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Free ACCA Financial Reporting Practice Questions & Answers

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Question 91

A company has borrowed 2,000,000 at 6% to fund a qualifying asset under construction, earning 30,000 from temporarily investing surplus funds. What is the net borrowing cost eligible for capitalisation?

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Question 92

Under the indirect method, a gain on disposal of non-current assets is shown in the operating cash flow section as:

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Question 93

Entity A has an obligation to dismantle an oil platform at the end of its 20-year life, estimated at 5,000,000 in today's money. What should be recognised on day one?

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Question 94

An entity's financial statements show a 200,000 provision at the prior year end. During the current year, the actual cost of settling the obligation was 240,000. The additional 40,000 should be:

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Question 95

Which of the following would make a deferred tax liability arise?

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Question 96

An asset has a carrying amount of 500 and a tax base of 350. The applicable tax rate is 25%. What is the resulting deferred tax?

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Question 97

A provision for bad debts creates a deductible temporary difference because:

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Question 98

Entity B has general borrowings of 4,000,000 at 8% and 2,000,000 at 5%. During the year it spent 1,200,000 on a qualifying asset. What is the borrowing cost capitalised?

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Question 99

An entity has total comprehensive income of 800,000, of which profit is 650,000 and OCI is 150,000. Dividends paid were 100,000, and new shares were issued raising 200,000. Opening equity was 2,000,000. What is closing equity?

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Question 100

A company's accounting policy is to recognise a provision for warranties based on historical return rates. This year, management decides that no provision is needed because product quality has improved. How should this be classified and what are the financial reporting implications?

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Question 101

Under IAS 8, which of the following changes requires retrospective restatement of all prior periods presented?

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Question 102

An entity discovers it understated depreciation by 50,000 in the prior year. The tax rate is 25%. What is the correcting entry in the current year comparative statements under retrospective restatement?

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Question 103

An entity measures a provision at the probability-weighted expected value. There are three possible outcomes: 100,000 (30% probability), 200,000 (50%), 350,000 (20%). What is the provision?

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Question 104

Where are ordinary dividends paid to shareholders reported in the statement of cash flows?

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Question 105

Which of the following items is included in other comprehensive income (OCI)?

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Question 106

Total comprehensive income equals:

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Question 107

Which of the following increases equity?

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Question 108

What does a statement of changes in equity show?

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Question 109

What is share premium?

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Question 110

Which of the following is NOT a component of shareholders equity?

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Question 111

What does earnings per share (EPS) measure?

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Question 112

Which ratio measures the return generated on equity invested by shareholders?

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Question 113

What is the formula for return on capital employed (ROCE)?

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Question 114

Gross profit margin is calculated as:

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Question 115

The current ratio is:

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Question 116

What does the quick ratio (acid test ratio) exclude from current assets?

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Question 117

What does inventory days (inventory holding period) measure?

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Question 118

Receivables days (debtor collection period) is calculated as:

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Question 119

Payables days is calculated as:

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Question 120

Net profit margin is:

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Free ACCA Financial Reporting Practice Questions & Answers

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