ACCA F3 MCQ Opening Balance
Aubrey made a profit for the year of $50,000 and has closing net assets of $134,000 During the financial year, capital of $40,000 was introduced which consisted of $25,600 in cash and $14,400 in non-current assets. Drawing of $3,000 were taken out of the business each month.
What was the opening balance of net assets?
| A. | 47,000 |
| B. | 121,000 |
| C. | 88,000 |
| D. | 80,000 |
| Answer. | D. |
Examiner's comment:
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Candidates were required to work back to establish the opening net assets figure, with all other information being provided. Opening net assets are calculated as follows:
| Closing Asset. | 134,000 |
| Less Profit. | 50,000 |
| Less Capital. | 40,000 |
| Add Drawing. | 36,000 |
| Opening Assets. | 80,000. |
The most common answer to the question was A with 54% of candidates selecting this response. This was similar to the correct answer above except it only had drawings of $3,000 (the monthly amount) rather than working out the total drawings for the year. Careful reading of the question should ensure that candidates are not tripped up by this and pick up that they have to do some calculations first.
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