(原)金融专业英语(FECT)中级会计模拟试卷1(题后含答案及解析)

（原）金融专业英语（FECT）中级会计模拟试卷1(题后含答案及解
析)
题型有：1. SECTION ONE 2. SECTION TWO
SECTION ONE Answer all questions in this section.
Question 1
1．For purpose of recording accounting information, each company is considered to be separate from its owners and all other companies. This concerns the entity concept.
A．正确
B．错误
正确答案：A
2．In an inflation economy, the inventory ending balance recorded by FIFO method is lower than that recorded by LIFO method.
A．正确
B．错误
正确答案：B
解析：In an inflation economy, the inventory ending balance recorded by FIFO method is higher than that recorded by LIFO method.
3．If the purchaser has been given a purchase allowance, the amount of allowance should be debited to purchase return account.
A．正确
B．错误
正确答案：B
解析：If the purchaser has been given a purchase allowance, the amount of allowance should be credited to purchase return account.
4．In long-term construction contracts, revenue is recognized at the point of the cash collected.
A．正确
B．错误
正确答案：B
解析：In long-term construction contracts, revenue is recognized in proportion to
the contract work performed each year.
5．In business charges depreciation in accounts, the accounting concept to be considered is the materiality concept.
A．正确
B．错误
正确答案：B
解析：In business charges depreciation in accounts, the accounting concept to be considered is the going concern concept.
6．Cumulative preference shares have the right to accumulate dividends in a given year if they are in arrears.
A．正确
B．错误
正确答案：A
Question 2
7．If retained earnings were understated and liabilities were overstated, which of the following errors could have been the cause?
A．Making the adjustment entry for depreciation expenses twice.
B．Failure to record interest accrued on a note payable.
C．Failure to make the adjusting entry to record revenue which had been earned but not yet billed to clients.
D．Failure to record the earned portion of fees received in advance.
正确答案：D
8．The selected data pertain to a company at 31 December 2003 as the following:Quick Assets ＄208,000Quick ratio 2.6 to 1Current ratio 3.5 to 1Net sales for 2003 ＄1,800,000Cost of good sold for 2003 ＄990,000Average total assets for 2003 ＄1,200,000The company’s inventory balance at 31 December 2003 is ______.
A．＄72,000.
B．＄186,990.
C．＄231,111.
D．＄68,000.
正确答案：A
9．An accrued expense can best be described as an amount ______.
A．paid and currently matched with earnings.
B．paid and not currently matched with earnings.
C．not paid but currently matched with earnings.
D．None of the above.
正确答案：C
10．Mr. Wong paid ＄3,000 in advance for insurance on 1 December 2001 and debited it to Insurance Expense. No entries were made subsequently in 2001 or in 200The accounting period ends on December 3As a result of this error ______.
A．2001 income was understated ＄2,000.
B．2002 income was understated ＄2,000.
C．2001 income was understated ＄3,000.
D．2002 income was understated ＄3,000.
正确答案：A
11．Mr. Ting’s net cash inflow from operating activities for the year ending 30 June is＄123,000. The following adjustments were included in the supplementary schedule reconciling cash flow from operating activities with net income:Depreciation ＄38,000Increase in net accounts receivable 31,000Decrease inventory 27,000Increase in accounts payable 48,000Increase in interest payable 12,000Net income is ______.
A．＄29,000.
B．＄41,000.
C．＄79,000.
D．＄217,000.
正确答案：A
12．Which of the following is not a characteristic of the accounting for non-trading organizations?
A．They normally provide Receipts and Payments Accounts.
B．They have Accumulated Fund, which is more or less the same as capital.
C．It is more common to keep all records on a single entry basis.
D．They must keep books on a double-entry system.
正确答案：D
13．Mr. Wong is a small company. And it failed to record every transaction. Now you are provided with the following information: capital at 1 January 2003 is ＄30,000, capital at 31 December 2003 is ＄31,000. During 2003, drawings are ＄2,000. Then the net profit for the year 2003 is ______.
A．＄3,000.
B．＄-1,000.
C．＄1,000.
D．＄-3,000.
正确答案：A
14．At the beginning of a given period, Mr. Ting’s inventory was all finished goods. The volume is 600. At file end of this period, 2,000 are completed units and 600 are partly completed. The partly completed units were deemed to be 50% complete. The manufacturing cost is ＄30,000. Then cost per unit is ______.
