F7 (FR) – Chapter 11 – PART B – CBE MCQs – ACCA

These are ACCA F7 (FR) Financial Reporting MCQs for Part-B of the Syllabus “Accounting for transactions in financial statements”.

These multiple-choice questions (MCQs) are designed to help ACCA F7 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 F7 (FR) exam.


Course:ACCA – Association of Chartered Certified Accountants
Fundamental Level:Applied Skills
Subject:Financial Reporting
Paper:F7 – FR
Chapter and Topic11 – Financial instruments
Syllabus Area:B – “Accounting for transactions in financial statements”
Questions Type:CBE MCQs
Exam Section:Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part-B of the Syllabus; “Accounting for transactions in financial statements” of ACCA F7 (FR) Financial Reporting 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 F7 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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F7 (FR) - Chapter 11 - Part B - MCQs - Financial instruments

Course: ACCA - Association of Chartered Certified Accountants
F7 (FR) - Financial Reporting
Syllabus Area: B - Accounting for transactions in financial statements
Chapter: 11 - Financial instruments
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit


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1 / 7

Dexon Co's draft statement of financial position as at 31 March 20X8 shows financial assets at fair value through profit or loss with a carrying amount of $12.5 million as at 1 April 20X7.

These financial assets are held in a fund whose value changes directly in proportion to a specified market index. At 1 April 20X7 the relevant index was 1,200 and at 31 March 20X8 it was 1,296.

What amount of gain or loss should be recognised at 31 March 20X8 in respect of these assets?

2 / 7

Which of the following is NOT classified as a financial instrument under IAS 32 Financial Instruments: Presentation?

3 / 7

On 1 January 20X8 Zeeper Ltd purchased 40,000 $1 listed equity shares at a price of $3 per share. An irrevocable election was made to recognise the shares at fair value through other comprehensive income.
Transaction costs were $3,000. At the year end of 31 December 20X8 the shares were trading at $6 per share.

What amount in respect of these shares will be shown under 'investments in equity instruments' in the statement of financial position of Zeeper Ltd as at 31 December 20X8? $______

Note. You are not required to put $ sign nor any coma. (e.g. 1000)

4 / 7

On 1 January 20X1 Penfold Co purchased a debt instrument at its fair value of $500,000. It had a principal amount of $550,000 and was due to mature in five years. The debt instrument carries fixed interest of 6% paid annually in arrears and has an effective interest rate of 8%. It is held at amortised cost.

At what amount will the debt instrument be shown in the statement of financial position of Penfold Co as at 31 December 20X2?

5 / 7

Complete the statement to show how IFRS 9 Financial Instruments require investments in equity instruments to be measured and accounted for (in the absence of any election at initial recognition)?

_____________ with changes going through ______________

6 / 7

An 8% $30 million convertible loan note was issued on 1 April 20X5 at Interest is payable in arrears on 31 March each year. The loan note is redeemable at par on 31 March 20X8 or convertible into equity shares at the option of the loan note holders on the basis of 30 shares for each $100 of loan. A similar instrument without the conversion option would have an interest rate of 10% per annum.

The present values of $1 receivable at the end of each year based on discount rates of 8% and 10% are:

8% 10%
End of year 1 0.93 0.91
2 0.86 0.83
3 0.79 0.75
Cumulative 2.58 2.49

What amount will be credited to equity on 1 April 20X5 in respect of this financial instrument?

7 / 7

A 5% loan note was issued on 1 April 20X0 at its face value of $20 million. Direct costs of the issue were $500,000. The loan note will be redeemed on 31 March 20X3 at a substantial premium. The effective interest rate applicable is 10% per annum.

At what amount will the loan note appear in the statement of financial position as at 31 March 20X2?

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