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Fundamentals of Financial Accounting Questions and Answers

Question 25

Refer to the Exhibit.

The following information is given at a manufacturer's year end:

Using some or all of the above figures, the correct figure for factory cost of goods completed is:

£115,700

£125,700

£131,700

£135,300

Question 26

Goodwill is calculated as being:

The excess of the purchase price of an acquired business over the fair value of its separable net assets

The excess of the true value of a business over the net book value of its separable net assets

The excess of the purchase price of an acquired business over the net book value of its separable net assets

The increase in the value of non-current assets as a result of revaluation

Question 27

What is the balance of the trading account?

The gross profit

The revenue value

The closing inventories total

The total income

Question 28

Which ONE of the following does not apply to the preparation of management accounts?

Prepared annually, summarizing financial performance

Prepared frequently throughout the year

Prepared mainly for internal users of accounting information

Prepared to show the detailed costs of manufacturing and trading