AAT L4 Financial Statements of Limited Companies

Question 1

Under FRS 102, which of the following is NOT a component of a complete set of financial statements for a limited company?

Accepted Answer

Tax computation schedule

Answer

Statement of financial position

Answer

Statement of comprehensive income

Answer

Statement of cash flows

Question 2

A limited company has issued 500,000 ordinary shares of £1 each at £1.40 per share. What amount should be credited to the share premium account?

Accepted Answer

£200,000

Answer

£500,000

Answer

£700,000

Answer

£100,000

Question 3

Under the Companies Act 2006, which of the following reserves is distributable to shareholders as dividends?

Accepted Answer

Retained earnings

Answer

Share premium account

Answer

Capital redemption reserve

Answer

Revaluation reserve (unrealised gains)

Question 4

When consolidating a subsidiary's financial statements, goodwill arising on acquisition is calculated as:

Accepted Answer

Fair value of consideration paid minus the fair value of the subsidiary's identifiable net assets

Answer

Fair value of consideration paid minus the subsidiary's net book value of assets

Answer

The subsidiary's total assets minus total liabilities

Answer

Market capitalisation minus share capital

Question 5

A company revalues its property from £300,000 to £450,000. The original cost was £400,000 with accumulated depreciation of £100,000. What is the revaluation gain recognised in other comprehensive income?

Accepted Answer

£150,000

Answer

£50,000

Answer

£100,000

Answer

£450,000

Question 6

Which of the following statements about a statement of cash flows under FRS 102 Section 7 is correct?

Accepted Answer

Depreciation charges are added back to profit in the operating activities section under the indirect method

Answer

Dividends paid must always be classified as financing activities

Answer

Interest received must always be classified as investing activities

Answer

Tax paid is classified as a separate category and is not allocated to operating, investing, or financing