These are ACCA F3 (FA/FFA) Financial Accounting MCQs for Part-F of the Syllabus “Preparing basic financial statements”.

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:	Events after the reporting period
Chapter Number:	23 of the Practice and Exam Kit
Syllabus Area:	F – “Preparing basic financial statements”
Questions Type:	CBE MCQs
Exam Section:	Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part F of the Syllabus; “Preparing basic financial statements” 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

1 votes, 5 avg

F3 - Chapter 23 - Part A - MCQs

Course: ACCA - FIA
Subject: F3 (FA/FFA) Financial Accounting
Syllabus Area: F - Preparing basic financial statements
Chapter in Kit: 23 - Events after the reporting period
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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REQUEST

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1 / 9

Which of the following events occurring after the reporting period are classified as adjusting, if material?

The sale of inventories valued at cost at the end of the reporting period for a figure in excess of cost
A valuation of land and buildings providing evidence of an impairment in value at the year end
The issue of shares and loan notes
The insolvency of a customer with a balance outstanding at the year end

2 and 3

1 and 3

1 and 4

2 and 4

2 / 9

The financial statements of Overexposure Co for the year ended 31 December 20X1 are to be approved on 31 March Before they are approved, the following events take place.

Which TWO events should be DISCLOSE in the financial statements at 31 December 20X1?

On 15 March 20X2, a fire occurred in the eastern branch factory which destroyed a material amount of inventory. It is estimated that it will cost $505,000 to repair the significant damage done to the factory.

On 14 February 20X2 the directors took the strategic decision to sell their investment in Quebec Co despite the fact that this investment generated material revenues.

On 17 March 20X2, a customer of Overexposure Co went into liquidation. Overexposure has been advised that it is unlikely to receive payment for any of the outstanding balances owed by the customer at the year end.

3 / 9

Which of the following material events after the reporting period and before the financial statements are approved by the directors should be adjusted for in those financial statements?

A valuation of property providing evidence of impairment in value at the reporting period
Sale of inventory held at the end of the reporting period for less than cost
Discovery of fraud or error affecting the financial statements
The insolvency of a customer with a debt owing at the end of the reporting period which is still outstanding

All of them

1, 2 and 4 only

1, 2 and 3 only

3 and 4 only

4 / 9

Which of the following events between the reporting date and the date the financial statements are authorised for issue must be adjusted in the financial statements?

Declaration of equity dividends
Decline in market value of investments
The announcement of changes in tax rates
The announcement of a major restructuring

None of them

2 and 4

3 only

1 only

5 / 9

IAS 10 Events After the Reporting Period regulates the extent to which events after the reporting period should be reflected in financial

Which one of the following lists of such events consists only of items that, according to IAS 10, should normally be classified as non-adjusting?

Insolvency of an account receivable which was outstanding at the end of the reporting period, issue of shares or loan notes, an acquisition of another company

Issue of shares or loan notes, changes in foreign exchange rates, major purchases of non-current assets

An acquisition of another company, destruction of a major non-current asset by fire, discovery of fraud or error which shows that the financial statements were incorrect

Sale of inventory which gives evidence about its value at the end of the reporting period, issue of shares or loan notes, destruction of a major non-current asset by fire

6 / 9

If a material event occurs after the reporting date but before the financial statements are authorised for issue outside the organisation, and this event does NOT require adjustment, what information should be disclosed in the financial statements?

An estimate of the financial effect (or a statement that such an estimate cannot be made) only

The nature of the event only

The nature of the event and an estimate of the financial effect (or a statement that such an estimate cannot be made)

No disclosure required

7 / 9

Which of the following is the correct definition of an adjusting event after the reporting period?

An event that occurs after the date the financial statements are authorised for issue that provides evidence of conditions that arose subsequent to the reporting date

An event that occurs between the reporting date and the date on which the financial statements are authorised for issue that provides further evidence of conditions that existed at the reporting date

An event that occurs between the reporting date and the date on which the financial statements are authorised for issue that provides evidence of conditions that arose subsequent to the reporting date

An event that occurs after the date the financial statements are authorised for issue that provides further evidence of conditions that existed at the reporting date

8 / 9

The draft financial statements of a limited liability company are under consideration. The accounting treatment of the following material events which occurred after the end of the reporting period needs to be determined.

According to IAS 10 Events After the Reporting Period, which TWO of the events require an adjustment to the figures in the draft financial statements?

Sale for less than cost of some inventory held at the end of the reporting period

An issue of shares to finance expansion

A fire destroying some of the company's inventory (the company's going concern status is not affected)

The bankruptcy of a major customer, with a substantial debt outstanding at the end of the reporting period

9 / 9

In finalising the financial statements of a company for the year ended 30 June 20X4, which of the following material matters should be adjusted for?

A customer who owed $180,000 at the end of the reporting period went bankrupt in July 20X4.
The sale in August 20X4 for $400,000 of some inventory items valued in the statement of financial position at $500,000.
A factory with a value of $3,000,000 was seriously damaged by a fire in July 20X4. The factory was back in production by August 20X4 but its value was reduced to $2,000,000.
The company issued 1,000,000 ordinary shares in August 20X4.

1 and 2 only

All four items

2 and 3 only

1 and 4 only

Your score is

F3 (FA/FFA) – Chapter 23 – PART F – CBE MCQs – ACCA