Nova School of Business and Economics

Spring 2021/2022
Financial Accounting

17th June 2022 120 minutes

RESIT EXAM

STUDENT NUMBER:________________

N.B.
This exam has 5 groups.
Do not separate any paper sheet.
Please check that your exam has 14 pages, including a page with the chart of accounts. Write
your student number in every page.
All answers must be provided in Wiseflow.
GOOD LUCK!

Mark your answers to the multiple choice questions of group I in the answers grid you may
find below. Only the answers marked in the answers grid will be considered valid.
Answers grid – Group I

Mark the right answer with a circle or with an “X”.

Each multiple choice question correctly answered is worth 0.6 points. For each wrong
answer, 0.1 points will be deducted. If more than one answer is correct, choose the most
comprehensive one.
Multiple Choice
a b c d
I.1 X
I.2 X
I.3 X
I.4 X
I.5 X
I.6 X

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STUDENT NUMBER:___________

Group I (3.6 points)

This exam has 5 groups. This is group 1 of 5.

All answers must be provided in Wiseflow.
Each multiple choice question correctly answered is worth 0.6 point. For each wrong answer, 0.1
points will be deducted. If more than one answer is correct, choose the most comprehensive one.

1. The total equity of company A changes when:

a. The company increases its share capital by incorporating reserves.
b. The company buys a property for its headquarters.
c. A shareholder sells the shares he holds of company A to another company (company B).
d. None of the other options.

2. “The financial information of a company must be free from material errors and users must be
able to rely on it to take decisions.” This sentence is referring to a quality of the financial
information. Which one?
a. Substance over form.
b. Prudence.
c. Understandability.
d. Faithful representation.

3. Consider the following information on company Alfa, which computes its VAT receivable or
payable on a monthly basis:
 In December N, the company charged 30,000 euros of VAT on services rendered;
 In December N, the company acquired the following tangible fixed assets: a computer
with 2,000 euros of deductible VAT and a light passenger vehicle with 5,000 euros of non-
deductible VAT;
 In December N, trade discounts were granted to customers after the invoice was issued,
whose VAT amounted to 4,000 euros;
 The company presented VAT receivable by the end of November N in the amount of
10,000 euros, for which it did not ask a refund from the government;
 In October N, the company asked the government a 20,000 euros refund of VAT which it
did not receive yet;
 The only payment or collection recorded by the company regarding VAT in the fourth
quarter of N was the payment of the September VAT, in the amount of 25,000 euros.
Considering the information above, regarding VAT, company ALFA will present on the balance sheet
as at 31/Dec/N:

a. VAT receivable in the assets for 30,000 euros and VAT payable in the liabilities for 19,000
euros.
b. VAT receivable in the assets for 7,000 euros.
c. VAT payable in the liabilities for 18,000 euros.
d. VAT receivable in the assets for 20,000 euros and VAT payable in the liabilities for 14,000
euros.

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STUDENT NUMBER:___________

4. Which of the following statements is true regarding the balance sheet?

a. Accrued expenses are always presented on the liabilities.
b. Deferred expenses are always presented on the assets.
c. Advance payments from customers are always presented on the liabilities.
d. All other statements are true.

Consider the following information to answer questions 5 and 6.

Consider the following transactions regarding company Beta. This company was established
in year N and is exempt of VAT. The transactions presented below were the only ones that
occurred in year N.

 Issuance of share capital for 200,000 euros, realized by the shareholders with a
land plot worth 100,000 euros, and the remaining in cash.
 New bank loan of 60,000 euros and interest payment of 11,000 euros.
 Cash purchase of merchandise worth 80,000 euros.
 Cash sale of merchandise for 95,000 euros.
 Purchase and payment of advisory services in the amount of 20,000 euros.

Considering the above information, please answer the following questions:

5. The cash balance by the end of year N is:

a. 94,000 euros.
b. 144,000 euros.
c. 194,000 euros.
d. 0 euros.

6. The cash flow of the financing activities in year N is:

a. + 249,000 euros.
b. + 200,000 euros.
c. + 149,000 euros.
d. 0 euros.

