F7 (FR) – Chapter 3 – 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 Topic03 – Tangible non-current assets
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 03 - Part B - MCQs - Tangible non-current assets

Course: ACCA - Association of Chartered Certified Accountants
F7 (FR) - Financial Reporting
Syllabus Area: B - Accounting for transactions in financial statements
Chapter: 03 - Tangible non-current assets
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit


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1 / 9

Fido Feed Ltd has the following loans in place throughout the year ended 31 December 20X8 which constitute its general borrowings for the period.

10% bank loan 140
8% bank loan 200

On 1 July 20X8 $50 million was drawn down for construction of a qualifying asset which was completed during 20X9.

What amount should be capitalised as borrowing costs at 31 December 20X8 in respect of this asset?

2 / 9

Wetherby Co purchased a machine on 1 July 20X7 for $500,000. It is being depreciated on a straight-line basis over its useful life of ten years. Residual value is estimated at $20,000. On 1 January 20X8, following a change in legislation, Wetherby Co fitted a safety guard to the machine.
The safety guard cost $25,000 and has a useful life of five years with no residual value.

What amount will be charged to profit or loss for the year ended 31 March 20X8 in respect of depreciation on this machine? $______

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

3 / 9

Which of the following would be recognised as an investment property under IAS 40 Investment Property in the consolidated financial statements of Build Co?

4 / 9

Foster Co has built a new factory incurring the following costs:

Land 1,200
Materials 2,400
Labour 3,000
Architect's fees 25
Surveyor's fees 15
Site overheads 300
Apportioned administrative overheads 150
Testing of fire alarms 10
Business rates for first year 12

What will be the total amount capitalised in respect of the factory?

5 / 9

Leclerc Co has borrowed $2.4 million to finance the building of a factory. Construction is expected to take two years. The loan was drawn down on 1 January 20X9 and work began on 1 March 20X9. $1 million of the loan was not utilised until 1 July 20X9 so Leclerc was able to invest it until needed.
Leclerc Co is paying 8% on the loan and can invest surplus funds at 6%.

Calculate the borrowing costs to be capitalised for the year ended 31 December 20X9 in respect of this project.

6 / 9

Carter Co vacated its head office building and let it out to a third party on 30 June 20X8. The building had an original cost of $900,000 on 1 January 20X0 and was being depreciated over 50 years. It was judged to have a fair value on 30 June 20X8 of $950,000. At the year-end date of 31 December 20X8 the fair value of the building was estimated at $1.2 million.

Carter Co uses the fair value model for investment property.

What amount will be shown in revaluation surplus at 31 December 20X8 in respect of this building? $______

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

7 / 9

Auckland Co purchased a machine for $60,000 on 1 January 20X7 and assigned it a useful life of 15 years.
On 31 March 20X9 it was revalued to $64,000 with no change in useful life.

What will be depreciation charge in relation to this machine in the financial statements of Auckland Co for the year ending 31 December 20X9? $______

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

8 / 9

Carriageways Co had the following bank loans outstanding during the whole of 20X8 which form the company's general borrowings for the year:

9% loan repayable 20X9 15
11% loan repayable 20Y2 25

Carriageways Co began construction of a qualifying asset on 1 April 20X8 and withdrew funds of $6 million on that date to fund construction. On 1 August 20X8 an additional $2 million was withdrawn for the same purpose.

Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8.

9 / 9

Which of the following statements are true or false in accordance with IAS 40 Investment Property?

  1. Following initial recognition, investment property can be held at either cost or fair value.
  2. If an investment property is held at fair value, this must be applied to all of the entity's investment properties.
  3. An investment property is initially measured at cost, including transaction costs.
  4. A gain or loss arising from a change in the fair value of an investment property should be recognised in the revaluation surplus.

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