ACCA F3 flashcards – set 1

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See also ACCA F3 Flashcards: Set 1 | Set 2 | Set 3 | Set 4


What is the difference between the Statement of Comprehensive Income and the Income Statement?

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The Statement of Comprehensive Income is the same as the Income Statement but with the addition of any surplus on revaluation.
(For later exams there are other differences, but the above is the only relevant one for Paper F3).

What is meant by a gross margin?

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The gross margin is the gross profit expressed as a percentage of the sales.

What is meant by an early settlement discount?

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An early settlement is a discount given if payment is made quickly.

What is the double entry for the sale of goods on credit?

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Debit receivables
Credit sales

What is the double entry for the purchase of goods for resale on credit?

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Debit purchases
Credit payables

Will an increase in capital be a debit or a credit entry in the ledger account for capital?

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An increase in capital will be a credit entry in the capital account.

Will an increase in income be a debit or a credit entry in the ledger account for the income?

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An increase in income will be a credit entry in the income account.

Will an increase in a liability be a debit of a credit in the ledger account for the liability?

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An increase in a liability will be a credit entry in the liability account.

Will drawings be a debit or a credit entry in the drawings account?

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Drawings will be a debit entry in the drawings account.

Will an increase in an asset be a debit or a credit in the ledger account for the asset?

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An increase in an asset is a debit entry in the asset account.

Will an increase in an expense be a debit or a credit in the ledger account for the expense?

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An increase in an expense is a debit entry in the expense account.

What is meant by net assets?

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Net assets = total assets – total liabilities

What is the accounting equation?

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The increase in net assets = capital introduced + profit – drawings

What are non-current assets?

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Non-current assets are assets acquired on a long-term basis, not held for resale in the normal course of trading.

What are current assets?

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Current assets are assets which are expected to be realised in the normal course of trading.

What are current liabilities?

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Current liabilities are liabilities payable within 12 months of the reporting date.

What are non-current liabilities?

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Non-current liabilities are liabilities payable more than 12 months after the reporting date.

What is the definition of drawings (or withdrawals)?

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Drawings is anything taken from the business by a sole trader, whatever he/she chooses to call it.

What is the definition of capital?

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Capital is the amount due to the owner(s) of the business.

What is the separate entity concept?

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The business is treated as separate from its owners.

What is the definition of gross profit?

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The gross profit is the sales revenue less the cost of goods sold.

What is the definition of a liability?

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A liability is an item owed by the business.

What is the definition of an asset?

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An asset is an item owned by the business.

What does the Income Statement show?

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The revenues, expenses and profit or loss of the business – the financial performance of the business over a period of time.

What does the Statement of Financial Position show?

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The assets, liabilities and capital of the business – the financial position of the business at one point in time.

What user groups are interested in a company’s financial statements?

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* Management
* Investors and potential investors
* Employees
* Lenders
* Government agencies
* Suppliers
* Customers
* Competitors
* The public

What is a sole trader?

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A sole trader is a business owned and operated by one person


Comments

  1. avatar says

    A company with an accounting date of 31 October carried out a physical check of inventory on 4
    November 20X3, leading to an inventory value at cost at this date of $483,700.
    Between 1 November 20X3 and 4 November 20X3 the following transactions took place:
    1 Goods costing $38,400 were received from suppliers.
    2 Goods that had cost $14,800 were sold for $20,000.
    3 A customer returned, in good condition, some goods which had been sold to him in October for
    $600 and which had cost $400.
    4 The company returned goods that had cost $1,800 in October to the supplier, and received a
    credit note for them.
    What figure should appear in the company’s financial statements at 31 October 20X3 for closing
    inventory, based on this information?
    A $458,700
    B $505,900
    C $508,700
    D $461,500

    I don’t understand how the answer is D. i thought we must add purchases a less sales. .not add sales and less purchases

  2. avatar says

    Dear All
    any one who can assist on the following your help will be much appreciated.

    JOB, BATCH AND PROCESS COSTING F2

    Book Kaplan Revision Kits ( exam kit for Feb 2013 to Jan 2014)

    Number 122 calculation of normal loss , 10% which will be 1320 but they devided by 110.

    Number 125 this 75% used to calculate closing inventory how did they come with.

    Number 126 why they used production units instead of sales units

    Number 135 I’m not clear on this answer

    Number 136 figures for conversion costs,15 and 165.

  3. avatar says

    Dear all
    anyone who can help me on the following, your help will be much appreciated.

    F2 standard costing

    Book Revision kit Kaplan (exam kit FEB 2013 to JAN 2014)

    Number 227 why they divide 36000 by 10 multiply by 100, I thought to do like this 36000×10/100

    Number 230 I’m confuse of why they added 2000 as it was an adverse

    Number 236 I was trying to check how did they calculated 2.08

    Number 240 1250/2multiply by 98, I did like this 1250×2/100-1250

    Number 249 the figure of 1650

    Number 255 the figure of 29000

  4. avatar says

    Can some one please help me with these questions. I dont get the right answer:(:( Sir @Johnmoffat? Anyone asap plz.

    Q. Edwin owns 75% of Drood and sold goods to Drood for $19,200 during the year. The goods were sold at a mark-up of 25%.
    50% of these goods were still held by Drood at the year end.
    What is the amount of the provision for unrealised profit adjustment necessary for the consolidated accounts?
    Answer: $1,920

    Q. Closing inv = 386,400 as at sept 30 2008.
    The following items were included in this total at cost:
    1) 1,000 items which has cost $18 each. These items were all sold on October 2008 for $15 each, with selling expenses of $800.
    2) 5 items which has been in inventory since 1973 when they had been purchased for $100 each, were sold in October 2008 for $1,000 each, net of selling expenses.
    Which figure should appear in the company’s Statement of Financial Position at 30 September 2008 for inventory?

    Q. On 1 September 2011, Plaice Co was owed $132,000 by credit customers, During the year to 31 August 2012, credit sales totalled $1,470,480; discounts allowed totalled $8,400; irrecoverable debts totalled $1,920; and dishonoured cheques totalled $15,600.
    On 31 August 2012 the balance on Plaice Co’s receivables account was $150,120.
    What was the amount received from credit customers during the year ended 31 August 2012?
    i get the answer: $1,426,440 but the right answer is supposedly: $1,457,640

  5. avatar says

    I have problems with the suspense accounts and correction of errors, i even feel it contributed to me failing f3 three times. Anyone to seriously help me please. will be attempting f3 the fouth time now.

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