ACCA F3: Priority Exam Practice Questions and Answers

ACCA F3: Priority Exam Practice Questions and Answers Main Accounting equation (PROFIT = ?) - ANSWERPROFIT = INCREASE IN NET ASSETS + DRAWINGS - CAPITAL INTRODUCED Main Accounting equation (increase in net assets = ?) - ANSWERCLOSING NET ASSETS - OPENING NET ASSETS Gross Profit formula - ANSWERGross Profit = Sales - Cost of Goods Sold COGS (Cost of Goods Sold) formula - ANSWERCost of Goods Sold = Opening Inventory + Purchases - Closing Inventory 3 items in statement of changes in equity - ANSWER1. Total comprehensive income for the year 2. Equity dividends paid 3. Prior period adjustment ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 2/13 Equity/Ordinary shares - ANSWERThis type of share gives the stockholder the right to share in the profits of the company, and to vote on matters of corporate policy and the composition of the members of the board of directors 3 items in equity section of balance sheet - ANSWER1. Accumulated comprehensive income for the year 2. Retained earnings 3. Common (Equity) Shares Formula to calculate annual depreciation charge after revaluation (when useful life has not changed) - ANSWERAnnual charge = revalued amount / remaining useful life How to calculate annual depreciation if asset was revalued mid. year - ANSWERTotal Annual Charge = (Annual charge with old value / 12 x 6 months) + (Annual charge with new value / 12 x 6 months) Costs that can be capitalised (4 preparation and 3 disposal): - ANSWERPrep.: 1) site preparation, 2) delivery inwards and handling, 3) installation, 4) related professional fees for architects and engineers ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 3/13 Disposal: 1) cost of dismantling 2) cost of removing asset from site 3) cost of site restoration Net of sales tax = $62,150. Tax rate = 10%. Calculate tax - ANSWERTax = 62150 x 0.1 = 6215 Inclusive of sales tax = $71,940. Tax rate = 10% Calculate tax - ANSWERTax = 71940 - (71940 x 100 / 110) = 6,540 3 main elements included into COGS - ANSWER1) Import duties 2) Carriage inwards 3) Any other costs that are directly attributable to conversion (e.g. factory ren