These are ACCA F3 (FA/FFA) Financial Accounting MCQs for Part-D of the Syllabus “Recording transactions and events”.

These multiple-choice questions (MCQs) are designed to help ACCA F3 students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

Students should not attempt these MCQs until they have finished the entire chapter.
All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F3 (FA/FFA) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:	ACCA – Associations of Chartered Certified Accountants
Fundamental Level:	Knowledge, FIA – Foundation in Accounting
Subject:	Financial Accounting
Paper:	F3 – FA/FFA
Chapter:	Capital structure and finance costs
Chapter Number:	13 of the Practice and Exam Kit
Syllabus Area:	D – “Recording transactions and events”
Questions Type:	CBE MCQs
Exam Section:	Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part D of the Syllabus; “Recording transactions and events” of ACCA F3 (FA/FFA) Financial Accounting Module.

Time

These MCQs are not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate

Result

Students will get their F3 CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “( select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

Keywords

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F3 - Chapter 13 - Part A - MCQs

Course: ACCA - FIA
Subject: F3 (FA/FFA) Financial Accounting
Syllabus Area: D - Recording transactions and events
Chapter in Kit: 13 - Capital structure and finance costs
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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1 / 14

A limited liability company issued 50,000 ordinary shares of 25c each at a premium of 50c per The cash received was correctly recorded but the full amount was credited to the ordinary share capital account.

Which one of the following journal entries is needed to correct this error?

DEBIT Share capital a/c $25,000 ;- CREDIT Share premium a/c $25,000

DEBIT Share capital a/c $25,000 ;- CREDIT Cash a/c $25,000

DEBIT Share capital a/c $37,500 ;- CREDIT Share premium a/c $37,500

DEBIT Share premium a/c $25,000 ;- CREDIT Share capital a/c $25,000

2 / 14

The issued share capital of Alpha, a limited liability company, is as follows:

In the year ended 31 October 20X2, the company has paid the preference dividend for the year and an interim dividend of 2c per share on the ordinary shares. A final ordinary dividend of 3c per share was proposed, after the reporting date.

What amount will be shown as dividends in the statement of changes in equity at 31 October 20X2?

3 / 14

According to the illustrative financial structure in IAS 1 Presentation of financial statements, where should dividends paid during the year be presented?

Statement of profit or loss and other comprehensive income

Statement of changes in equity

Statement of financial position

None of these

4 / 14

When a company makes a rights issue of equity shares which of the following effects will the issue have?

Assets are increased
Retained earnings are reduced
Share premium account is reduced
Investments are increased

1 only

1 and 4

3 only

1 and 2

5 / 14

At 1 January 20X0 the capital structure of Q, a limited liability company, was as follows:

On 1 April 20X0 the company made an issue of 200,000 50c shares at $1.30 each, and on 1 July the company made a bonus (capitalization) issue of one share for every four in issue at the time, using the share premium account for the purpose.

Which of the following correctly states the company's share capital and share premium account at 31 December 20X0?

Share capital a/c $875,000 ;- Share premium a/c $285,000

Share capital a/c $750,000 ;- Share premium a/c $230,000

Share capital a/c $750,000 ;- Share premium a/c $310,000

Share capital a/c $750,000 ;- Share premium a/c $610,000

6 / 14

A company made an issue for cash of 1,000,000 50c shares at a premium of 30c per share.

Which one of the following journal entries correctly records the issue?

Option A

Option B

Option D

Option C

7 / 14

Which of these statements about limited liability companies is/are correct?

A company might make a bonus issue of shares to raise funds for expansion.
No cash is received when a company makes a rights issue of shares, instead other reserves (usually share premium) are capitalized and reclassified as share capital.
A rights issue of shares dilutes the shareholding of existing shareholders if they do not take up their rights.

2 and 3

1 and 3

3 only

1 and 2

8 / 14

Which of the following statements about company financial statements is TRUE, according to International Financial Reporting?

Dividends paid on ordinary shares should be included in the statement of profit or loss and other comprehensive income.

The statement of profit or loss and other comprehensive income shows the gain on revaluation of non-current assets for the period.

Dividends paid on redeemable preference shares are treated in the same way as dividends paid on ordinary shares.

9 / 14

An organization’s year end is 30 September. On 1 January 20X6 the organization took out a loan of $100,000 with annual interest of 12%. The interest is payable in equal instalments on the first day of April, July, October and January in arrears.

How much should be charged to the statement of profit or loss (SPL) for the year ended 30 September 20X6, and how much should be accrued on the statement of financial position (SOFP)?

SPL $9,000;- SOFP $3,000

SPL $9,000 ;- SOFP NIL

SPL $6,000 ;- SOFP $3,000

SPL $12,000 ;- SOFP $3,000

10 / 14

Which one of the following journal entries could correctly record a bonus issue of shares?

DEBIT Ordinary share a/c $100,000 ;- CREDIT Share premium a/c $100,000

DEBIT Cash a/c $100,000 ;- CREDIT Ordinary share a/c $100,000

DEBIT Share premium a/c $100,000 ;- CREDIT Ordinary share a/c $100,000

DEBIT Investments a/c $100,000 ;- CREDIT Cash a/c $100,000

11 / 14

On 31 March 2016, Yellow, a limited liability company, issued share capital of $50,000 (25c ordinary shares). The company also has an investment of 50,000 50c shares in Blue, a limited liability company.

The following is an extract from Yellow's ledger accounts:

Which of the following statements is correct?

Yellow has paid a 10% interim dividend

Yellow has received a 20% interim dividend

Yellow has paid an interim dividend of 5c per share

Yellow has received a 10% interim dividend

12 / 14

At 31 December 20X1 the capital structure of a company was as follows:

During 20X2 the company made a bonus issue of one share for every two held, using the share premium account for the purpose, and later issued for cash another 60,000 shares at 80c per share.

What is the company's capital structure at 31 December 20X2?

Ordinary share capital a/c $105,000 ;- Share premium a/c $137,000

Ordinary share capital a/c $130,000 ;- Share premium a/c $137,000

Ordinary share capital a/c $130,000 ;- Share premium a/c $173,000

Ordinary share capital a/c $105,000 ;- Share premium a/c $173,000

13 / 14

At 30 June 20X2 a company's capital structure was as follows:

In the year ended 30 June 20X3 the company made a rights issue of one share for every two held at $1 per share and this was taken up in full. Later in the year the company made a bonus issue of one share for every five held, using the share premium account for the purpose.

What was the company's capital structure at 30 June 20X3?

Ordinary share capital a/c $225,000 ;- Share premium a/c $325,000

Ordinary share capital a/c $225,000 ;- Share premium a/c $250,000

Ordinary share capital a/c $212,500 ;- Share premium a/c $262,500

Ordinary share capital a/c $450,000 ;- Share premium a/c $25,000

14 / 14

At 30 June 20X2 a company had $1m 8% loan notes in issue, interest being paid half-yearly on 30 June and 31 December.

On 30 September 20X2 the company redeemed $250,000 of these loan notes at par, paying interest due to that date.

On 1 April 20X3 the company issued $500,000 7% loan notes, interest payable half-yearly on 31 March and 30 September.

What figure should appear in the company's statement of profit or loss for interest payable in the year ended 30 June 20X3?

Your score is

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F3 (FA/FFA) – Chapter 13 – PART D – CBE MCQs – ACCA