FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q1. Kevin operates his petty cash with an imprest of $120. At the end of one particular week he had
vouchers in the petty cash tin of $17.45, $32.16 and $21.94.

In order to restore the petty cash balance what transaction should Kevin make?

A. Dr Petty cash $48.45 Cr Bank $48.45

B. Dr Petty cash $71.55 Cr Bank $71.55
C. Dr Bank $71.55 Cr Petty cash $71.55
D. Dr Bank $48.45 Cr Petty cash $48.45

Q2. The following statements relate to the trade payables control account:

(1) It is used to record transactions with credit customers

(2) Amounts posted to it are not part of the double entry system of accounting

Which of the above statements are correct?

A. Neither statement
B. Statement 2 only
C. Statement 1 only
D. Both statements

Q3. Simon was owed $496.70 from Trevor. He subsequently found out that Trevor had gone
bankrupt and could not pay. He therefore wanted to write off Trevor's debt.
What would be the correct double entry to write off Trevor's debt?

A. Dr Receivables $496.70 Cr Irrecoverable debts $496.70

B. Dr Irrecoverable debts $496.70 Cr Receivables $496.70
C. Dr Receivables $496.70 Cr Sales $496.70
D. Dr Sales $496.70 Cr Receivables $496.70

Q4. The trade receivables control account has a balance of $4,214. The total on the list of individual
customer balances is $4,890.

Which of the following would explain the difference?

A. A contra with the payables ledger for $676 has been accounted for in the list of customer
balances but not accounted for in the control account

B. An irrecoverable debt of $676 has been written off a customer's individual account but has not
yet been written off the control account

C. A customer owing $676 has been omitted from the list of customer balances

D. The sales day book is understated by $676

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q5. Dorien owns a shop and rents out the flat above the shop.

What is the correct double entry to account for the rent she receives?

A. Dr Sales Cr Cash
B. Dr Cash Cr Rental income
C. Dr Cash Cr Sales
D. Dr Rental income Cr Cash

Q6. Brian issues a document to a customer indicating that the amount owed is being reduced for
sales returns. What is this document?

A. Debit note
B. Credit note
C. Advice note
D. Delivery note

Q7. Desmond is performing a control account reconciliation between the trade payables control
account and the list of suppliers' balances. He finds that a purchase day book total has been understated
by $3,000.

Where will the error need to be corrected to ensure the two balances reconcile?

A. List of suppliers' balances only

B. Control account only
C. Neither the control account nor the list of suppliers' balances
D. Both the control account and the list of suppliers' balance

Q8. The balance on the trade payables control account should be equal to which other figure in the
accounting system?

A. The balance on the trade receivables control account reconciled for items in transit
B. The balance on the trade receivables control account
C. The total of the balances on the individual suppliers' accounts
D. The total of the balances on the individual customers' accounts

Q9. Which of the following accounts would show a credit balance?

Account 1: Total Dr $400 Total Cr $200

Account 2: Total Dr $200 Total Cr $100
Account 3: Total Dr $300 Total Cr $300
Account 4: Total Dr $200 Total Cr $300

A. Account 4 only
B. Accounts 2 and 3
C. Accounts 3 and 4
D. Accounts 1 and 2

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q10. Which of the following should be reported in the statement of profit or loss?

A. Receivables
B. Revenue
C. Payables
D. Non-current assets

Q11. Warren is a window cleaner. He cleaned Millie's windows and she paid him $10 in cash.
What kind of transaction is this?

A. Purchase of goods by Warren

B. Purchase of a service by Millie
C. Sale of a service by Millie
D. Sale of goods by Warren

Q12. Which of the following would be classified as revenue expenditure?

(1) Rental income

(2) Purchase of machine
(3) Purchase of goods for resale
(4) Employees' wages

A. 3 and 4
B. 2 and 4
C. 1 and 3
D. 1 and 2

Q13. In error Tarik posted goods he purchased for his own use into the business purchases account.
Which of the following journals will correct this error?

A. Dr Drawings Cr Purchases
B. Dr Sales Cr Drawings
C. Dr Purchases Cr Drawings
D. Dr Drawings Cr Sales

Q14. Arthur sold goods to Meabh for $5,400. He subsequently realised he has overcharged Meabh by
$200. Which of the following documents would Arthur issue to correct this overcharge?