A．＄17.64
B．＄13.04
C．＄10.34
D．＄15
正确答案：A
15．Basic accounting assumptions include the following except ______.
A．going concern.
B．monetary unit.
C．consistency.
D．business entity.
正确答案：C
16．At 1 January 2003, the balance of Billy Company’s Provision for Bad Debts is ＄5,000. At 31 December 2003, the balance of trade debtors is ＄45,000. Billy Company’s provision for bad debts equals to 10% of trade debtors. During the year 2003, the bad debt written off is＄2,000. Then Bad Debt expenses of Billy Company this year must be ______.
A．＄2,500.
B．＄1,500.
C．＄-1,500.
D．＄-2,500.
正确答案：B
Question 3
17．As at 31 December Year 8, Sam Ltd’s cash book showed a debit balance of ＄1,055, although he had an overdraft of ＄3,511. The discrepancy is due to the following:—Bank interest of ＄10 had been included in the bank statement, but was not recorded in the cash book.—A cheque for ＄2,300 was banked on 28 December and correctly entered in the cash book. Unfortunately the customer had forgotten to sign the cheque and it was subsequently dishonored and returned by the bank on 31 December. The book-keeper recorded the return in the cash book on 3 January Year 9.
—The bank had incorrectly deducted ＄907 from Sam’s account for a cheque drawn by May.—A refund of ＄85 received from a supplier and banked on 2 October had been recorded in the cash book as a receipt of ＄58.—A cheque for ＄450 issued on 29 December as a refund to a customer had been recorded as a receipt in the cash book. It has not been presented for payment by 31 December.—The book-keeper had intended to desposit ＄2,750 in the bank on 31 December and therefore recorded it as a receipt in the cash book on that date. Due to a delay, the amount was not banked until 3 January Year 9.—An amount of ＄350 paid directly into the bank by a customer had not been recorded in the cash book.—The cash book receipts had been undercast by ＄800.Required:(a)Calculate the corrected cash book balance on 31 December Year 8.(b)Prepare a bank reconciliation statement for Sam showing the bank overdraft which appeared on his bank statement on that date.
正确答案：(a)Corrected Cash Book Balance:＄＄Original balance 1,055Add: Refund wrongly entered 27Direct banking 350Undercasting 800 1,1772,232Less: Bank interest 10Dishonored cheque 2,300Entered on wrong side 950Not deposited 2,750 6,0103,778 O/D(b)Bank Reconciliation Statement as at 31 December Year 8:＄＄Balance per bank statement 3,511 O/DLess: Unpresented chequesNovember 190December 450 6402,871 O/DAdd: Error by bank 9073,778 O/D
Question 4
18．1. Ming’s Company produces CD appliances. The following is the cost information for the year ended 31 December 2003.1. Material put into production was valued at ＄360,000 and ＄80,000 of which was used as supplies.2. The payroll records showed that total labor cost was ＄350,000, ＄68,000 of which was the costs of foremen and storekeeping men.3. Factory power and utilities were at a total cost of ＄90,000.4. Selling and administration expenses totaled ＄100,000.5. There was no opening and closing work-in-progress. The production records indicated that 20,000 units were completed in the year.Required:Calculate the following:(a)Prime cost(b)Conversion cost(c)Cost of goods manufactured(d)Unit production cost
正确答案：(a)Prime cost =＄(360,000-80,000)+＄(350,000-68,000) =＄562,000(b)Conversion cost =＄(350,000-68,000)+＄80,000+＄68,000+＄90,000=＄520,000(c)Cost of goods manufactured =＄(360,000-80,000)+＄520,000 =＄800,000(d)Unit production cost = Cost of goods manufactured / completed units= ＄800,000 / 20,000 = ＄40 per unit
Question 5
19．Mr. Wong is a small manufacturer of bicycles in Hong Kong. His business incurred the following costs for the year ended 31 December 2003.＄Materials (100% variable) 300,000Labor (25% variable) 200,000Selling & distribution cost (20% variable) 50,000Other costs (fixed) 170,000 720,000Normally, the business sells
3,000 units at ＄300 each:Required:(a)Calculate the breakeven point in units and dollar sales.(b)Calculate the contribution to sales ratio.(c)Calculate the margin of safety in percentage.
