The lectures are a complete free course. However it is vital that you buy a Revision Kit from one of the ACCA approved publishers. It is full of exam-standard questions for practice, and practice is essential for passing the exam.
It is because Revaluation Reserves cannot be paid out as dividends, as I explain in my lectures.
However, given that the excess depreciation reduces the gain on revaluation it does them become distributable and so it can be transferred to Revenue Reserves (which is distributable as dividend). However, it is not compulsory but the company can do this if they want to.
It is testing the accounting equation – did you watch the free lecture before attempting the test?
We know the profit for the year (30,600), we know the capital introduced (7,200), and we know the drawings ((12 x 960) + 840). So we can calculate in the increase in net assets over the year using the accounting equation.
Given that we know the net assets at the end of the year and we now know the increase over the year, we can now calculate what the net assets were at the start of the year.
Yes sir i have watched the lectures the thing which was confusing was that year of 2012 & little concept of opening & closing balance of Net asset calculation.
On the FA practice question 5, we are asked to calculate the profit for the year. But the answer given as the correct answer is the increased in net assets not taking the drawings and capital introduced into consideration. Please can you explain a little further?
Good day sir, thank you for this platform. With question 3, why did we have to add the drawings of year 2007 instead of subtracting it, as i got the point of subtracting capital introduced and net profit but i could’t explain why we didn’t subtract the entire drawings of 12,360 from that year?
It is because we are working backwards. We know the net assets at the end of the year and we are calculating what they were at the start of the year. Drawings reduce the net assets over the year and so the figure at the start of the year will have been higher than at the end of the year.
Hello Good evening opentuition i must really commend this site it is really helping a lot please i couldn’t find anywhere else to write this. I just took the FA practice EXAMS on here and I realized i couldn’t scroll down to see the remaining options as a lot of the question displayed just two options same with the section B i couldn’t answer any because I couldn’t see the open box to type in my answer it won’t scroll down. i guess its the new outlook because it has changed since when i last took this same practice exam. thank you and please help. Kind regards.
Hey. This is regarding the 4th question of FA practise questions for chapter 2. The answer was worked out as – (960 x 11) / 840 Why do we divide it by 840?
Sir, l need clarification regarding the explanation to the answering of question 3 of 5 of the FA chapter 2. The question was net asset as at February 1st and not January 1st , hence the withdrawals should be for 11 months i.e. 11 x $ 960 and not 12 x $960 please help clarify.
You are given the net assets at 31 January 2008 and asked to calculate the net assets at 1 February 2007. The accounting period is the 12 months from 1 February to 31 January.
Dear Sir, In the chapter 13 of FA notes, there are several examples given but in the answers to examples section, it says that there are no examples at all. This is a very big chapter. I hope you could find a way to send me the answers for the same as I am facing difficulty in solving these. You can mail the same to me at simranwasan2203@gmail.com.
I’m new to accounts..my teacher told me to study through this and I’m doing edexcel as(1st stage) do you have the basic accounts materials here..plz reply me if you have and send the link too
In future please ask this kind of question in the Ask the Tutor Forum – not as a comment on a practice test.
We provide free study material for the ACCA and CIMA examinations. ACCA Paper FA is basic accounting and applies to any exams. You can find out material by following the links to ACCA and then FA at the top of the page.
We have an online mock exam that is linked from the main Paper F3 page. However, you need more than 1 mock exam – you must buy a Revision Kit from one of the ACCA approved publishers. The Revision Kit contains mock exams, and also lots of exam-standard questions for practice (and practice is vital to passing the exam).
Hey john.. I have a question for you .. are these practise questions effective and sufficient to score a good marks in exams ?? Just asking you cause these questions seems to be easy 🙂
The questions are exam standard, but you need far more practice than we can provide here which is why you must buy a Revision Kit from one of the ACCA approved publishers. They contain lots of exam standard question to practice 🙂
Morning, Sir. Regarding F3 Chapter 2 Questions 5 of 5,
Q: On 1 July 2012 a business had net assets of $23,000. At 30 June 2013 they had total assets of $34,000 and total liabilities of $8,000. During the year the owner had introduced $2,000 more capital, and had taken drawings of $500 per month. What was the profit for the year ended 30 Jun 2013?