A. Credit note
B. Debit note
C. Invoice
D. Remittance advice

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q15. When the trial balance was prepared the following two ledger accounts were omitted and a
suspense account had to be created to make it balance:
$
Discounts allowed 5,780
Discounts received 4,920
What was the balance on the suspense account?

A. $860 Dr
B. $10,700 Dr
C. $860 Cr
D. $10,700 Cr

Q16. What is the correct double entry to write off an irrecoverable receivables balance?

A. Dr Irrecoverable debt expense Cr Trade payables

B. Dr Irrecoverable debt expense Cr Trade receivables
C. Dr Trade payables Cr Irrecoverable debt expense
D. Dr Trade receivables Cr Irrecoverable debt expense

Q17. Fatima has made an error in posting a sales return from the sales returns day book to the
general ledger. Which book of prime entry should be used to record the correction of the error?

A. Journal
B. Sales return day book
C. Sales day book
D. General ledger

Q18. The following extract of account codes is taken from a business's accounting manual:

Current assets (account numbers 20000 to 25999)

Bank 20000
Cash 21000
Petty cash 22000
Trade receivables 23000
Other receivables 24000
Inventory 25000

Current liabilities (account numbers 40000 to 44999)

Trade payables 40000
Other payables 42000
Bank overdraft 44000

Which of the following would be an appropriate account code for Parkers, a credit customer?
A. 44564
B. 23274
C. 40402
D. 25545

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q19. Cash sales of $15,800 have been correctly entered in the cash account but entered as $18,500 in
the sales account. What is the double entry to correct this transaction?

A. Dr Suspense account $2,700 Cr Sales $2,700

B. Dr Sales $2,700 Cr Suspense account $2,700
C. Dr Sales $2,700 Cr Cash $2,700
D. Dr Cash $2,700 Cr Sales $2,700

Q20. Which of the following entries correctly records a purchase of materials on credit?

A. Dr Materials Cr Cash book payments

B. Dr Materials Cr Purchase day book
C. Dr Cash book payments Cr Materials
D. Dr Purchase day book Cr Materials

Q21. At the start of the year Bharvinder had an interest free loan of $20,000. During the year he
repaid $10,000. Which parts of the accounting equation will change as a result of the loan repayment?

A. Liabilities and profit

B. Assets and liabilities
C. Capital and liabilities
D. Capital and assets

Q22. Alvin received a supplier statement from Darcy showing Alvin owed Darcy $21,980. Alvin's
records showed he only owed Darcy $20,140. Which of the following could be responsible for the
discrepancy?

A. Darcy has issued a credit note to Alvin which he has not yet received
B. Darcy has performed a contra against a balance she owes to Alvin
C. Darcy has already recorded a settlement discount relating to an invoice Alvin has not yet paid
D. Alvin has made a payment not yet received by Darcy

Q23. In Khalid's cash payments book for the month of May the trade payables column totalled
$7,400. What does this amount represent?

A. The discounts received from Khalid's suppliers in May

B. The amount invoiced by Khalid's suppliers in May
C. The amount paid to Khalid's suppliers during May
D. The amount owed to Khalid's suppliers at the end of May

Q24. Which of the following would appear on a supplier's statement?

(1) Invoices issued during the period

(2) Trade discounts given during the period
(3) Credit notes issued during the period
(4) Payments made during the period

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

A. 1, 3 and 4 only
B. 2 and 3 only
C. 1, 2, 3 and 4
D. 1 and 4 only

Q25. Which of the following correctly represents the accounting equation?

A. Capital $27,000 Assets $49,000 Liabilities $22,000

B. Capital $49,000 Assets $27,000 Liabilities $22,000
C. Capital $22,000 Assets $27,000 Liabilities $49,000
D. Capital $49,000 Assets $22,000 Liabilities $27,000

Q26. The total of the discounts column in the cash received book is $140. How should this be posted
in the ledger?

