FA Chapter 2 Questions The Statement of Financial Position and Statement of Profit or Loss
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1 got 80% for this quick practice exam
I got 100% ,the questions are so beautiful.
It opened up my mind, I got 60%
Great 🙂
Nice, I got 4 out 5 correct answers! Thanks a bunch!
A quick question though, the first question, what does ‘closing net assets’ and ‘opening net assets’ mean? I can’t seem to understand this formula based off the notes.
Thanks again!
Please sir, for the question where we are to find the net profit as at 1 Feb 2007, why did we add drawings and less the profits?
The question asks for the net assets at the start of the year. We know the net assets at the end of the year and these are after adding the profit and subtracting the drawings. To find the net assets at the start of the year we therefore need to work backwards.
Thank you, sir.
You are welcome.
Yes I clearly didn’t read the question so I did it in reverse. Thanks for clarity and the reminder to read what is required
🙂
100%
Thanks for this.
Been having a meltdown on some of the more worded questions in the practice kits (across various chapters), with a lot of tricky questions to test my understanding. So took a couple of weeks to clear my head.
Do you recommend just going through them till I understand how to get the relevant information out of the question and know what to do with it.
Yes I do – the more questions you attempt the better 🙂
Yes I do – the more questions that you attempt the better 🙂
Got a 100, thx for the free Notes
🙂
Hello sir. Thanks
In question 2, why the fourth answer isn’t right? It do makes sense right?And why the first answer is correct? Please clear my doubt sir …
The choices appear in a different order every time you attempt the test, so I do not know which you got as the first and the fourth choices. If you state which choices you are referring to, then I will explain.
the question tricks your understanding of the topic.
seems examples and quiz are bit difference in terms of tricks given
otherwise thanks so much
In the real exam, the examiner always manages to think up new ‘tricks’ so as to check your understanding. Make sure that you have a Revision Kit from one of the ACCA Approved Publishers and that you practice all of the questions so as to get used to these ‘tricks’.
Sorry meant how number 2 is wrong?
Do you mean question 2? And what are you meaning is wrong?
hello sir. can you please explain queston no. 1?
Did you watch the free lectures on this chapter before attempting the test, because it is just rearranging the accounting equation.
The know that the increase in net assets = closing net assets less opening net assets = capital introduced + profit – drawings .
If subtract capital introduced from both sides and add drawing to both sides, we then have the profit.
I thought the quiz was refreshingly testing the grasp of the concepts. Really good
Thanks a lot
Hello sir,
How many maximum minutes could we take to solve the calculation problems within the quiz , during the exam ?
The drawing per month was a real distractor for me. That took away my time. Need to practice
I mean to say, how much maximum time should one take and not exceed per such big calculation questions during the exam ?
2 or 3 minutes per question.
Is book keeping control and the ledger same thing
Why are you asking that under a test of Chapter 2 of our lectures notes?
In future please ask questions in the Ask the Tutor Forum.
The word ‘ledger’ means book, and there are several different ledgers.
There is no such expression as ‘bookkeeping control’. You may be referring to control accounts in which case they are accounts in the general (nominal) ledger.
All of this is explained in my free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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.
How I can buy revision kit? I need it?
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.
Formula 1:
Increased in net assets = increased in capital
Formula 2:
Increase in Capital = Final Net Assets – Liabilities – Initial Net Assets
Substitute into formula 1 .
Increased in net assets = Final Net Assets – Liabilities – Initial Net Assets
We know the Increased in net asset is $3000 now .
Substitute $3000 into formula 3 .
Formula 3:
Increased in Net Assets = Capital Introduced + Profits – Drawing