ACCA FA — Financial Accounting Practice Exam 1

Section A

BioGenix Ltd, a pharmaceutical startup, has spent $2 million on researching a new synthetic protein. The directors want to capitalize this cost as an intangible asset to improve the appearance of the statement of financial position, even though the project has not yet demonstrated technical feasibility.

Which fundamental qualitative characteristic of financial information would be breached if BioGenix capitalizes these research costs?

Section A

Which of the following bodies is primarily responsible for issuing International Financial Reporting Standards (IFRS)?

Section A

SolarTech Manufacturing recently upgraded its primary assembly line. Which TWO of the following expenditures should be classified as capital expenditure?

Section A

AgriGrow Ltd sells specialized farming equipment. A customer purchases a tractor for $55,200, which is inclusive of a 15% sales tax.

What is the correct double entry to record this cash sale in AgriGrow Ltd's books?

Section A

Oceanic Logistics provides shipping services. They issue an invoice for $10,000 to a client. Oceanic offers a 5% trade discount to this client, and an additional 2% early settlement discount if payment is made within 10 days. Oceanic expects the client to take the early settlement discount.

At what amount should Oceanic Logistics initially record the revenue?