AAT LEVEL 3 – DIPLOMA IN ACCOUNTING Advanced...
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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
4 Mock Exam 2016/17 – Solutions
(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.
Mock Exam 2016/17 – Solutions 5
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
£ £
01/01/X9 Prepaid income 7,880
Rent receivable
£ £
01/01/X8 Prepaid income 7,880
Rent receivable
£ £
01/01/X9 Prepaid income 7,880
6 Mock Exam 2016/17 – Solutions
(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.
Mock Exam 2016/17 – Solutions 7
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
8 Mock Exam 2016/17 – Solutions
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
Mock Exam 2016/17 – Solutions 9
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
10 Mock Exam 2016/17 – Solutions
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.
Mock Exam 2016/17 – Solutions 11
12 Mock Exam 2016/17 – Solutions
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