I would like to ask sir, how to solve this question. Thanks.
You need to use the accounting equation – you know the opening and closing net assets, you know the capital introduced and the drawings, so profit is the missing figure.
You should watch the free lectures before attempting the tests. The lectures are a complete free course for Paper F3 and cover everything needed to pass the exam well.
hi sir i would like to ask you a personal question that is, practicing more questions in open tuition and also practicing its mock exams several times could it help and support me to pass for sitting my f2 paper next week with high marks like 80 or 70 and above otherwise we found this site very helpful and thank you for being available eveytime
In future, please ask this sort of question in the Ask the Tutor Forum rather than as a comment on a test.
The more practice you get the better – there is also a practice exam on the ACCA website, and best of all is to use a Revision Kit from one of the ACCA approved publishers because they are full of practice questions.
Hello, I don’t understand the reasoning behind the solution of Question 1 and Question 3.
In Question – 1 : The correct answer had ‘Capital Introduced’ subtracted while the ‘Drawings’ were added, shouldn’t it be the other way around with drawings being subtracted and capital introduced treated as an addition ?
In Question – 3 : I did everything correctly but I subtracted Drawings ( Less : Withdrawal ) while the correct answer had (Add : Withdrawals). Isn’t Drawings something that owner withdraws from the business ? Then why isn’t it treated as a subtraction ?
they are both applications of the accounting equation: increase in net assets = capital introduced plus profit less drawings.
This is explained in full in the free lectures, and you should watch the lectures before attempting the tests. The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
I really feel regret that I didn’t know about this website earlier. I got to know about this website just a couple of weeks earlier from our management. Besides, I don’t have any basics on accounting and also I couldn’t understand my class lecturer. But now I just went through this two chapters and now on wards I’m feeling confident that I can do this exam better. All the credit goes to you Sir! Thank you for that.
This is a wonderful site to help students. A lot of time is required to find and read the notes and download the lectures.
I have the following suggestions: a. both readers and tutor time will be saved if the Lecture Notes and Lecture Videos can be downloaded by pressing a button b. the other interactive parts can be left as they are, e.g. the Mock Exam Questions, Quiz, etc.
There is a button for downloading the notes above each lecture, and they obviously only need downloading once. Lectures cannot be downloaded – they can only be watched online. That is the only way that we can keep this website free of charge. (You will find the same applies on paid for websites also)
Please Review question number 3 , you said that 960$ is withdrawn per month but haven’t given the period or specify it. ( ddoes it strt to withdraw from august or february, there is ambigiuty )
No – there is no ambiguity. He withdraws 980 per month. We are looking at the period from 1 February 2007 to 31 January 2008, which is 12 months. Unless the question said differently, you would assume it was 980 for each of the 12 months. (This was actually a past exam question)
If you click on F3 on the bar at the top of this page (underneath the red bar) then you will get a page listing all of our free resources for Paper F3.
If you scroll down the page you will find a button saying “View all F3 lectures” – if you click on it then you will get a page listing all of the lectures, including those for this chapter.
(The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.)
You need to use the accounting equation (I assume that you have watched my free lecture on this before attempting the test?)
You know that the profit is (30,600); you know what the capital introduced is (7,200); and you know what the drawings are (12 months at 960, plus 840, so a total of 23,360)
If you put these in the accounting equation then you will know the increase in net assets over the year. You know what the net assets are at the end of the year ((64,800) and so if you subtract the increase over the year you will have the net assets at the start of the year.