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 STUDENT NUMBER:___________

Group II (3.5 points)

This exam has 5 groups. This is group 2 of 5.

All answers must be provided in Wiseflow.
When you are asked to compute or determine figures or amounts, show your intermediate
computations in a short way.

Below you can find the warehouse record of merchandise for company LMN, which trades lamps.
The company uses the average cost method to value its inventories. The purchase return presented
as transaction 2 regards the purchase shown as transaction 1.

Inflows Outflows Inventory

Nº Description Q P A Q P A Q P A
0 Initial Inventory - - - - - - 1 000 120 120 000
1 Credit purchase 500 150 75 000 - - - 1 500 A ?
2 Purchase return - - - 300 B ? 1 200 C ?
3 Credit sale - - - 500 ? ? 700 D ?

1. Determine the values of A, B, C and D. (0.75 points)

A = (120 000 + 75 000) / 1 500 = 130

B = 150
C = (120 000 + 75 000 – 300 x 150) / 1 200 = 125
D = 125

2. Record the purchase and the purchase return in the company’s journal knowing that both
were subject to VAT at 20%. (1.25 points)

Description Debit account Credit account Amount

Credit purchase 321 75 000
243 15 000
221 90 000
Purchase return 221 54 000
321 45 000
243 9 000

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STUDENT NUMBER:___________

3. Record the sale in the company’s journal knowing that each lamp was sold for 200 Euros less
a 10% trade discount, plus VAT at 20% rate. One month ago, the company received an
advance payment of 36,000 Euros from this customer (VAT included at 20%). If you were not
able to determine the cost of goods sold assume it is 135 euros per unit. (1.25 points)

Description Debit account Credit account Amount

Credit Sale 211 108 000
71 90 000
243 18 000
Inventory exit 61 321 62 500
Cancel cash advance 218 30 000
243 6 000
211 36 000

4. The net amount of the processing and payment of employees’ salaries was 29,600 Euros. The
average IRS tax withholding rate is 15%, the social security tax paid by the employees is 11%
and by the employer is 23.75% . Determine the gross salary. (0.25 points)

Gross salary = Net salary / (1 - SS tax rate – IRS tax rate)

Gross salary = 29 600 / (1 – 11% – 15%) = 40 000

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STUDENT NUMBER:___________

Group III (3.9 points)

This exam has 5 groups. This is group 3 of 5.

All answers must be provided in Wiseflow.
When you are asked to compute or determine figures or amounts, show your intermediate
computations in a short way.

1. In February N, Company ABC made a credit sale for 20,000 euros, plus VAT at 20%, of a
vehicle that was recorded as a tangible fixed asset. The company obtained a loss of 2,500
euros with this sale. The acquisition cost of the vehicle was 30,000 euros.
Present the accounting records of the sale of the vehicle. (1 point)

Loss = Sale value – Net book value

-2,500 = 20,000 – (30,000 – Accumulated depreciation)
Accumulated depreciation = 7,500

Description Debit account Credit account Amount

Sale of vehicle 431 30,000
438 7,500
243 4,000
278 24,000
68 2,500

2. In March N, Company ABC purchased a property with the intention of renting it. It was
bought for 140,000 euros and the corresponding public deed expenditures amounted to
10,000 euros. Both amounts were paid by bank transfer.

a) Record the acquisition of the building. (0.4 points)

Description Debit account Credit account Amount
Acquisition of Investment Property 421 12 150,000

b) On 31/Dec/N, this property had a fair value of 160,000 euros. Present the appropriate
records regarding this property at the end of N, assuming that Company ABC uses the fair
value method. (0.5 points)
Description Debit account Credit account Amount
Fair value adjustment 421 77 10,000

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STUDENT NUMBER:___________

3. By the end of year N, Company ABC had the following Owner’s Equity items:

Owner’s equity 31/12/N

Share capital 200,000
Share premium 40,000
Reserves 25,000
Retained earnings 80,000
Net income 50,000
Total owner’s equity 395,000

The nominal value of each share is 2 euros. During year N+1, the following transactions were the
only ones that took place regarding Owner’s Equity:

 In the general meeting of shareholders, in March N+1, it was decided that 30% of the net
income from the previous year would be distributed as dividends, 10% would be
transferred to reserves and the remaining 60% would be kept in retained earnings.
Dividends were paid to the shareholders and subject to tax withholding at 25%.

