ACCA F3 v1 Questions With Complete Solutions.

Main Accounting equation correct answer: PROFIT = INCREASE IN NET ASSETS + DRAWINGS - CAPITAL INTRODUCED Main Accounting equation - increase in net assets correct answer: CLOSING NET ASSETS - OPENING NET ASSETS Net Assets correct answer: Net assets = Total assets - Total liabilities Gross Profit formula correct answer: Gross Profit = Sales - Cost of Goods Sold COGS (Cost of Goods Sold) formula correct answer: Cost of Goods Sold = Opening Inventory + Purchases - Closing Inventory Purchases correct answer: Purchase is the cost of buying inventory during a period for the purpose of sale in the ordinary course of the business. There is a difference between purchases for resale (called purchases) and acquisition of assets (e.g. factory) Purchases dual entries: acquisition of inventory with cash correct answer: "D: purchases; C: Cash " Purchases dual entries: acquisition of inventory on credit correct answer: "D: Purchases; C: Payables " Dual entries: company pays it's own debts correct answer: "D: Payables; C: Cash