I don’t understand question 1. For example – OB – 10, Drawing – 5, Capital introduced – 10 and CB (obviously) – 15. If we use the formula above 15-5+10-10 = 0 but that’s not true because net profit = 10-5 e.g 5
If by OB and CB you mean opening net assets and closing net assets, the profit using your figures is certainly not 10 – 5!! The profit on your figure would be 0 because the increase in net assets using your figures is equal to the capital introduced minus the drawings.
I do not think you can have watched the free lectures before attempting the test, and I suggest that you do.
Have you watched the free lectures for this chapter of our lecture notes? (My lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.)
This is testing you on the accounting equation.
Increase in net assets = capital introduced + profit – drawings The net assets at the end of the year are 34,000 – 8,000 = 26,000. Therefore the increase in net assets = 26,000 – 23,000 = 3,000.
if I’m not mistaken didn’t you say in the lecture that the accounting equation was net assets =profit-drawings+capital introduced? can the equation be rearranged or is the correct format for the equation net assets = capital introduced + profit – drawings?
For a sole trader, the retained earnings at the start of the year are part of the total capital at the start of the year (retained earnings for a sole trader are not show separately). For a limited company (which is dealt with in later chapters) the retained earnings at the start of the year (together with the share capital and other reserves) are always equal to the net assets at the start of the year.
In either case, the change in the net assets over the year is only ever equal to any capital introduced during the year plus the profit for the year less the drawings for the year (or in the case of limited companies, the dividends paid in the year).
The ACCA does not release past exams, so I cannot give you a link.
Assuming that you have a Revision Kit from one of the approved publishers (as we recommend), then you will have more than enough exam standard questions to practice 🙂
The page is working fine – maybe it is something to do with either your computer or with your internet connection. Please ask on the support page (the link is above the comments) and admin should be able to help you.
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Thank you sir
a phenomenal master
for the exam is enough to learn just those thing that you taught us or does it need to study other course ?
again thank you sir
The lectures are a complete free course. However it is vital that you buy a Revision Kit from one of the ACCA approved publishers. It is full of exam-standard questions for practice, and practice is essential for passing the exam.
Dear sir. Can you explain why we DR. REV RESERVE AND CR RETAINED EARNINGS when we have excess depreciation.
Thank you
It is because Revaluation Reserves cannot be paid out as dividends, as I explain in my lectures.
However, given that the excess depreciation reduces the gain on revaluation it does them become distributable and so it can be transferred to Revenue Reserves (which is distributable as dividend). However, it is not compulsory but the company can do this if they want to.
Dear Sir John need some explanation & guidance to understand the question-3 of this test.
It is testing the accounting equation – did you watch the free lecture before attempting the test?
We know the profit for the year (30,600), we know the capital introduced (7,200), and we know the drawings ((12 x 960) + 840). So we can calculate in the increase in net assets over the year using the accounting equation.
Given that we know the net assets at the end of the year and we now know the increase over the year, we can now calculate what the net assets were at the start of the year.
Yes sir i have watched the lectures the thing which was confusing was that year of 2012 & little concept of opening & closing balance of Net asset calculation.
I hope that it is clear now.
On the FA practice question 5, we are asked to calculate the profit for the year. But the answer given as the correct answer is the increased in net assets not taking the drawings and capital introduced into consideration. Please can you explain a little further?
My question is for FA Chapter 2 practice question 5. Thank you.
The answer given is not the increase in net assets (maybe you didn’t scroll down the explanation).
We know the increase in net assets is 3,000. We know that the capital introduced is 2,000 and that the drawings are 12 x 500 = 6,000.
Therefore the profit = 3,000 – 2,000 + 6,000 = 7,000 (which is what is given as the correct answer).
Good day sir, thank you for this platform. With question 3, why did we have to add the drawings of year 2007 instead of subtracting it, as i got the point of subtracting capital introduced and net profit but i could’t explain why we didn’t subtract the entire drawings of 12,360 from that year?
It is because we are working backwards. We know the net assets at the end of the year and we are calculating what they were at the start of the year. Drawings reduce the net assets over the year and so the figure at the start of the year will have been higher than at the end of the year.
got all correct, thanks for a clarity of lectures
Thank you for your comment 🙂
Thank you for the exercises. Love it
Explaination and work out clear.