 On 01/May/N+1 a share capital increase occurred, through the issuance of 10,000 new
shares at the accounting value as at 30/April/N+1 [Accounting value of each share = Total
equity / Number of shares]. The new shares were paid by the shareholders with cash.

a) Present the accounting records for the decision taken by the general meeting of shareholders
and for the payment of dividends. (0.75 points)

Description Debit account Credit account Amount

Distribution of profits 56 20,000
26 15,000
55 5,000
Payment of dividends 26 15,000
242 3,750
12 11,250

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STUDENT NUMBER:___________

b) Determine the accounting value of each share as at 30/April/N+1, knowing that the net
income generated between 01/Jan/N+1 and 30/April/N+1 was equal to 20,000 euros. (0.75
points)

ΔEquity = ΔShare Capital + ΔShare Premium + ΔReserves + ΔRetained Earnings + Δ Net Income =
0 + 0 + 5,000 + 30,000 – 50,000 + 20,000 = +5,000
Equity30/April/N+1 = 400,000€
Number of shares outstanding = 200,000/2 = 100,000
Accounting value per share = 400,000€ / 100,000 shares = 4€

c) Record the share capital increase occurred on 01/May/N+1: 10,000 new shares issued at the
accounting value as at 30/Apr/N+1. If you were not able to determine the accounting value
per share, assume it was 3 euros. (0.5 points)

Description Debit account Credit account Amount

Subscription 51 20,000
54 20,000
26 40,000
Realization 12 26 40,000

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STUDENT NUMBER:___________

Group IV (3.75 points)

This exam has 5 groups. This is group 4 of 5.

All answers must be provided in Wiseflow.
When you are asked to compute or determine figures or amounts, show your intermediate
computations in a short way.

Below you can find part of the trial balance of company MMM, for year N-1.

31/12/N-1 Debit balance Credit balance

…
211- Accounts Receivable 120,000
219 – Accumulated Allowances ??
…
252 - Capital Lease 60,000
…
431 – Tangible fixed assets ??
438 – Accumulated Depreciation ??

Regarding the balance sheet amounts for year N-1 the following information is also known:
 Accounts receivable from customers are equal to 100,000 euros;
 Tangible fixed assets are equal to 70,000 euros.

1. There is only one tangible fixed asset: a vehicle bought under a capital lease in N-3. That is
also the only capital lease the company has. This vehicle is depreciated on an annual basis
using the straight-line method and its useful life is 10 years. Compute the amounts that
should be in the trial balance regarding accounts 431 and 438 in year N-1. (0.75 points).

431: X – X/10*3 = 70,000  X = 100,000

438: 30,000

2. Record, in the journal of N-3, the capital lease contract and the payment of the second rent,
subject to deductible VAT at 20%, which includes reimbursement of 10,000 euros and
interest of 2,000 euros. If you were not able to compute the acquisition cost, assume it to be
150,000 euros. (1 point)
Description Debit account Credit account Amount
Capital Lease 431 252 100,000

2nd rent 252 10,000

69 2,000
243 2,400
12 14,400

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STUDENT NUMBER:___________

3. During year N, the firm received from its customers 50,000 euros. By the end of year N
there were 40,000 euros of accounts receivable considered as bad debts. Please record the
collection of cash from the customers and the required adjustments to be made by the firm
by the end of year N. (0.75 points)

Description Debit account Credit account Amount

Accounts receivable 12 211 50,000

Allowances adjustment 65 219 20,000

4. By the end of N-1, the company has an amount of 1,000 euros in account 281 – Deferred
Expenses that corresponds to insurance paid on the vehicle it owns. Every year, the firm
pays annual insurance on 1st May, regarding the 12 months that start on that day and go
until 30th April next year. Compute the amount of insurance the firm paid in N-1 and record
the required transactions in year N, including the payment of the insurance policy on
01/May/N+1 in the amount of 3,300 euros. (1.25 points)

Deferred amount corresponds to 4 months

Amount of insurance paid in N-1/ 12 x 4 = 1,000
Insurance per month = 1,000 / 4 = 250€
Total insurance paid = 250€ x 12 = 3,000

Description Debit account Credit account Amount

Deferred expense cancellation 62 281 1,000

Payment of insurance 12 3,300

62 2,200
281 1,100

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STUDENT NUMBER:___________

Group V (5.25 points)

This exam has 5 groups. This is group 5 of 5.