正确答案：(a) Total variable costs:＄Materials 300,000Labor (＄200,000×25%) 50,000Selling & distribution cost (＄50,000×20% ) 10,000360,000Variable cost per unit =＄360,000 / 3,000 =＄120Contribution per unit =Selling price - Variable cost =＄300 -＄120 =＄180Breakeven point (in units) = Fixed cost / Contribution per unit= (＄200,000×75% +＄50,000×80% +＄170,000)/＄180= ＄360,000/＄180= 2,000 unitsBreakeven point (dollars sales) = Breakeven units ×Selling price per unit= 2,000×＄300= ＄600,000(b) the contribution to sales ratio = ＄180 / ＄300×100% = 60%(c) the margin of safety = (Current sales - breakeven sales) / Current sales×100%= (3,000×＄300-＄600,000)/＄900,000×100%= 33.3%
Question 6
20．If a company had 120,000, 4% preference shares of ＄1 each and 250,000 ordinary shares of ＄1 each, then the dividends would be payable as follows:Year 1 Year 2 Year 3 Year 4 Year 5＄＄＄＄＄Total Profits appropriated for dividends 7,000 3,000 20,000 4,000 5,000Required:(a)If the preference shares are cumulative, non-participating, calculate the preference dividends and ordinary dividends in each year.(b)If the preference shares are cumulative, participating, calculate the preference dividends and ordinary dividends in each year.
正确答案：(a)If the preference shares are cumulative, non-participatingYear 1 Year 2 Year 3 Year 4 Year 5＄＄＄＄＄Preference Dividends (4%) 4,800 3,000 6,600 4,000 5,000Ordinary Dividends 2,200 —13,400 ——(b)If the preference shares is cumulative, participatingYear 1 Year 2 Year 3 Year 4 Year 5＄＄＄＄＄Preference Dividends (4%) 4,800 3,000 1,800 4,000 200(4%) (2.5%) (in arrears) (3.33%) (in arrears)4,800 4,800(4%) (4%)1,103 —(0.92%) 5,0005,903Ordinary Dividends 2,200 —10,000 ——(0.88%) (4%)2,297(0.92%)12,297
SECTION TWO Answer any two questions in this section.
Question 7
21．After the first year of trading, Mr. Wong provided you the following list of ledger balances as at 31 December 2003:＄Stock, 1 January 2003 3,300Stock, 31 December 2003 25,200Sales 160,000Purchases 100,000Premises 142,600Fixtures & Fittings 45,200Motor Vehicles 42,500Returns Inwards 1,500Returns Outwards 2,600Carriage Inwards 1,000Carriage Outwards 250Debtors 30,500Creditors 41,500Wages 17,495Rent and Rates 3,900Lighting & Heating 18,455Insurance 10,600Motor Vehicle Expenses 2,400Cash at Bank 4,700Bank Loan 29,000Loan
Interest 2,300Drawing 6,400You are further given the following information:1.Wages owing are ＄550.2.Prepaid rent is ＄600.3.Depreciation of Fixtures & Fittings is 10% per annum on cost.4.Depreciation of Premises is based on a 10-year lease.5.Depreciation of Motor Vehicles is 50% life using the reducing balance method.6.Stock taken for Mr. Wong’s own use is ＄1,100. Such a transaction has not yet been recorded.7.It is estimated that one-third of the driving time is for private purposes.8.5% of the outstanding accounts at the year end is thought to be uncollectible.9.There was no error made in the recording of business transactions for the year.Required:(a)Prepare a Trading and Profit and Loss Account for the year ended 31 December 2003.(b)Prepare a Balance Sheet as at 31 December 2003.(c)Explain the meaning and the significance of Working Capital.
