Review Form (continued) TELL US WHAT YOU THINK htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t Please note any further comments and suggestions/errors below http://freeaccastudymaterial.blogspot.com/ ... paper Revising F7 http://freeaccastudymaterial.blogspot.com/ ix http://freeaccastudymaterial.blogspot.com/ co m/ Revising F7 Topics to revise log sp o t From December 2014 the F7 paper has a... p:/ /fr e ea Mock exam (Specimen paper) viii Finding questions http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Helping you with your revision BPP Learning... don’t know x Revising F7 http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Passing the F7 exam If you have honestly done your revision then you can pass