ACCA Approved Practice & Revision Kit Paper F7 Financial Reporting Practice & Revision Kit for exams up to June 2015

337 Pages·2016·4.89 MB·English

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Financial Reporting that has been comprehensively of a package, this Kit is targeted at ACCA’s exams up c
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reviewed by the ACCA examining team. This to June 2015 and contains: ic
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unique review ensures that the questions, solutions &
and guidance provide the best and most effective • Banks of questions on every syllabus area R
• Answers with detailed guidance on approaching ev
resource for practising and revising for the exam. questions is
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• Three mock exams with full answers and guidance n
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London W12 8AA 2 Practice & Revision Kit for exams
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June 2014
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PAPER F7
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FINANCIAL REPORTING
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BPP Learning Media is an ACCA Approved Learning Partner – content for the ACCA I
qualification. This means we work closely with ACCA to ensure our products fully
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prepare you for your ACCA exams.
In this Practice and Revision Kit which is has been reviewed by the ACCA examination
I
team, we:
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 Discuss the best strategies for revising and taking your ACCA exams
 Ensure you are well prepared for your exam N
 Provide you with lots of great guidance on tackling questions

 Provide you with three mock exams.
 Provide ACCA exam answers as well as our own for selected questions K
Our Passcard and i-Pass products also support this paper.
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FOR EXAMS UP TO JUNE 2015
First edition 2008
Eighth edition June 2014
ISBN 9781 4727 1103 8
(previous ISBN 9781 4453 7996 8)
e-ISBN 9781 4727 1167 0
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Published by written permission of BPP Learning Media Ltd.
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examination questions. The suggested solutions in the
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ii
Contents
Page
Finding questions
Question index..................................................................................................................................................................v
Helping you with your revision
.....................................................................................................................ix
Revising F7
Topics to revise.................................................................................................................................................................x
Question practice..............................................................................................................................................................x
Passing the F7 exam........................................................................................................................................................xi
Exam information............................................................................................................................................................xii
Questions and answers
Questions..........................................................................................................................................................................3
Answers..........................................................................................................................................................................97
Exam practice
Mock exam 1
 Questions............................................................................................................................................................217
 Plan of attack.......................................................................................................................................................227
 Answers...............................................................................................................................................................228
Mock exam 2
 Questions............................................................................................................................................................241
 Plan of attack.......................................................................................................................................................255
 Answers...............................................................................................................................................................256
Mock exam 3 (Specimen paper)
 Questions............................................................................................................................................................269
 Plan of attack.......................................................................................................................................................281
 Answers...............................................................................................................................................................282
ACCA examiner's answers
 Specimen paper...................................................................................................................................................293

Review form

iii
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iv
Question index
The headings in this checklist/index indicate the main topics of questions, but many questions cover several
different topics.
Each topic area begins with MCQs on the topic. Your exam will have 20 MCQs.
Examiner's answers. For the Mock exam 3 the examiner's answers can be found at the end of this Kit.
Time Page number
allocation
Marks Mins Question Answer

Part 1: The conceptual framework

1 MCQs – conceptual framework 10 18 3 97
2 Lisbon (pilot paper amended) 15 27 4 97
3 Concepts (6/08 amended) 15 27 4 98

Part 2: The regulatory framework

4 MCQs – regulatory framework 6 11 5 100
5 Baxen (6/12 amended) 15 27 5 100
6 Regulatory framework (2.5 12/04 amended) 15 27 6 101

Part 3: Presentation of published financial
statements

7 MCQs – presentation of published financial statements 10 18 7 103
8 Preparation question: Candel (12/08) – – 8 103
9 Preparation question: Dexon – – 9 105
10 Highwood (6/11 amended) 30 54 10 108
11 Keystone (12/11 amended) 30 54 12 111
12 Fresco (6/12 amended) 30 54 13 114

Part 4: Non-current assets

13 MCQs – non-current assets 20 36 15 119
14 Preparation question: Plethora plc – – 17 120
15 Dearing (12/08 amended) 15 27 18 121
16 Flightline (6/09 amended) 15 27 18 122

Part 5: Intangible assets

17 MCQs – intangible assets 8 14 20 125
18 Emerald (12/07 amended) 15 27 20 125
19 Dexterity (2.5 6/04 amended) 15 27 21 127
20 Darby (12/09) 15 27 22 128

Finding questions v
Time Page number
allocation
Marks Mins Question Answer

Part 6: Impairment of assets
21 MCQs – impairment of assets 12 22 23 130
22 Telepath (6/12) 15 27 24 131

Part 7: Reporting financial performance

23 MCQs – reporting financial performance 8 14 26 133
24 Preparation question: Partway (2.5 12/06 amended) – – 26 133
25 Tunshill (12/10) 15 27 27 134
26 Manco (12/10 amended) 15 27 28 136

Part 8: Introduction to groups

27 MCQs – introduction to groups 10 18 29 138
28 Preparation question: Group financial statements – – 30 138
29 Preparation question with helping hands: Simple consolidation – – 30 138

Part 9: Consolidated statement of financial position

30 MCQs – consolidated statement of financial position 12 22 32 141
31 Preparation question: Goodwill – – 33 142
32 Pedantic (12/08 amended) 30 54 34 142