正确答案：(a) Mr. Wong’s BusinessTrading and Profit and Loss Account for the year ended 31 December 2003＄＄＄Sales 160,000Less: Returns inwards 1,500Net sales 158,500Less: Cost of goods soldOpening stock 3,300Purchases 100,000Carriage inwards 1,000101,000Less: Returns outwards 2,60098,400Less: Stock drawing 1,100 97,300100,600Less: Closing stock 25,200 75,400Gross Profit 83,100Less: ExpensesWages (17,495 + 550) 18,045Rent and Rates (3,900-600) 3,300Lighting & Heating 18,455Insurance 10,600Motor Vehicle Expenses (2,400×2/3) 1,600Loan Interest 2,300Carriage Outwards 250Bad debts 1,525Depreciation:—Premises (142,600×1/10) 14,260—Fixtures & Fittings (45,200×10%) 4,520—Motor Vehicle (42,500×50%) 21,250 96,105(13,005)(b) Mr. Wong’s BusinessBalance Sheet as at 31 December 2003＄＄＄Cost Dep NBVFixed AssetsPremises 142,600 14,260 128,340Fixtures & Fittings 45,200 4,520 40,680Motor vehicles 42,500 21,250 21,250230,300 40,030 190,270Current AssetsStock 25,200Debtors 30,500Less: Provision for bad debts 1,525 28,975Prepaid rent 600Cash at bank 4,70059,475Less: Current LiabilitiesCreditors 41,500Accrued wages 550 42,050Net Current Assets 17,425Total Net Assets 207,695Represented ByCapital (Workings 1) 200,000Less: Net Loss 13,005186,995Less: Drawings (6,400+1,100+1/3×2,400) 8,300178,695Bank loan 29,000207,695Workings 1: The initial capital contributed by Mr. Wong is determined by drawing up the following trial balance:Dr Cr＄＄Stock 3,300Sales 160,000Purchases 100,000Premises 142,600Fixtures & Fittings 45,200Motor Vehicles 42,500Returns Inwards 1,500Returns Outwards 2,600Carriage Inwards 1,000Carriage Outwards 250Debtors 30,500Creditors 41,500Wages 17,495Rent and Rates 3,900Lighting & Heating 18,455Insurance 10,600Motor Vehicle Expenses 2,400Cash at Bank 4,700Bank Loan 29,000Loan Interest 2,300Drawings 6,400Capital (Balance Figure) _____ 200,000433,100 433,100(c) Working capital is defined as the excess of current assets over current liabilities. It is one of the important financial indicators of the liquidity position of a business entity. A positive working capital position means that a business is able to manage its affairs to such a state that current assets are sufficiently ready to meet the requirement of settling the debts which are to be due within one year. In other words, a business is to be solvent in the short term if there is a positive working capital. This indicates that the liquidity position of a business is financially sound.
However, a positive working capital does not necessarily indicate that the business is solvent in the long term or in a forced liquidation.
Question 8
22．The following are the summarized financial statements of Mr. Wong’s business for the years ended 31 December 2002 and 2003 respectively.Balance Sheets as at 31 December2002 2003＄＄Fixed Assets (net book value) 22,500 18,000Current Assets:Stock 10,500 27,000Debtors 18,000 54,000Bank 1,500 —Current liabilities:Creditors (9,000) (22,500)Bank overdraft —(15,000) 43,500 61,500Capital at 1 January 18,000 43,500Net Profit for the year 45,000 52,500Drawings (19,500) (34,500) 43,500 61,500Profit and Loss AccountSales 180,000 300,000Cost of sales 120,000 225,000Gross profit 60,000 75,000Operating expenses 15,000 22,500Net profit 45,000 52,500Additional information is given as follows:1. All sales were on credit basis.2. There were no purchase or disposals of fixed assets during the year.3. The stock value and debtor balance as at 31 December 2001 were ＄15,000 and ＄30,000 respectively.Required:(a)Calculate the following financial ratios for years both 2002 and 2003:(i)Gross profit margin(ii)Net profit margin(iii)Return on capital employed(iv)Current ratio(v)Acid test ratio(vi)Stock turnover period (days)(vii)Debtors collection period (days)(viii)Gearing ratio(b)Why is the gearing ratio important to a banker in making a lending decision?(c)Based on the financial ratios in (a), comment on the profitability, liquidity and management efficiency of Mr. Wong’s business.
