F3 (FA/FFA) – Chapter 6 – PART D – CBE MCQs – ACCA

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.


Course:ACCA – Associations of Chartered Certified Accountants
Fundamental Level:Knowledge, FIA – Foundation in Accounting
Subject:Financial Accounting
Paper:F3 – FA/FFA
Chapter Number:06 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.


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


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.


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F3 - Chapter 6 - Part A - MCQs

Course: ACCA - FIA
F3 (FA/FFA) Financial Accounting
Syllabus Area: D - Recording transactions and events
Chapter in Kit: 06 - Inventory
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit


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1 / 19

A company values its inventory using the first in, first out (FIFO) method. At 1 May 20X2 the company had 700 engines in inventory, valued at $190 each.

During the year ended 30 April 20X3 the following transactions took place:

1 Jul        Purchased 500 engines at $220 each
1 Nov      Sold 400 engines for $160,000

1 Feb       Purchased 300 engines at $230 each
15 Apr     Sold 250 engines for $125,000

What is the value of the company's closing inventory of engines at 30 April 20X3?

2 / 19

The inventory value for the financial statements of Global Co for the year ended 30 June 20X3 was based on a inventory count on 7 July 20X3, which gave a total inventory value of $950,000.

Between 30 June and 7 July 20X3, the following transactions took place.

Purchase of goods
Sale of goods
(mark up on cost at 15%)

Goods returned by Global Co to supplier
What figure should be included in the financial statements for inventories at 30 June 20X3?


3 / 19

You are preparing the financial statements for a business. The cost of the items in closing inventory is $41,875. This includes some items which cost $1,960 and which were damaged in transit. You have estimated that it will cost $360 to repair the items, and they can then be sold for $1,200.

What is the correct inventory valuation for inclusion in the financial statements?

4 / 19

In preparing its financial statements for the current year, a company's closing inventory was understated by $300,000.

What will be the effect of this error if it remains uncorrected?

5 / 19

S sells three products – Basic, Super and Luxury. The following information was available at the year end.

What is the value of inventory at the year end?

6 / 19

The closing inventory at cost of a company at 31 January 20X3 amounted to $284,700.

The following items were included at cost in the total:

  1. 400 coats, which had cost $80 each and normally sold for $150 each. Owing to a defect in manufacture, they were all sold after the reporting date at 50% of their normal price. Selling expenses amounted to 5% of the proceeds.
  2. 800 skirts, which had cost $20 each. These too were found to be defective. Remedial work in February 20X3 cost $5 per skirt, and selling expenses for the batch totalled $800. They were sold for $28 each.

What should the inventory value be according to IAS 2 Inventories after considering the above items?

7 / 19

IAS 2 Inventories defines the items that may be included in computing the cost of an inventory of finished goods manufactured by a business.

Which one of the following lists consists only of items which may be included in the cost of inventories, according to IAS 2?

8 / 19

The financial year of Mitex Co ended on 31 December 20X1. An inventory count on January 4 20X2 gave a total inventory value of $527,300.

The following transactions occurred between January 1 and January 4.

Purchases of goods
Sales of goods
(gross profit margin 40% on sales)
Goods returned to a supplier
What inventory value should be included in Mitex Co's financial statements at 31 December 20X1?

9 / 19

Which of the following costs may be included when arriving at the cost of finished goods inventory for inclusion in the financial statements of a manufacturing company?

  1. Carriage inwards
  2. Carriage outwards
  3. Depreciation of factory plant
  4. Finished goods storage costs
  5. Factory supervisors' wages

10 / 19

Which of the following statements about IAS 2 Inventories is correct?

11 / 19

The information below relates to inventory item Z.

Under AVCO, what is the value of inventory held for item Z at the end of March 31?

12 / 19

A firm has the following transactions with its product R.

The firm uses periodic weighted average cost (AVCO) to value its inventory.

What is the inventory value at the end of the year? (Give your answer to 2 decimal places)

13 / 19

The inventory value for the financial statements of Q for the year ended 31 December 20X4 was based on an inventory count on 4 January 20X5, which gave a total inventory value of $836,200.

Between 31 December and 4 January 20X5, the following transactions took place:

Purchases of goods
Sales of goods
(profit margin 30% on sales)
Goods returned by Q to supplier
What adjusted figure should be included in the financial statements for inventories at 31 December 20X4?

14 / 19

Which of the following statements about the valuation of inventory is/are CORRECT according to IAS 2 Inventories.

15 / 19

A company has decided to switch from using the FIFO method of inventory valuation to using the average cost method (AVCO).

In the first accounting period where the change is made, opening inventory valued by the FIFO method was $53,200. Closing inventory valued by the AVCO method was $59,800.

Total purchases and during the period were $136,500. Using the continuous AVCO method, opening inventory would have been valued at $56,200.

What is the cost of materials that should be included in the statement of profit or loss for the period?

16 / 19

Which one of the following statements about the use of a continuous inventory system is INCORRECT?

17 / 19

A company with an accounting date of 31 October carried out a physical check of inventory on 4 November 20X3, leading to an inventory value at cost at this date of $483,700.

Between 1 November 20X3 and 4 November 20X3 the following transactions took place:

  1. Goods costing $38,400 were received from suppliers.
  2. Goods that had cost $14,800 were sold for $20,000.
  3. A customer returned, in good condition, some goods which had been sold to him in October for $600 and which had cost $400.
  4. The company returned goods that had cost $1,800 in October to the supplier, and received a credit note for them.

What figure should appear in the company's financial statements at 31 October 20X3 for closing inventory, based on this information?

18 / 19

An inventory record card shows the following details.

What is the value of inventory at 28 February using the FIFO method?

19 / 19

The closing inventory of X amounted to $116,400 excluding the following two inventory lines:

  1. 400 items which had cost $4 each. All were sold after the reporting period for $3 each, with selling expenses of $200 for the batch.
  2. 200 different items which had cost $30 each. These items were found to be defective at the end of the reporting period. Rectification work after the statement of financial position amounted to $1,200, after which they were sold for $35 each, with selling expenses totalling $300.

Which of the following total figures should appear in the statement of financial position of X for inventory?

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