Topic: Elements of Financial Statements

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  • 1 Marks

FA – May 2012 – L1 – SA – Q32 – Elements of Financial Statements

Identifying the intangible business asset related to reputation and customer loyalty.

An intangible business asset which relates to reputation, customers’ loyalty, and popularity garnered over the years, and due to the expertise of the business owner or the quality of goods produced or services rendered, is called ………………………….

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  • 1 Marks

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

The value of goods taken by the proprietor of a firm for his consumption will affect all but ONE of the following:

A. Gross profit
B. Net profit
C. Inventory balance
D. Company’s capital
E. Inventory valuation.

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  • 1 Marks

FA – May 2012 – L1 – SA – Q1 – Elements of Financial Statements

Identifying the item that does not belong in the statement of financial position of a club.

The following items normally feature in the statement of financial position of a club EXCEPT:

A. Current year’s subscription
B. Salary in arrears
C. Rental income received in advance
D. Advance subscription in respect of a coming year
E. Subscription in arrears.

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  • 20 Marks

FA – Nov 2020 – L1 – SB – Q5 – Elements of Financial Statements

Classify expenditure as capital or revenue and state recognition in financial statements.

Given below are items of revenue and capital expenditure:

  1. A number of new cars recently cleared by a motor car dealing company.
  2. Two new motor boats acquired by a ferry service agency.
  3. Vacant houses owned by an estate developing company, for which negotiations are ongoing for sale to prospective landlords.
  4. New buildings acquired for the purpose of holding items of plant and machinery belonging to a detergent manufacturing company.
  5. Cost of acquiring a leasehold property for office use.
  6. Granites purchased by an engineering contractor for use at a construction site.
  7. Cost of rehabilitating a dilapidated housing unit owned by an estate developer.
  8. Pre-production testing cost.

Required:

a. Using the tabular format below, classify the above transactions into capital or revenue expenditure. (8 Marks)

S/N | Capital Expenditure | Revenue Expenditure

b. State whether each of the items above will be recognized in the statement of profit or loss or in the statement of financial position. (8 Marks)

c. In respect of the information in (a) above, outline the details of information of the capital expenditure that should be included in the property, plant, and equipment (PPE) register. (4 Marks)

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  • 1 Marks

FA – Nov 2020 – L1 – SA – Q13 – Elements of Financial Statements

Identifies a component that is not part of the financial statements as defined by IAS 1.

Which of the following is NOT a component of financial statements under IAS 1?
A. Statement of financial position
B. Statement of profit or loss and other comprehensive income
C. Statement of equity
D. Statement of changes in equity
E. Statement of cash flows

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  • 1 Marks

FA – Nov 2020 – L1 – SA – Q9 – Elements of Financial Statements

Determines the balance on the share premium account after a rights issue.

What will be the balance on the share premium account after the rights issue?

Item N’000
Ordinary share capital: 200,000 shares of 50k each 100
Premium account 150

The company made a rights issue of 1 for 5 at N1.50, and the rights issue was fully subscribed.

A. N90,000
B. N140,000
C. N150,000
D. N190,000
E. N200,000

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  • 1 Marks

FA – Nov 2020 – L1 – SA – Q8 – Elements of Financial Statements

Determines the amount credited to share capital from a rights issue.

The capital structure of Baba Oba Limited is shown below:

Item N’000
Ordinary share capital: 200,000 shares of 50k each 100
Premium account 150

The company made a rights issue of 1 for 5 at N1.50, and the rights issue was fully subscribed.

What is the amount of the rights issue credited to share capital?
A. N20,000
B. N40,000
C. N50,000
D. N70,000
E. N100,000

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  • 1 Marks

FA – Nov 2020 – L1 – SA – Q4 – Elements of Financial Statements

Identification of correct and incorrect items in the statement of cash flows.

Which of the following is/are correct?

I. A statement of cash flow prepared using the direct method produces a different figure for operating cash flow than that produced by the indirect method.
II. Rights issue of shares does not feature in the statement of cash flow.
III. Revaluation surplus of a non-current asset is not recognized as an item in the statement of cash flow.
IV. A profit on the sale of a non-current asset is recognized as an item under cash flows from investing activities in a cash flow statement.

A. I and IV
B. II and III
C. II and IV
D. III
E. I and III

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  • 1 Marks

FA – Nov 2012 – L1 – SB – Q40 – Elements of Financial Statements

Calculate the dividend payable to ordinary shareholders.

If a 10% dividend is approved, what is the dividend payable to ordinary shareholders?

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  • 1 Marks

FA – Nov 2012 – L1 – SB – Q39 – Elements of Financial Statements

Calculate equity shareholder fund from given financial data.

