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 Topic	17 – Reporting financial performance
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.

Keywords

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F7 (FR) - Chapter 17 - 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: 17 - Reporting financial performance
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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1 / 9

Which of the following items is a change of accounting policy under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors?

Classifying commission earned as revenue in the statement of profit or loss, having previously classified it as other operating income

Revising the remaining useful life of a depreciable asset

Switching to purchasing plant using leases from a previous policy of purchasing plant for cash

Changing the value of a subsidiary's inventory in line with the group policy for inventory valuation when preparing the consolidated financial statements

2 / 9

As at 30 September 20X3 Dune Co's property in its statement of financial position was:

Property at cost (useful life 15 years)	$45 million
Accumulated depreciation	$6 million

On 1 April 20X4 Dune Co decided to sell the property. The property is being marketed by a property agent at a price of $42 million, which was considered a reasonably achievable price at that date. The expected costs to sell have been agreed at $1 million. Recent market transactions suggest that actual selling prices achieved for this type of property in the current market conditions are 10% less than the price at which they are marketed.

At 30 September 20X4 the property has not been sold.

At what amount should the property be reported in Dune Co's statement of financial position as at 30 September 20X4?

$37.5 million

$36.8 million

$42 million

$36 million

3 / 9

For an asset to be classified as 'held for sale' under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations its sale must be 'highly probable'.

Which of the following is NOT a requirement if the sale is to be regarded as highly probable?

The sale should be expected to take place within one year from the date of classification.

Management must be committed to a plan to sell the asset.

A buyer must have been located for the asset.

The asset must be marketed at a reasonable price.

4 / 9

IAS 21 sets out how entities that carry out transactions in a foreign currency should measure the results of these transactions at the year end.

Using the picklist provided, select which exchange rate should non-monetary items carried at historical cost be measured?

5 / 9

Miston Co buys goods priced at €50,000 from a Dutch company on 1 November 20X8. The invoice is due for settlement in two equal instalments on 1 December 20X8 and 1 January 20X9.

The exchange rate moved as follows:

1 November 20X8 - 1.63 to $1
1 December 20X8 – 1.61 to $1
31 December 20X8 – 1.64 to $1

What will be the net exchange gain or loss to be reported in the financial statements of Miston Co at 31 December 20X8? $________ (to nearest $)

$93 loss

$98 loss

$98 gain

$93 gain

6 / 9

Complete the statement using the options provided

An asset classified as 'held for sale' should be measured at the lower of _________ and ______________

Fair value less costs of disposal and Value in use

Carrying amount less costs of disposal and Value in use

Fair value less costs of disposal and Carrying amount less costs of disposal

Carrying amount and Fair value less costs of disposal

7 / 9

Which of the following would be a change in accounting policy in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors?

Reducing the value of inventory from cost to net realisable value due to a valid adjusting event after the reporting period

Adjusting the financial statements of a subsidiary prior to consolidation as its accounting policies differ from those of its parent

Depreciation charged on reducing balance method rather than straight line

A change in reporting depreciation charges as cost of sales rather than as administrative expenses

8 / 9

Which of the following would be treated under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors as a change of accounting policy?

A change in valuation of inventory from a weighted average to a FIFO basis

A change of depreciation method from straight line to reducing balance

Adoption of the revaluation model for non-current assets previously held at cost

Capitalisation of borrowing costs which have arisen for the first time

9 / 9

Steeplechase Co sold a machine to a Greek company which it agreed to invoice in €. The sale was made on 1 October 20X6 for €250,000. €125,000 was received on 1 November 20X6 and the balance is due on 1 January 20X7.

The exchange rate moved as follows:

1 October 20X6 – €0.91 to $1
1 November 20X6 – €0.95 to $1
31 December 20X6 – €0.85 to $1

At what amount will the receivable be shown in the financial statements at 31 December 20X6? $_______ (to the nearest $)

$147,059

$145,000

$148,000

$144,188