正确答案：(a) (i) Gross profit margin = Gross profit / Sales×100%year 2002: = 60,000/180,000×100% = 33.3%year 2003: = 75,000/300,000×100% = 25%(ii) Net profit margin = Net profit/Sales×100%year 2002: = 45,000/180,000×100% = 25%year 2003: = 52,500/300,000×100% = 17.5%(iii) Return on capital employed = Net profit / Capital employed×100%year 2002: = 45,000/43,500×100% = 103.4%year 2003: = 52,500/61,500×100% = 85.4%(iv) Current ratio = Current assets / Current liabilitiesyear 2002: = 30,000/9,000 = 3.33 to 1year 2003: = 81,000/37,500 = 2.16 to 1(v) Acid test ratio = (Current assets- Stocks) / Current liabilitiesyear 2002: = 19,500/9,000 = 2.17 to 1year 2003: = 54,000/37,500 = 1.44 to 1(vi) Stock turnover period (days) = 365×Average Stock / Cost of salesyear 2002: = 365×0.5×(15,000+10,500)/120,000 = 39 daysyear 2003: = 365×0.5×(10,500+27,000)/225,000 = 30 days(vii) Debtors collection period (days) = 365×Average debtors/Salesyear 2002: = 365×0.5×(30,000+18,000)/180,000 = 49 daysyear 2003: = 365×0.5×(18,000+54,000)/300,000 = 44 days(viii) Gearing ratio = Long-term loan/(Long-term loan + Shareholders’ fund)×100%year 2002: = 0year 2003: = 0(b) Gearing ratio is an expression of the way companies are financed and the proportion of capital provided by risk taking shareholders and by lenders to the company.This ratio assists the bankers in their loan lending decisions. Basically, gearing ratio is an indication of the risk to be undertaken by the ordinary shareholders because of the interest obligation of the long-term financial position, particularly the
cash flows. A company’s borrowing power will be correspondingly lower when there is an increase in the geared ratio.(c) The following points should be noted:Profitability —Decrease in gross profit margin, net profit margin and return on capital employed.—Although turnover is improved, profit margins am decreased. This may be due to inefficient control on operating expenses and/or less effective marketing strategy.Liquidity—Both current ratio and acid test ratio indicate that the liquidity position is worsening.—It may be due to piling up of inventory and substantial outstanding debtors amounts.Management Efficiency—The credit control policy has been tightened up as the debtors’ collection period has been reduced by 5 days.—The stock control has also been improved as the stock turnover becomes faster.
Question 9
23．The following ledger balances are extracted from the books of White Trading Company as at 31 December 2003:＄Bad debts 750Bank overdraft 1,650Capital 100,000Carriage inwards 3,500Carriage outwards 1,400Creditors 18,500Debenture interest 900Debtors 12,500Discounts allowed 1,300Discounts received 1,500Drawings 24,900Equipment (at cost) 150,000Insurance 1,000Lighting 5,000Motor Van 40,000Provision for bad debts 1,100Provision for depreciation—Equipment 90,000—Motor Van 18,000Purchases 1,000,000Rent & rates 110,000Salaries and wages 210,000Sales 1,400,000Stock 1 January 2003 90,000Returns inwards 13,000Returns outwards 13,5009% 1998-2008 10-year Debenture 20,000Additional information relevant to the year ended 31 December 2003 is as follows:1. Closing stock at 31 December 2003 ＄115,0002. Accrued wages ＄20,0003. Prepaid insurance ＄2004. Outstanding telephone bill ＄2005. Outstanding rent ＄10,0006. Removal expenses of ＄950 are still outstanding because of dispute and they have not yet been entered into the accounting records.7. The depreciation policy is:(a)Equipment reducing balance method at 5% p.a(b)Motor Van: 25% p.a on cost8. It is a policy to make a provision for bad debts at 4% of outstanding debtors on the balance sheet date.Required:Prepare the Trading and Profit and Loss Account for the year ended 31 December 2003.
正确答案：White Trading CompanyTrading and Profit and Loss Account for the year ended 31 December 2003＄＄＄Sales 1,400,000Less: Returns inwards 13,000 1,387,000Less: Cost of goods soldOpening stock 90,000Purchases 1,000,000Add: Carriage inwards 3,500Less: Returns outwards (13,500) 990,0001,080,000Less: Closing stock 115,000 965,000Gross Profit 422,000Other revenues:Discounts received 1,500Bad debts recovery 950424,450Less: ExpensesSalaries and wages 230,000(210,000 + 20,000)Rent & rates 120,000(110,000 + 10,000)Lighting 5,000Insurance (1,000 - 200) 800Removal expenses 950Bank services charges 160Telephone 200Discount allowed 1,300Carriage outwards 1,400Bad debts (750 + 25,000 ×650- 1,100)Debenture interest 2,700(900 + 20,000 ×9%)Depreciation-equipment 3,000 366,160(150,000 - 90,000)×5%Net Profit 58,290。