ACCA AS Practice Test

ACCA AS Study Tips

• Create a structured study schedule at least 4-6 weeks before your ACCA AS exam date.
• Focus on understanding core concepts rather than memorising answers for the ACCA Applied Skills Level Papers.
• Use our free practice tests to identify weak areas and track your progress over time.
• Review the official ACCA AS exam syllabus to ensure complete topic coverage.
• Take timed practice sessions to build your exam pace and reduce test-day anxiety.

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Sample ACCA Applied Skills Practice Questions

Try these questions from our free ACCA Applied Skills practice tests. The correct answer and an explanation follow each question.

1. Which remedy is available to a party for breach of a condition in a contract?

   • A. Damages only
   • B. Repudiation of the contract only
   • C. Either repudiation of the contract or damages, or both
   • D. Specific performance only

Answer: C. Either repudiation of the contract or damages, or both

A condition is a fundamental term of the contract. Breach of a condition entitles the innocent party to repudiate (terminate) the contract AND/OR claim damages. This gives the widest range of remedies compared to breach of a warranty.

Answer: B. £180,000

Under the proportionate goodwill method: Goodwill = Consideration paid − Parent's share of fair value of net assets = £500,000 − (80% × £400,000) = £500,000 − £320,000 = £180,000. The proportionate method only recognises the parent's share of goodwill, unlike the full goodwill method which would also attribute goodwill to the NCI.

Answer: B. Companies prefer internal financing first, then debt, and equity as a last resort

The pecking order theory (Myers, 1984) suggests companies prefer financing sources with the lowest information asymmetry costs. Retained earnings are preferred first (no external scrutiny), followed by debt (limited disclosure), and finally equity (highest adverse selection costs, potential share price dilution). This explains why profitable firms often have low gearing.

Answer: C. A change in interest rates by the Bank of England

Systematic (market) risk affects all companies in the market and cannot be eliminated through diversification. Interest rate changes by the Bank of England affect all businesses through borrowing costs, consumer spending, and investment decisions. The other options are unsystematic (specific) risks that affect individual companies and can be diversified away in a portfolio.

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