F7 (FR) – Chapter 15 – 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.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:ACCA – Association of Chartered Certified Accountants
Fundamental Level:Applied Skills
Subject:Financial Reporting
Paper:F7 – FR
Chapter and Topic15 – Accounting for taxation
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.

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 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 15 - Part B - MCQs - Taxation

Course: ACCA - Association of Chartered Certified Accountants
Subject:
F7 (FR) - Financial Reporting
Syllabus Area: B - Accounting for transactions in financial statements
Chapter: 15 - Taxation
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

  1. If you are using mobile, turn on the mobile rotation and solve the MCQs on wide screen for better experience.

REQUEST

  1. Please rate the quiz and give us feedback once you completed the quiz.
  2. Share with ACCA students on social media such as, Facebook Groups, Whatsapp, Telegram, etc.

1 / 7

The trial balance of Highwood Co at 31 March 20X6 showed credit balances of $800,000 on current tax and $2.6 million on deferred tax. A property was revalued during the year giving rise to deferred tax of $3.75 million. This has been included in the deferred tax provision of $6.75 million at 31 March 20X6.

The income tax liability for the year ended 31 March 20X6 is estimated at $19.4 million.

What will be shown as the income tax charge in the statement of profit or loss of Highwood at 31 March 20X6?

2 / 7

Isaac & Joseph Co purchased new machinery on 1 January 20X5 for $1,000,000. It has a residual value of $200,000, with the useful life deemed to be 8 years. The plant is depreciated on a straight-line basis.

Tax allowances of 50% of the cost of the asset can be claimed in the year of purchase, as depreciation is not allowed for tax purposes. The rate of income tax is 30%

Identify whether a deferred tax asset or liability should be recognised at 31 December 20X5 and at what amount?

3 / 7

The following information relates to an entity:

  1. At 1 January 20X8 the carrying amount of non-current assets exceeded their tax written down value by $850,000.
  2. For the year to 31 December 20X8 the entity claimed depreciation for tax purposes of $500,000 and charged depreciation of $450,000 in the financial statements.
  3. During the year ended 31 December 20X8 the entity revalued a property. The revaluation surplus was $250,000. There are no current plans to sell the property.
  4. The tax rate was 30% throughout the year.

What is the provision for deferred tax required by IAS 12 Income Taxes at 31 December 20X8?

4 / 7

Jasper Orange Co's trial balance at 31 December 20X3 shows a debit balance of $700,000 on current tax and a credit balance of $8,400,000 on deferred tax. The directors have estimated the provision for income tax for the year at $4.5 million and the required deferred tax provision is $5.6 million, $1.2 million of which relates to a property revaluation.

What is the tax liability recognised in Jasper Orange Co's statement of financial position for the year ended 31 December 20X3?

5 / 7

The statements of financial position of Nedburg Co include the following extracts:

Statements of financial position as at 30 September

20X2 20X1
$m $m
Non-current liabilities
  Deferred tax 310 140
Current liabilities
  Taxation 130 160

The tax charge in the statement of profit or loss for the year ended 30 September 20X2 is $270 million.

What amount of tax was paid during the year to 30 September 20X2?

6 / 7

Astral Co purchased an item of plant for $40,000 on 1 September 20X1. The plant has an estimated useful life of five years and an estimated residual value of $5,000. The plant is depreciated on a straight-line basis.
Local tax law does not allow depreciation as an expense, but a tax allowance of 60% of the cost of the asset can be claimed in the year of purchase and 20% per annum on a reducing balance basis in the following years. The rate of income tax is 30%

What charge or credit for deferred taxation should be recorded in Astral Co's statement of profit or loss for the year to 31 August 20X2?

7 / 7

Ullington Co's trial balance shows a debit balance of $2.1 million brought forward on current tax and a credit balance of $5.4 million on deferred tax. The tax charge for the current year is estimated at $16.2 million and the carrying amounts of net assets are $13 million in excess of their tax base. The income tax rate is 30%

What amount will be shown as income tax in the statement of profit or loss of Ullington Co for the year?

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