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Free ACCA Financial Reporting Practice Questions & Answers

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Question 181

An entity sells goods for 100,000 with a right of return within 60 days. Based on past experience, returns are expected to be 5%. Revenue recognised at delivery is:

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Question 182

An entity enters a contract to build a customised machine for 400,000. By year end, costs incurred are 90,000 out of estimated total costs of 300,000. What revenue is recognised this year (cost-to-cost method)?

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Question 183

A franchise arrangement grants a licence to use a brand name (point-in-time delivery) plus 12 months of training support (delivered over time). Total fee is 50,000. Stand-alone prices: licence 35,000, support 15,000. Revenue recognised at inception (licence delivery):

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Question 184

An entity sells a product for 1,000 with a two-year assurance-type warranty. What is the revenue treatment for the warranty?

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Question 185

Under IFRS 15, the residual approach to estimating stand-alone selling price is used when:

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Question 186

An entity enters a contract for 200,000. Half is received in advance; the rest is due on completion of the single performance obligation. At year end, the work is 40% complete but the obligation has not yet been satisfied. Revenue recognised:

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Question 187

An entity sells 10 units of software for 800 each and includes 2 years of free updates (stand-alone value 100 per unit per year). Total contract price = 8,000 for 10 units. How much revenue is deferred for updates at inception?

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Question 188

An entity issues a 3-year 5% bond with a face value of 100,000 when the market rate is 7%. The bond proceeds received will be less than 100,000. Under amortised cost, interest expense each year is:

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Question 189

Under IFRS 9, which of the following equity instruments cannot be reclassified out of its initial classification?

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Question 190

An entity has a contract to sell 1,000 units for 50 each. The customer has a right to return up to 100 units within 30 days. Based on historical data, 80 returns are expected. What revenue should be recognised on delivery?

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Question 191

A construction contract has a total price of 500,000. By year end, costs incurred are 120,000 out of estimated total costs of 400,000. What revenue should be recognised using the cost-to-cost method?

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Question 192

An entity sells a software licence plus one year of support for a bundle price of 120,000. Stand-alone price of licence = 100,000; support = 40,000. How much is recognised at inception (licence delivered at point of sale)?

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Question 193

An entity has a 5-year bond with face value 500,000, coupon rate 6%, and effective interest rate 8%. The bond is classified at amortised cost. Calculate the opening year 1 carrying amount (to the nearest 000).

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Question 194

An entity reclassifies a debt instrument from amortised cost to FVTPL because its business model changed. At the reclassification date, the carrying amount is 200,000 and fair value is 215,000. The 15,000 difference is:

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Question 195

An entity issues a financial liability at amortised cost for proceeds of 490,000 (face value 500,000, 3-year term, coupon 5%, effective rate 6%). Year 1 interest expense and closing carrying amount:

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Question 196

An entity has trade receivables (gross) of 500,000 at year end, with a loss allowance of 30,000. Opening gross receivables were 420,000 with loss allowance of 20,000. In the indirect method cash flow, the working capital adjustment for receivables:

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Question 197

Under the fair value model for investment property, revaluation gains and losses are recognised:

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Question 198

Under the fair value model for investment property, is depreciation charged?

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Question 199

At the commencement of a lease, the lessee recognises:

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Question 200

How is the initial lease liability measured by the lessee?

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Question 201

Which of the following is an exception that allows a lessee to avoid recognising a right-of-use asset and lease liability?

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Question 202

How is a right-of-use asset depreciated?

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Question 203

What is a finance lease from the lessor's perspective?

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Question 204

In an operating lease for the lessor, the asset:

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Question 205

What is a right-of-use (ROU) asset?

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Question 206

Which of the following is an example of a short-term lease exception under IFRS 16?

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Question 207

An entity transfers a property from owner-occupied use to investment property measured at fair value. At the transfer date, fair value exceeds carrying amount by 60,000. How is this treated?

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Question 208

A property is transferred from owner-occupied to investment property held at fair value. At the transfer date, the fair value exceeds the carrying amount. The excess is treated as:

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Question 209

Under IFRS 16, the interest charge on the lease liability each period is calculated using:

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Question 210

A lessee's lease liability at the start of year 1 is 50,000, with an effective interest rate of 8%. The annual lease payment is 12,523 payable at year end. What is the closing lease liability after year 1?

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Free ACCA Financial Reporting Practice Questions & Answers

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