All answers must be provided in Wiseflow.
When you are asked to compute or determine figures or amounts, show your intermediate
computations in a short way.

Company A, S.A. purchases and sells footwear.

1. In January N-1, Company A increased its capital by issuing, by the nominal value, 60,000 new
shares which were fully subscribed and paid in cash by Company B. This was the only capital
increase occurred in year N-1 and it was the first time that Company B invested in Company
A. On 31/12/N-1, Company A had share capital of 200,000 euros, which corresponded to
100,000 shares outstanding.
The net income of Company A in year N-1 was 20,000 euros. Company B used the Equity
Method to value this investment in Company A.

a) Present in the journal of Company B all the appropriate accounting records related to the
events described in N-1. If you were not able to determine the amount of the capital increase,
assume it was 140,000 euros. (0.75 points)

Description Debit account Credit account Amount

March N-1 411 12 120 000
December N-1 411 78 12 000

b) In the general meeting of shareholders held in March N, the shareholders of Company A

decided to distribute 30% of the earnings from the previous year. The dividends payment
occurred in May N and was subject to tax withholding at 25%. Present in the journal of
Company B all the appropriate accounting records related to the events described in N. (0.75
points)

Description Debit account Credit account Amount

March N – Dividends distribution 278 411 3 600
March N – Retained Earnings 56 57 8 400
May N – Receipt of dividends 278 3 600
241 900
12 2 700

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STUDENT NUMBER:___________

2. In March N-3, Company A acquired basic equipment for 60,000 euros (VAT included at 20%),
which was revaluated in N-1, after depreciation. On 31/12/N-1, the replacement cost of this
equipment (as new) was 100,000 Euros (plus VAT at 20%) and the company recorded a
revaluation surplus of 31,250 euros. The useful life of this equipment is 8 years. The company
uses the straight-line depreciation method on an annual basis.

a) Record in the journal of year N-1 the revaluation of this asset. (0.75 points)
Description Debit account Credit account Amount
Revaluation of basic equipment (N-1) 431 50 000
438 18 750
58 31 250

b) Compute and record the depreciation and the realization of the revaluation surplus of the
basic equipment in year N. (1 point)

Depreciation N = 100,000€ / 8 years = 12,500€

Number of years until the end of useful life (N) = 8 – 1 – 1 – 1 = 5 years
Realization of revaluation surplus per year = 31,250€ / 5 years = 6,250€

Description Debit account Credit account Amount

Depreciation of basic equipment (N) 64 438 12 500
58 56 6 250

c) Compute the balance of account 58 – Revaluation Surpluses as at 31/12/N+1 knowing that

this was the only revaluation done by the company. (0.5 points)

Balance N+1 (Revaluation Surpluses) = 31250 – (2*6250) = 18750€

3. In September N+1, Company A acquired 5,000 shares of Company B for 1 euro/share with
the purpose of re-selling them in 2 months. The company paid immediately expenses with
this purchase in the amount of 20 euros. On 31/12/N+1, these shares were quoted at 1.40
euros/share.

a) Which is the valuation method used on this shares? And in which account are these shares
recorded? (0.25 points)

Fair Value Method: Account 14 (Short-term Investment)

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STUDENT NUMBER:___________

b) Record the acquisition of these shares. (0.5 points)

Description Debit account Credit account Amount

Acquisition of shares (ST investment) 14 5 000
62 20
12 5 020

c) Present the accounting records regarding the value of the shares as at 31/12/N+1. (0.25
points)

Description Debit account Credit account Amount

ST investment fair value adjustment 14 77 2 000

4. Company A’s current assets and current liabilities by the end of years N-1 and N are the
following:
31/12/N-1 31/12/N

Current assets 400,000 € 450,000 €

Current liabilities 350,000 € 400,000 €

Determine the current ratio [Current assets / Current Liabilities] for year N-1 and N. Interpret
the ratio and analyse its change. (0.5 points)