Part 10: Consolidated statement of profit or loss
and other comprehensive income

33 MCQs – consolidated statement of profit or loss and OCI 8 14 36 146
34 Preparation question: Acquisition during the year – – 37 146
35 Preparation question: Pandar (12/09 amended) – – 38 148
36 Viagem (12/12 amended) 15 27 39 151
37 Prodigal (6/11 amended) 30 54 40 152

Part 11: Accounting for associates

38 MCQs – accounting for associates 10 18 43 156
39 Preparation question: Laurel – – 44 156
40 Preparation question: Tyson – – 47 158
41 Preparation question: Plateau (12/07 amended) – – 48 159
42 Paladin (12/11 amended) 30 54 50 162

vi Finding questions
Time Page number
allocation
Marks Mins Question Answer

Part 12: Inventories and biological assets

43 MCQs –inventories and biological assets 18 32 52 165

Part 13: Provisions, contingent liabilities and
contingent assets

44 MCQs – provisions, contingent liabilities and contingent assets 8 14 54 166
45 Promoil (12/08) 15 27 55 166
46 Borough (12/11) 15 27 55 167
47 Shawler (12/12 amended) 15 27 56 169

Part 14: Financial instruments

48 MCQs – financial instruments 8 14 57 170
49 Bertrand (12/11 amended) 15 27 58 171

Part 15: Revenue

50 MCQs - revenue 20 18 59 173
51 Preparation question: Derringdo – – 61 174
52 Preparation question: Contract – – 62 175
53 Preparation question: Beetie (pilot paper amended) – – 63 176
54 Mocca (6/11 amended) 15 27 63 178
55 Wardle (6/10 amended) 15 27 64 179

Part 16: Leasing

56 MCQs - leasing 10 18 65 181
57 Preparation question: Branch – – 66 182
58 Fino (12/07 amended) 15 27 66 183

Part 17: Accounting for taxation

59 MCQs – accounting for taxation 10 18 67 185
60 Preparation question: Julian – – 68 186
61 Preparation question: Bowtock – – 69 186

Part 18: Earnings per share

62 MCQs – earnings per share 10 18 70 188
63 Preparation question: Fenton – – 71 189
64 Barstead (12/09 amended) 15 27 72 190
65 Rebound (6/11 amended) 15 27 72 192

Finding questions v ii
Time Page number
allocation
Marks Mins Question Answer

Part 19: Analysing and interpreting financial
statements

66 MCQs – analysing and interpreting financial statements 12 22 74 194
67 Preparation question: Victular (12/08) – – 75 194
68 Bengal (6/11 amended) 15 27 77 196

Part 20: Limitations of financial statements and
interpretation techniques

69 MCQs – limitations of FSs and interpretation techniques 14 25 79 198
70 Waxwork (6/09) 15 27 80 198
71 Quartile (12/12 amended) 15 27 81 199

Part 21: Statement of cash flows

72 MCQs – statement of cash flows 8 14 83 201
73 Preparation question: Dickson – – 84 202
74 Mocha (12/11) 30 54 87 205

Part 22: Alternative models and practices

75 MCQs – alternative models and practices 10 18 89 209
76 Preparation question: Changing prices – – 90 209
77 Update (2.5 6/03 part amended) 15 27 91 210

Part 23: Specialised not-for-profit and public sector
entities

78 MCQs – specialised, not-for-profit and public sector entities 10 18 92 211
79 Preparation question: Appraisal – – 93 212

Mock exam 1
Mock exam 2
Mock exam 3 (Specimen paper)

viii Finding questions
Helping you with your revision
BPP Learning Media – Approved Learning Partner – content
As ACCA’s Approved Learning Partner – content, BPP Learning Media gives you the opportunity to use exam
team–reviewed revision materials. By incorporating the examination team’s comments and suggestions regarding
syllabus coverage, the BPP Learning Media Practice and Revision Kit provides excellent, ACCA-approved support
for your revision.
Tackling revision and the exam
Using feedback obtained from ACCA exam team review:
 We look at the dos and don’ts of revising for, and taking, ACCA exams
 We focus on Paper F7; we discuss revising the syllabus, what to do (and what not to do) in the exam, how to
approach different types of question and ways of obtaining easy marks
Selecting questions
We provide a full question index to help you plan your revision.
Making the most of question practice
At BPP Learning Media we realise that you need more than just questions and model answers to get the most from
your question practice.
 Our top tips included for certain questions provide essential advice on tackling questions, presenting
answers and the key points that answers need to include.
 We show you how you can pick up easy marks on some questions, as we know that picking up all readily
available marks often can make the difference between passing and failing.
 We include marking guides to show you what the examiner rewards.
 We include comments from the examiners to show you where students struggled or performed well in the
actual exam.
 We refer to the 2014 BPP Study Text (for exams up to June 2015) for detailed coverage of the topics
covered in questions.
 In a bank at the end of this Kit we include the official ACCA answers to the Specimen paper. Used in
conjunction with our answers they provide an indication of all possible points that could be made, issues
that could be covered and approaches to adopt.
Attempting mock exams
There are three mock exams that provide practice at coping with the pressures of the exam day. We strongly
recommend that you attempt them under exam conditions. Mock exams 1 and 2 reflect the question styles and
syllabus coverage of the exam; Mock exam 3 is the Specimen paper.

Revising F7 i x