These are ACCA F7 (FR) Financial Reporting MCQs for Part-C of the Syllabus “Analysing and interpreting the financial statements of single entities and groups”.

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
Chapters and Topics Covered:	Limitations of financial statements, Calculation and interpretation of accounting ratios and trends to address users’ and stakeholders’ needs, Limitations of interpretation techniques, Specialised, not-for-profit, and public sector entities
Questions:	01 – Sandbag plc
Syllabus Area:	C – “Analysing and interpreting the financial statements of single entities and groups”
Questions Type:	CBE MCQs
Exam Section:	Section B

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part C of the Syllabus; “Analysing and interpreting the financial statements of single entities and groups” 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

Question – Sandbag plc – (01/01)

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F7 (FR) - Part C - MCQs - Sandbag plc

Course: ACCA - Association of Chartered Certified Accountants
Subject: F7 (FR) - Financial Reporting
Syllabus Area: C - Analysing and interpreting the financial statements of single entities and groups
Question Name: Sandbag plc
Exam Section: Section B
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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REQUEST

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1 / 5

The following scenario relates to questions 1–5.

Scenario

Sandbag plc is a listed manufacturing company. Its summarised statement of financial position is given below.

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4

	$m
Non-current assets	610

Inventories	96
Trade receivables	29
Current asset investments	5
Cash and cash equivalents	3
	133
	743
Equity and liabilities
$1 ordinary shares	400
Retained earnings	190
	590
Non-current liabilities – loans	50
Trade and other payables	103
	743

REQUIREMENT

The finance director of Sandbag plc knows that the acid test ratio is below 1. He is planning two changes:

Proposal 1: Offering a 2% early settlement discount to credit customers
Proposal 2: Delaying payment to all trade payables by one extra month

What affects the proposals would have on the acid test ratio?

Proposal 1: Increase ratio , Proposal 2: Increase ratio

Proposal 1: Increase ratio , Proposal 2: Decrease ratio

Proposal 1: Decrease ratio , Proposal 2: Decrease ratio

Proposal 1: Decrease ratio , Proposal 2: Increase ratio

2 / 5

The following scenario relates to questions 1–5.

Scenario

Sandbag plc is a listed manufacturing company. Its summarised statement of financial position is given below.

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4

	$m
Non-current assets	610

Inventories	96
Trade receivables	29
Current asset investments	5
Cash and cash equivalents	3
	133
	743
Equity and liabilities
$1 ordinary shares	400
Retained earnings	190
	590
Non-current liabilities – loans	50
Trade and other payables	103
	743

REQUIREMENT

Sandbag plc is a manufacturing company. Which of the following ratios would best assess the efficiency of Sandbag plc?

Price/earnings ratio

Non-current asset turnover

Current ratio

Gearing ratio

3 / 5

The following scenario relates to questions 1–5.

Scenario

Sandbag plc is a listed manufacturing company. Its summarised statement of financial position is given below.

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4

	$m
Non-current assets	610

Inventories	96
Trade receivables	29
Current asset investments	5
Cash and cash equivalents	3
	133
	743
Equity and liabilities
$1 ordinary shares	400
Retained earnings	190
	590
Non-current liabilities – loans	50
Trade and other payables	103
	743

REQUIREMENT

The finance director of Sandbag plc is worried about its current ratio. He is considering a number of actions that he hopes will improve Sandbag plc's current ratio.

Which of the following would increase Sandbag plc's current ratio?

Make a bonus issue of ordinary shares

Offer a settlement discount to customers

Sell current asset investments at the carrying amount

Make a rights issue of ordinary shares

4 / 5

The following scenario relates to questions 1–5.

Scenario

Sandbag plc is a listed manufacturing company. Its summarised statement of financial position is given below.

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4

	$m
Non-current assets	610

Inventories	96
Trade receivables	29
Current asset investments	5
Cash and cash equivalents	3
	133
	743
Equity and liabilities
$1 ordinary shares	400
Retained earnings	190
	590
Non-current liabilities – loans	50
Trade and other payables	103
	743

REQUIREMENT

What is Sandbag plc's acid test (quick) ratio at 31 December 20X4? (Enter your answer to two decimal places)

5 / 5

The following scenario relates to questions 1–5.

Scenario

Sandbag plc is a listed manufacturing company. Its summarised statement of financial position is given below.

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4

	$m
Non-current assets	610

Inventories	96
Trade receivables	29
Current asset investments	5
Cash and cash equivalents	3
	133
	743
Equity and liabilities
$1 ordinary shares	400
Retained earnings	190
	590
Non-current liabilities – loans	50
Trade and other payables	103
	743