A. Cr Discounts received $140

B. Dr Discounts allowed $140
C. Dr Discounts received $140
D. Cr Discounts allowed $140

Q27. The trade receivables control account shows a balance of $42,500 but the list of customer
balances shows a total of $45,200. Which of the following could explain the difference?
A. The sales day book is overcast by $2,700
B. A customer balance of $2,700 has been omitted from the list of balances
C. The trade receivables column of the cash receipts book is overstated by $2,700
D. A credit note of $2,700 has been correctly treated in the customer's individual account but not
entered into the control account

Q28. Esther received $4,418 from a customer to whom she had sold goods on credit for $3,760 plus
sales tax of $658. What is the double entry for this receipt in the accounts of Esther?

A. Dr Cash $3,760 Cr Sales $3,760

B. Dr Cash $4,418 Cr Accounts receivable $4,418
C. Dr Accounts receivable $4,418 Cr Cash $4,418
D. Dr Sales $3,760 Cr Cash $3,760

Q29. Which of the following are valid reasons for preparing an aged receivables analysis?

(1) It is part of the double entry system

(2) To identify receivables which need to be followed up to ensure payment
(3) To help calculate allowances for irrecoverable debts
(4) To ensure the trial balance balances

A. 2 and 4
B. 1 and 4
C. 1 and 3
D. 2 and 3

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q30. The following is an extract from a ledger account:

Cash
$ $
9 Oct Cash 1,270 26 Oct Cash 587
19 Oct Cash 1,959
30 Oct Cash 1,035

What is the closing balance on this account?

A. Credit balance of $4,264

B. Debit balance of $3,677
C. Credit balance of $3,677
D. Debit balance of $4,264

Q31. Joanna makes regular payments to a specific charity. The cash goes straight from her account
and the charity cannot amend the amount paid. What method of payment is Joanna using?

A. BACS payment
B. Standing order
C. Direct debit
D. Petty cash payment

Q32. When performing a bank reconciliation which of the following would require adjustments to the
cash book balance?

(1) Unpresented cheques

(2) Bank charges not yet accounted for
(3) Outstanding lodgements
(4) Standing order payments not accounted for

A. 2 and 3
B. 1 and 3
C. 2 and 4
D. 1 and 4

Q33. Which of the following checks should the petty cashier make prior to paying out petty cash?

(1) That the claim is supported by appropriate documentation

(2) That the claim has been authorised by an appropriate signature
(3) The credit rating of the business receiving the payment
(4) That the amount is within the petty cash limit

A. 2 and 3
B. 3 and 4
C. 1 and 2 only
D. 1, 2 and 4

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q34. The bank statement of Hugo showed a debit balance of $12,800. The bank reconciliation
showed there were outstanding lodgements of $3,400 and unpresented cheques of $4,700. What is the
correct amount of cash that should be recorded in Hugo's accounts?
A. $14,100 Dr
B. $11,500 Cr
C. $14,100 Cr
D. $11,500 Dr

Q35. Manfred runs his own business and operates an imprest system of petty cash maintaining a float
of $200. At the end of November there is cash of $37.20 and vouchers of $162.80. How much will
Manfred need to pay into petty cash to maintain the float?

A. $37.20
B. $200
C. $162.80
D. $125.60

Q36. The following is extracted from the trial balance at the year end:
$
Capital 9,000
Sales 32,000
Purchases 26,000
Trade receivables 23,000
Inventory 14,000
Trade payables 12,000
Bank overdraft ?
What is the figure for the bank overdraft?
A. $10,000
B. $12,000
C. $22,000
D. $28,000

Q37. Eddy has purchased a van paying by cheque. Eddy uses account codes in his ledgers. His account
codes include:
Bank 2150
Motor Vehicles 4270
Purchases 3820
Which of the following is the correct double entry to record the transaction to the correct accounts?
A. Dr 2150 Cr 4270
B. Dr 4270 Cr 2150
C. Dr 2150 Cr 3820
D. Dr 3820 Cr 2150

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q38. A transaction has been recorded in the ledger of Samir as follows:

$ $
Equipment
19 Oct Bank 16,800

Bank
19 Oct Equipment 16,800
What was the transaction?
A. Receipt of a bank loan to purchase equipment
B. Purchase of equipment on credit
C. Purchase of equipment paid for by cheque
D. Banking of the proceeds from the sale of equipment

Q39. The following information for wages and salaries has been taken from the accounts of Roman:
$
Wages and salaries (gross) 65,708
Income tax 15,770
Employer's pension contributions 5,257
Employee's pension contributions 3,942

There are no statutory or non-statutory deductions other than the above. What is the Roman's total
wages and salaries expense?