Thank you for your comment 🙂
Nice test, good explanation, thank you sir.
Thank you for your comment 🙂
Hello Good evening opentuition i must really commend this site it is really helping a lot please i couldn’t find anywhere else to write this. I just took the FA practice EXAMS on here and I realized i couldn’t scroll down to see the remaining options as a lot of the question displayed just two options same with the section B i couldn’t answer any because I couldn’t see the open box to type in my answer it won’t scroll down. i guess its the new outlook because it has changed since when i last took this same practice exam. thank you and please help. Kind regards.
hi,
maybe change the screen resolution?
the tests have not changed their look for few years
Took my time listening to all the lecture parts of this chapter. Now got all the questions right, yayyy.?
Great 🙂
Hurray, me too
I got everything right 😀
Well done 🙂
Hey.
This is regarding the 4th question of FA practise questions for chapter 2.
The answer was worked out as – (960 x 11) / 840
Why do we divide it by 840?
I assume that you actually mean question 3 🙂
The answer does not divide anything by 840 !! (And you would realise this if you checked the total for withdrawals of 12,360)
If you look carefully, the total drawings are (960 x 12) + 840.
(960 is multiplied by 12 (not 11) because there are 12 months in the year, and then 840 is added because of the inventory taken).
Sir, l need clarification regarding the explanation to the answering of question 3 of 5 of the FA chapter 2. The question was net asset as at February 1st and not January 1st , hence the withdrawals should be for 11 months i.e. 11 x $ 960 and not 12 x $960 please help clarify.
The answer is correct.
You are given the net assets at 31 January 2008 and asked to calculate the net assets at 1 February 2007. The accounting period is the 12 months from 1 February to 31 January.
Thank you
You are welcome 🙂
Dear Sir,
In the chapter 13 of FA notes, there are several examples given but in the answers to examples section, it says that there are no examples at all. This is a very big chapter. I hope you could find a way to send me the answers for the same as I am facing difficulty in solving these.
You can mail the same to me at simranwasan2203@gmail.com.
I’m new to accounts..my teacher told me to study through this and I’m doing edexcel as(1st stage) do you have the basic accounts materials here..plz reply me if you have and send the link too
In future please ask this kind of question in the Ask the Tutor Forum – not as a comment on a practice test.
We provide free study material for the ACCA and CIMA examinations. ACCA Paper FA is basic accounting and applies to any exams.
You can find out material by following the links to ACCA and then FA at the top of the page.
sir john how can get f3 mock exam?
We have an online mock exam that is linked from the main Paper F3 page. However, you need more than 1 mock exam – you must buy a Revision Kit from one of the ACCA approved publishers. The Revision Kit contains mock exams, and also lots of exam-standard questions for practice (and practice is vital to passing the exam).
Well Done. Sir
Thank you for your comment 🙂
Hey john..
I have a question for you ..
are these practise questions effective and sufficient to score a good marks in exams ??
Just asking you cause these questions seems to be easy 🙂
The questions are exam standard, but you need far more practice than we can provide here which is why you must buy a Revision Kit from one of the ACCA approved publishers. They contain lots of exam standard question to practice 🙂
Ok thanks for your suggestion… i wil get one 🙂
Great 🙂
It was so easy! yayy! 😀 Hope the exam be like this! I doubt it tho! :/
Well it is only chapter 2 🙂
Morning, Sir.
Regarding F3 Chapter 2 Questions 5 of 5,
Q: On 1 July 2012 a business had net assets of $23,000.
At 30 June 2013 they had total assets of $34,000 and total liabilities of $8,000.
During the year the owner had introduced $2,000 more capital, and had taken drawings of $500 per month.
What was the profit for the year ended 30 Jun 2013?
I would like to ask sir, how to solve this question.
Thanks.
You need to use the accounting equation – you know the opening and closing net assets, you know the capital introduced and the drawings, so profit is the missing figure.
