Acca financial Accounting (FA) Study Text ac ca (FA)

Which one statement is not true?

 

A 

Inventory is shown on the statement of profit or loss and in the 

statement of financial position 

B 

Expenses should be included on the statement of profit or loss 

C 

Inventory should be included on the statement of financial position 

only 

D 

Receivables are included in current assets on the statement of 

financial position 

From trial balance to financial statements 

The following is the extract of Jessie’s trial balance as at 31 December 20X5: 

 

Dr Cr 

 $ 

$ 

Buildings 580,000 

 

Buildings accumulated depreciation 

  116,000 

Plant and machinery 

50,000 

 

Plant and machinery accumulated depreciation 

 

12,500 

Receivables 25,800 

 

Allowance for receivables 

 

1,900 

Rent 34,000 

 

Insurance 30,000 

 

Irrecoverable debts 

1,800 

 

The following notes are provided: 

(i) 

Buildings are depreciated at 2% pa on a straight-line basis. 

(ii)  Plant and machinery is depreciated at 25% pa on a reducing balance 

basis. 

(iii)  Additional irrecoverable debts of $3,200 were discovered at the year-end 

which need to be written off. It was also decided to have an allowance for 

receivables of $1,130 at the year end. 

(iv)  The monthly rental charge is $3,000. 

(v)  The insurance charge for the year is $24,000.