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ACCA Applied Knowledge Accounting & Finance Questions
Practise accounting & finance (finance) for the ACCA Applied Knowledge exams (BT, MA, FA): 10 multiple-choice questions, each with the correct answer and a worked explanation. Click an option to check it, or “New questions” for another set.
Accounting & Finance practice
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Q1.The CAPM expected return equals:
Show answer & explanation
Answer: A — Rf + β(Rm − Rf)
Capital Asset Pricing Model: risk-free rate + beta × market risk premium.
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Q2.Find the present value of £1,300 received at the end of each year for 6 years at 4%.
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Answer: B — £6,815
PV of an ordinary annuity = PMT × [1 − (1 + r)⁻ⁿ]/r = 1,300 × 5.2421 = £6,815.
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Q3.If interest rates rise, the price of an existing fixed-rate bond generally:
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Answer: C — Falls
Bond prices move inversely to market interest rates.
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Q4.Find the compound interest on £36,000 at 20% per annum for 3 years, compounded annually.
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Answer: B — £26,208
A = P(1 + R/100)^T = 36,000 × 1.20^3 = 62,208; CI = A − P = £26,208.
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Q5.Revenue is recognised under accrual accounting when:
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Answer: A — It is earned (performance obligation satisfied)
Under IFRS 15 / ASC 606 revenue is recognised as obligations are satisfied.
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Q6.Find the compound interest on £26,000 at 10% per annum for 3 years, compounded annually.
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Answer: B — £8,606
A = P(1 + R/100)^T = 26,000 × 1.10^3 = 34,606; CI = A − P = £8,606.
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Q7.Standard deviation in finance measures:
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Answer: C — Volatility (dispersion) of returns
It measures how widely returns vary around the mean.
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Q8.Find the present value of £900 received at the end of each year for 7 years at 6%.
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Answer: B — £5,024
PV of an ordinary annuity = PMT × [1 − (1 + r)⁻ⁿ]/r = 900 × 5.5824 = £5,024.
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Q9.Goodwill arises when:
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Answer: C — One company acquires another for more than the fair value of net identifiable assets
Goodwill = purchase price − fair value of net identifiable assets acquired.
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Q10.£9,000 is invested at 10% compounded annually. What is it worth after 7 years?
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Answer: C — £17,538
FV = PV(1 + r)ⁿ = 9,000 × 1.10^7 = £17,538.
How to approach accounting & finance questions
Master the accounting equation, the three financial statements and time value of money: FV = PV(1 + r)ⁿ, PV of an annuity = PMT × [1 − (1 + r)⁻ⁿ]/r. Ratios link the statements.
About ACCA Applied Knowledge
ACCA Applied Knowledge exams (BT, MA, FA) — conducted by Association of Chartered Certified Accountants (ACCA). The first ACCA level: Business & Technology, Management Accounting and Financial Accounting.
Original practice questions written for this site in the style and difficulty of each exam’s syllabus. They are not past papers and the site is not affiliated with any exam body. Exam patterns, marking schemes and syllabi change — always check the latest official notification.
ACCA Applied Knowledge practice topics
| Topic | Section | Question source |
|---|---|---|
| Accounting & Finance | Finance | Calculated + question bank |
| Simple & Compound Interest | Quantitative aptitude | Calculated (new numbers every set) |
| Economy & Banking Awareness | General awareness | Question bank |