You should watch the free lectures before attempting the tests. The lectures are a complete free course for Paper F3 and cover everything needed to pass the exam well.
Thanks sir!
I will try again.
Sorry for late reply.
Thanks.
You are welcome 🙂
hi sir
i would like to ask you a personal question
that is, practicing more questions in open tuition and also practicing its mock exams several times
could it help and support me to pass for sitting my f2 paper next week
with high marks like 80 or 70 and above
otherwise we found this site very helpful and thank you
for being available eveytime
In future, please ask this sort of question in the Ask the Tutor Forum rather than as a comment on a test.
The more practice you get the better – there is also a practice exam on the ACCA website, and best of all is to use a Revision Kit from one of the ACCA approved publishers because they are full of practice questions.
Hi
i am not able to start the question because the start quiz button dosent appear ?
could you help me ?
Please ask on the support page – then admin might be able to help you.
(The link is above)
Thank you john, Appreciate your prompt respose
You are welcome 🙂
Thanks Mr John!!! Your lectures,practice questions was a great help for me!!!
I sat my F3 paper on 13/7 and i pass it. Can’t do it without you again.
Thank you for the comment, and many congratulations on passing 🙂
Hello, I don’t understand the reasoning behind the solution of Question 1 and Question 3.
In Question – 1 : The correct answer had ‘Capital Introduced’ subtracted while the ‘Drawings’ were added, shouldn’t it be the other way around with drawings being subtracted and capital introduced treated as an addition ?
In Question – 3 : I did everything correctly but I subtracted Drawings ( Less : Withdrawal ) while the correct answer had (Add : Withdrawals). Isn’t Drawings something that owner withdraws from the business ? Then why isn’t it treated as a subtraction ?
The pop-up answers to both questions are correct.
they are both applications of the accounting equation: increase in net assets = capital introduced plus profit less drawings.
This is explained in full in the free lectures, and you should watch the lectures before attempting the tests. The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
I really feel regret that I didn’t know about this website earlier. I got to know about this website just a couple of weeks earlier from our management. Besides, I don’t have any basics on accounting and also I couldn’t understand my class lecturer. But now I just went through this two chapters and now on wards I’m feeling confident that I can do this exam better. All the credit goes to you Sir! Thank you for that.
Thanks you for your comment.
This is a wonderful site to help students. A lot of time is required to find and read the notes and download the lectures.
I have the following suggestions:
a. both readers and tutor time will be saved if the Lecture Notes and Lecture Videos can be downloaded by pressing a button
b. the other interactive parts can be left as they are, e.g. the Mock Exam Questions, Quiz, etc.
There is a button for downloading the notes above each lecture, and they obviously only need downloading once.
Lectures cannot be downloaded – they can only be watched online. That is the only way that we can keep this website free of charge. (You will find the same applies on paid for websites also)
Very helpful questions. Thnkyou Sir! 🙂
Please Review question number 3 , you said that 960$ is withdrawn per month but haven’t given the period or specify it. ( ddoes it strt to withdraw from august or february, there is ambigiuty )
No – there is no ambiguity.
He withdraws 980 per month. We are looking at the period from 1 February 2007 to 31 January 2008, which is 12 months.
Unless the question said differently, you would assume it was 980 for each of the 12 months.
(This was actually a past exam question)
Hi, I tried to watch your free lectures for this chapter, but I couldn’t reach it! please provide the link
If you click on F3 on the bar at the top of this page (underneath the red bar) then you will get a page listing all of our free resources for Paper F3.
If you scroll down the page you will find a button saying “View all F3 lectures” – if you click on it then you will get a page listing all of the lectures, including those for this chapter.
(The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.)
Thank you very much, very helpful for revision.
You are welcome 🙂
can you please tell me how to solve question number 3?
You need to use the accounting equation (I assume that you have watched my free lecture on this before attempting the test?)
