Ffa Questions

PRATICE QUESTION FOR FFA

QUESTION 1

Which of the following are differences between sole traders and limited liability companies?

a sole traders financial statements are private, a company financial statements are sent to shareholders and are publicly field

only companies have capital invested into the business

a sole trader is fully and personally liable for any losses that the business might make: a company s shareholders are not personally liable for any losses that the company might make.

A 1 and 2 only

B 2 and 3 only

C 1 and 3 only

D 1,2 and 3

QUESTION 2

A grocery business has net assets of $64,800 at 31 January 2008 and the net profit for the year to 31 January 2008 was $30,600. on 31 august 2007 the proprietor introduce additional capital of $7,200. he also withdrew $960 per month and on 24 December 2007 withdrew goods amounting to $840

What were the net assets at 1 February 2007?

A $51,720

B $50,040

C $39,360

D $13,920

QUESTION 3

Details of a company insurance policy was shown below:

premium for the year ended 31 march 2008 paid April 2007 $25,920

premium for the year ended 31 march 2009 paid April 2008 $28,800

what figure should be included in the company s financial statements for the year ended 30 june 2008?

Income statement Statements of financial position

$ $

A 26,640 21,600 prepayment DR

B 28,080 21,600 prepayment DR

C 26,640 21,600 accrual CR

D 28,080 21,600 accrual CR

QUESTION 4

How should a contingent liability be included in a company financial statements if the likelihood of a transfer of economic benefits to settle it is remote?

A. Disclosed by note with no provision being made

B No disclosure of provision is required

QUESTION 5

On 1 January 2000 Krin co. bought a machine for $70,000. it was estimated that the machine useful life would be 7years and its residual value $7,000. two years later the useful life was revised to three remaining years and at 31 December 2003 the machine was sold...