Calculate the company’s equity?

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  • 1 Marks

FA – May 2012 – L1 – SA – Q32 – Elements of Financial Statements

Identifying the intangible business asset related to reputation and customer loyalty.

An intangible business asset which relates to reputation, customers’ loyalty, and popularity garnered over the years, and due to the expertise of the business owner or the quality of goods produced or services rendered, is called ………………………….

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  • 1 Marks

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

The value of goods taken by the proprietor of a firm for his consumption will affect all but ONE of the following:

A. Gross profit
B. Net profit
C. Inventory balance
D. Company’s capital
E. Inventory valuation.

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  • 1 Marks

FA – May 2012 – L1 – SA – Q1 – Elements of Financial Statements

Identifying the item that does not belong in the statement of financial position of a club.

The following items normally feature in the statement of financial position of a club EXCEPT:

A. Current year’s subscription
B. Salary in arrears
C. Rental income received in advance
D. Advance subscription in respect of a coming year
E. Subscription in arrears.

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  • 20 Marks

FA – Nov 2020 – L1 – SB – Q5 – Elements of Financial Statements

Classify expenditure as capital or revenue and state recognition in financial statements.

Given below are items of revenue and capital expenditure:

  1. A number of new cars recently cleared by a motor car dealing company.
  2. Two new motor boats acquired by a ferry service agency.
  3. Vacant houses owned by an estate developing company, for which negotiations are ongoing for sale to prospective landlords.
  4. New buildings acquired for the purpose of holding items of plant and machinery belonging to a detergent manufacturing company.
  5. Cost of acquiring a leasehold property for office use.
  6. Granites purchased by an engineering contractor for use at a construction site.
  7. Cost of rehabilitating a dilapidated housing unit owned by an estate developer.
  8. Pre-production testing cost.

Required:

a. Using the tabular format below, classify the above transactions into capital or revenue expenditure. (8 Marks)

S/N | Capital Expenditure | Revenue Expenditure

b. State whether each of the items above will be recognized in the statement of profit or loss or in the statement of financial position. (8 Marks)

c. In respect of the information in (a) above, outline the details of information of the capital expenditure that should be included in the property, plant, and equipment (PPE) register. (4 Marks)

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  • 1 Marks

FA – Nov 2020 – L1 – SA – Q13 – Elements of Financial Statements

Identifies a component that is not part of the financial statements as defined by IAS 1.

Which of the following is NOT a component of financial statements under IAS 1?
A. Statement of financial position
B. Statement of profit or loss and other comprehensive income
C. Statement of equity
D. Statement of changes in equity
E. Statement of cash flows

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  • 1 Marks

FA – Nov 2020 – L1 – SA – Q9 – Elements of Financial Statements

Determines the balance on the share premium account after a rights issue.

What will be the balance on the share premium account after the rights issue?

Item N’000
Ordinary share capital: 200,000 shares of 50k each 100
Premium account 150

The company made a rights issue of 1 for 5 at N1.50, and the rights issue was fully subscribed.

A. N90,000
B. N140,000
C. N150,000
D. N190,000
E. N200,000

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  • 1 Marks

FA – Nov 2020 – L1 – SA – Q8 – Elements of Financial Statements

Determines the amount credited to share capital from a rights issue.

The capital structure of Baba Oba Limited is shown below:

Item N’000
Ordinary share capital: 200,000 shares of 50k each 100
Premium account 150

The company made a rights issue of 1 for 5 at N1.50, and the rights issue was fully subscribed.

What is the amount of the rights issue credited to share capital?
A. N20,000
B. N40,000
C. N50,000
D. N70,000
E. N100,000

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  • 1 Marks

FA – Nov 2020 – L1 – SA – Q4 – Elements of Financial Statements

Identification of correct and incorrect items in the statement of cash flows.

Which of the following is/are correct?

I. A statement of cash flow prepared using the direct method produces a different figure for operating cash flow than that produced by the indirect method.
II. Rights issue of shares does not feature in the statement of cash flow.
III. Revaluation surplus of a non-current asset is not recognized as an item in the statement of cash flow.
IV. A profit on the sale of a non-current asset is recognized as an item under cash flows from investing activities in a cash flow statement.

A. I and IV
B. II and III
C. II and IV
D. III
E. I and III

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  • 1 Marks

FA – Nov 2012 – L1 – SB – Q40 – Elements of Financial Statements

Calculate the dividend payable to ordinary shareholders.

If a 10% dividend is approved, what is the dividend payable to ordinary shareholders?

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  • 1 Marks

FA – Nov 2012 – L1 – SB – Q39 – Elements of Financial Statements

Calculate equity shareholder fund from given financial data.

Calculate the company’s equity?

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