A. $65,708
B. $70,965
C. $74,907
D. $90,677

Q40. Jan is employed at an annual salary of $18,720. She is contracted to work 30 hours per week. If
overtime has to be worked the first seven hours of overtime in any week are not paid for. Any overtime
in excess of seven hours in a week is paid for at double time. During one week Jan worked 12 hours of
overtime. What will be Jan's overtime pay for the week?

A. $60
B. $120
C. $480
D. $288

Q41. Jasminder had correctly recorded a wages and salaries expense of $32,000 in her accounts. She
only has two employees who each earn a gross salary of $14,000 per annum.
Which of the following could explain the difference between the gross salaries and total wages and
salaries in the accounts?

A. Pension contributions paid by Jasminder on behalf of her employees

B. Employee pension contributions
C. Jasminder's drawings
D. Employee income tax payments

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q42. Velma sent an invoice to Marion for goods purchased. Velma subsequently issued a debit note
to Marion. Which of the following would explain the issue of the debit note?

A. Marion has refused some of the goods as they were faulty

B. The invoice should have been sent to a customer called Maureen not Marion
C. Packing and posting costs payable by the customer were omitted from the invoice
D. The invoice was incorrectly totalled and overstated by $500

Q43. Bob bought $2,000 of goods from Harvey on 1 November 20X7. He agreed to pay Harvey on 31
January 20X8. What kind of transaction is this from Harvey's point of view?

A. Credit sale
B. Cash sale
C. Cash purchase
D. Credit purchase

Q44. Which of the following items would appear on opposite sides of the trial balance?

A. Motor vehicles and inventory

B. Sales and capital
C. Trade receivables and purchases
D. Trade payables and expenses

Q45. Alfredo runs his own business maintaining receivables and payables control accounts as part of
his accounting system. When preparing the trial balance which one of the following errors would require
the creation of a suspense account?

A. $250 of motor vehicle repairs is posted to the motor vehicles account

B. A bank overdraft of $880 is recorded as a positive cash balance
C. The purchase day book is overstated by $420
D. Alfredo's drawings of $320 have been recorded as wages and salaries

Q46. Jenny has trade receivables of $92,320 at the start of November. During November she had the
following transactions:
$
Cash sales 15,200
Cash receipts from customers 46,420
Credit sales 38,170
Irrecoverable debts written off 2,600

What is the balance on Jenny's trade receivables at the end of November?

A. $66,270
B. $96,760
C. $81,470
D. $97,970

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 FIA-FA1 MOCK 1 ESCRIBIR COLLEGE OF ADVANCED STUDIES

Q47. Xena buys goods from Alex for $20,800 on credit. She subsequently returns goods worth $3,100
and pays him $9,200. In Xena's ledger what is the balance with Alex as a result of these transactions?

A. $26,900 Cr
B. $8,500 Cr
C. $26,900 Dr
D. $8,500 Dr

Q48. Rodger is registered for sales tax which is charged at 17.5%. A customer is invoiced for goods
with a list price of $240,000. The customer is given a trade discount of 25% and a settlement discount of
5% is given if the invoice is paid within 21 days. How much sales tax should be included on the invoice?

A. $39,900
B. $42,000
C. $29,925
D. $31,500

Q49. What is the purpose of a journal?

A. To record all individual transactions entered into the sales day book
B. To record unusual movements between accounts
C. To record the purpose of all transactions made in the accounts
D. To record when all transactions were made between accounts

Q50. Which of the following are valid reasons for having a formal document retention policy?

(1) To help minimise costs associated with maintaining business records

(2) To ensure that all business records are kept for the maximum time possible
(3) To help locate business records
(4) To ensure the trial balance balances

A. 1 and 4
B. 2 and 4
C. 2 and 3
D. 1 and 3

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