aat level 3 – diploma in accounting advanced...

Mock Exam 2016/17 – Solutions

AAT LEVEL 3 – DIPLOMA IN ACCOUNTING

Advanced Bookkeeping

Mock Exam

For exams in 2016/17

Solutions

2 Mock Exam 2016/17 – Solutions

Task 1 Complete the extract from the non-current assets register below for:

(a) Any acquisitions of non-current assets during the year ended 31 December 20X9

(b) Any disposals of non-current assets during the year ended 31 December 20X9

(c) Depreciation for the year ended 31 December 20X9.

Extract from non-current assets register

Description / Serial

Number

Acquisition date

Cost £

Depreciation charges

£

Carrying amount

£

Funding method

Disposal proceeds

£

Disposal date

Computer equipment

3 desk top PCs

21/06/X8 3,200.00 Loan

Year end 31/12/X8

800.00 2,400.00

Year end 31/12/X9

800.00 1,600.00

5 printers 01/01/X7 4,000.00 Cash

Year end 31/12/X7

1,000.00 3,000.00

Year end 31/12/X8

1,000.00 2,000.00

Year end 31/12/X9

1,000.00 1,000.00

Laptop HG589

23/12/X9 2,550.00

Year end 31/12/X9

637.50 1,912.50 Loan

Vehicles

Van AP 07 SCE

01/02/X7 20,000.00 Part

exchange

Year end 31/12/X7

6,600.00 13,400.00

Year end 31/12/X8

4,422.00 8,978.00

Year end 31/12/X9

Nil Nil 8,000.00 07/12/X9

Mock Exam 2016/17 – Solutions 3

Task 2 (a) Calculate the depreciation charge for the year on the new machine.

£1,750

Make entries to account for:

(b) The purchase of new machine

(c) The depreciation charge on the new machine On each account, show clearly the balance carried down or transferred to the profit or loss account in the general ledger, as appropriate.

Machine at cost

£ £

Balance b/d 65,000 Balance c/d 75,000

Bank 10,000

75,000 75,000

Depreciation charges

£ £

Balance b/d 5,700 Profit or loss account 7,450

Machine accumulated depreciation

1,750

7,450 7,450

Machine accumulated depreciation

£ £

Balance c/d 30,750 Balance b/d 29,000

Depreciation charges 1,750

30,750 30,750


(d) What were the sale proceeds of the machine? Ignore VAT.

£3,690

(e) Indicate whether the following statements are true or false.

True

False

The non-current asset register is part of the general ledger.

VAT which is reclaimable on a non-current asset is not capitalised as part of the cost of the asset.


Task 3 (a) Which of the following shows how the general ledger account for rent receivable looked at the

beginning of the financial year? Tick the correct answer.

Rent receivable

£ £

01/01/X8 Prepaid income 7,880

Rent receivable

£ £


Rent receivable

£ £


Rent receivable

£ £



(b) Complete the following statement:

On 31/12/X9, the rent receivable account shows an adjustment for prepaid

income of £8,600 debit.

Picklist: accrued, credit, debit, prepaid

(c) Calculate the rent receivable to be shown in the statement of profit or loss for the year ended 31/12/X9.

£55,280

(d) Update the travel expenses account for this, showing clearly the balance to be carried down.

Travel expenses

£ £

Bank 4,350 Balance b/d 1,560

Balance c/d 2,790

4,350 4,350

(e) Complete the following statement:

An adjustment of £420 needs to be made, which will

decrease the travel expenses for the year ended 31/12/X9.


Task 4 (a) Using all the information given below and the figures given in the table, enter amounts in the

appropriate trial balance columns for the accounts shown.

Extract from the trial balance as at 31 December 20X9

Ledger balances

Trial balance

Account £ £ Dr £ Cr

Capital 50,000 50,000

Discounts allowed 1,115

Discounts received 624

Office costs 7,378

Prepaid expenses 409

Prepaid income 445

Property, plant and machinery 150,000 150,000

Payables ledger control 44,800 44,800

Sundry income 8,412

VAT 1,342

(b) Use the following table to show the THREE adjustments you need to make to the purchases ledger control account.

Adjustment Amount

£ Debit

Credit

Adjustment for (1) 58

Adjustment for (4) 9,000

Adjustment for (6) 600


Task 5 (a) Entries need to be made for an irrecoverable debt of £208.

Journal

Debit

£ Credit

£

Irrecoverable debts adjustment 208

Sales ledger control account 208

(b) A discount of £247 was received from a supplier. The correct entry was made to the purchases

ledger control account but no other entries were made.

Journal

Debit

£ Credit

£

Suspense 247

Discounts received 247

(c) No entries have been made for closing inventory for the year ended 31 December 20X9. Closing

inventory has been valued at cost at £14,625. Included in this figure are some items costing £950 that will be sold for £235.

Journal

Debit

£ Credit

£

Closing inventory – statement of financial position 13,910

Closing inventory – statement of profit or loss 13,910

(d) When the sales day book was totalled at the end of December, it amounted to £8,731. The correct entry was made to the sales ledger control account but the sales account was credited with £7,831.

Journal

Debit

£ Credit

£

Suspense 900

Sales 900


Task 6

(a)

Extended trial balance

Ledger account Ledger balances Adjustments Statement of profit or loss

Statement of financial position

Dr £ Cr £ Dr £ Cr £ Dr £ Cr £ Dr £ Cr £

Allowance for doubtful debts

2,185 580 2,765

Allowance for doubtful debts adjustment

580 580

Bank 69,748 69,748

Capital 15,400 15,400

Closing inventory 24,000 24,000

Cost of goods sold 229,200 24,000 205,200

Depreciation charges 9,870 9,870

Discounts allowed 2,900 300 3,200

Discounts received 1,800 1,800

Drawings 6,800 150 6,950

Machinery at cost 43,800 43,800

Machinery accumulated depreciation

24,250 9,870 34,120

Premises rental 28,000 1,700 26,300

Purchases ledger control account

32,900 32,900

Sales 408,000 408,000

Sales ledger control account

39,560 39,560

Sundry (admin) expenses 49,800 49,800

Suspense 1,400 1,700 300

VAT 12,873 12,873

Wages expense 29,000 150 28,850

Profit for the year 86,000 86,000

498,808 498,808 36,600 36,600 409,800 409,800 184,058 184,058


This task is to test your knowledge. Choose ONE answer from each part.

(b) Why do businesses keep a subsidiary purchases ledger? Choose the ONE most suitable reason:

To summarise the total purchases for the business.

To show how much suppliers are owed in total.

To show how much each individual supplier is owed.

To enable the production of individual supplier statements.

(c) Why are bank reconciliations performed?

They are required by accounting standards.

So the business can check the accuracy of the bank statement.

So the business can check the accuracy of its cash book.

To ensure suppliers are paid the correct amount.

(d) Of the following, which ONE provides the best example of an application of the accruals concept?

Providing for a doubtful debt which a credit customer may be unable to pay. Classifying the legal costs incurred on the purchase of a non-current asset as part of the cost of the item.

Including repairs expenditure incurred in the year in the financial statements, even though an invoice has not yet been received from the contractor.

Classifying the bank overdraft as a current liability and not a current asset.


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