You know that the profit is (30,600); you know what the capital introduced is (7,200); and you know what the drawings are (12 months at 960, plus 840, so a total of 23,360)
If you put these in the accounting equation then you will know the increase in net assets over the year.
You know what the net assets are at the end of the year ((64,800) and so if you subtract the increase over the year you will have the net assets at the start of the year.
hi I do not understand question number 3. Can you please explain Thanks a lot.
But I have explained in my previous reply!
Have you watched my free lectures on the accounting equation?
Thank you sir
You are welcome 🙂
I don’t understand question 1. For example – OB – 10, Drawing – 5, Capital introduced – 10 and CB (obviously) – 15. If we use the formula above 15-5+10-10 = 0 but that’s not true because net profit = 10-5 e.g 5
If by OB and CB you mean opening net assets and closing net assets, the profit using your figures is certainly not 10 – 5!! The profit on your figure would be 0 because the increase in net assets using your figures is equal to the capital introduced minus the drawings.
I do not think you can have watched the free lectures before attempting the test, and I suggest that you do.
I’m sorry for the stupid question. I thought for net assets instead net profit…that’s my mistake. Thanks for helping.
No problem 🙂
Hello, sir
Please help me and explain to me question quiz No.5. i have not understood.
Thanks
Have you watched the free lectures for this chapter of our lecture notes? (My lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.)
This is testing you on the accounting equation.
Increase in net assets = capital introduced + profit – drawings
The net assets at the end of the year are 34,000 – 8,000 = 26,000. Therefore the increase in net assets = 26,000 – 23,000 = 3,000.
Therefore, using the accounting equation:
3,000 = 2,000 + profit – (12 x 500) = 2,000 + profit – 6,000 = profit – 4,000
Therefore profit = 3,000 + 4,000 = 7,000
good day Sir
if I’m not mistaken didn’t you say in the lecture that the accounting equation was net assets =profit-drawings+capital introduced?
can the equation be rearranged or is the correct format for the equation net assets = capital introduced + profit – drawings?
Of course it can be re-arranged any way you want!!
The two equations you typed are both exactly the same, it is very basic algebra 🙂
Thank you.
You are welcome 🙂
Can we treat retained earnings as a profit on accounting equation concept?
No.
For a sole trader, the retained earnings at the start of the year are part of the total capital at the start of the year (retained earnings for a sole trader are not show separately).
For a limited company (which is dealt with in later chapters) the retained earnings at the start of the year (together with the share capital and other reserves) are always equal to the net assets at the start of the year.
In either case, the change in the net assets over the year is only ever equal to any capital introduced during the year plus the profit for the year less the drawings for the year (or in the case of limited companies, the dividends paid in the year).
Thanks
You are welcome 🙂
I have attempt this question many times, eventually I got it that “Net Asset= Closing Net Asset- Opening Net Asset”, am I right? anyone can help me?
You do not say which question!
And no – you are not right.
The increase in net assets = closing net assets – opening net assets.
(Have you watched my free lectures on this? Our lectures are a complete free course.)
Thank you very much
You are welcome 🙂
How to study f3 plzz any one can help me or suges me.
Our free lectures are a complete course for Paper F3.
If I had you as my Tutor from few years back would have been a PwC senior partner by now. 🙂
Thank you 🙂
I need link F3 past exam
thanks
The ACCA does not release past exams, so I cannot give you a link.
Assuming that you have a Revision Kit from one of the approved publishers (as we recommend), then you will have more than enough exam standard questions to practice 🙂
am enjoying this
🙂
nycc
thank you for this questions.
You are welcome 🙂
Thank you)
You are welcome 🙂
When pressing start nothing comes.
nice
Good! 🙂
This is very nice for quick revision.
I appreciate.
Thanks
You are welcome 🙂
Hie Mr John ….may you help me,Im not receiving the mock exam l only see a blank page
The page is working fine – maybe it is something to do with either your computer or with your internet connection.
Please ask on the support page (the link is above the comments) and admin should be able to help you.