Current ratio = Current Assets/Current Liabilities

Current ratio N-1 = 400,000 / 350,000 = 1.14
Current ratio N = 450,000 / 400,000 = 1.29

This ratio represents the company’s ability to pay short-term obligations. It allows the
assessment of the liquidity situation of the company. In N-1, the current assets of the company
were enough to pay 114% of its current liabilities, while in N this figure increased to 129%. Thus,
the company is in a better liquidity situation in N.

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STUDENT NUMBER:___________

QUADRO DE CONTAS / CHART OF ACCOUNTS

ACCOUNT
CÓDIGO CONTA ACCOUNT TITLE
CODE
11 CAIXA 11 CASH
12 DEPÓSITOS À ORDEM 12 CHECK DEPOSITS
13 DEPÓSITOS A PRAZO 13 TERM DEPOSITS
14 OUTROS INSTRUMENTOS FINANCEIROS 14 SHORT-TERM FINANCIAL INVESTMENTS
211 CLIENTES C/C 211 ACCOUNTS RECEIVABLE FROM CUSTOMERS
218 ADIANTAMENTOS DE CLIENTES 218 CASH ADVANCES FROM CUSTOMERS
219 PERDAS DE IMPARIDADES ACUMULADAS EM CLIENTES 219 ACCUMULATED ALLOWANCES FOR DOUBTFUL DEBTS FROM CUSTOMERS
221 FORNECEDORES C/C 221 ACCOUNTS PAYABLE TO SUPPLIERS
228 ADIANTAMENTOS A FORNECEDORES 228 CASH ADVANCES TO SUPPLIERS
241 IMPOSTO SOBRE O RENDIMENTO 241 INCOME TAX ACCOUNTS RECEIVABLE OR PAYABLE
242 RETENÇÕES DE IMPOSTOS E TAXAS 242 TAX WITHHOLDING ACCOUNTS PAYABLE
243 IVA 243 VAT ACCOUNTS RECEIVABLE OR PAYABLE
245 SEGURANÇA SOCIAL 245 SOCIAL SECURITY ACCOUNTS PAYABLE
251 EMPRÉSTIMOS BANCÁRIOS 251 BANK LOANS
252 LEASING FINANCEIRO 252 CAPITAL LEASE
26 ACIONISTAS 26 SHAREHOLDERS ACCOUNTS RECEIVABLE OR PAYABLE
271 ACRÉSCIMOS DE RENDIMENTOS 271 ACCRUED REVENUES
272 ACRÉSCIMOS DE GASTOS 272 ACCRUED EXPENSES
278 OUTRAS DÍVIDAS A RECEBER 278 OTHER ACCOUNTS RECEIVABLE
279 OUTRAS DÍVIDAS A PAGAR 279 OTHER ACCOUNTS PAYABLE
281 GASTOS DIFERIDOS 281 DEFERRED EXPENSES
282 RENDIMENTOS DIFERIDOS 282 DEFERRED REVENUES
29 PROVISÕES 29 PROVISIONS
321 MERCADORIAS 321 INVENTORIES - MERCHANDISE
329 PERDAS DE IMPARIDADES ACUMULADAS EM MERCADORIAS 329 ACCUMULATED WRITE DOWN IN INVENTORIES
411 INVESTIMENTOS FINANCEIROS 411 INVESTMENTS IN COMPANIES
419 PERDAS DE IMPARIDADES ACUMULADAS EM INV. FINANCEIROS 419 ACCUMULATED IMPAIRMENT (FINANCIAL INVESTMENTS)
421 PROPRIEDADES DE INVESTIMENTO 421 INVESTMENT PROPERTIES
428 DEPRECIAÇÕES ACUMULADAS DE PROP. DE INVESTIMENTO 428 ACCUMULATED DEPRECIATION (INVESTMENT PROPERTIES)
429 PERDAS DE IMPARIDADES ACUMULADAS EM PROP. DE INVESTIMENTO 429 ACCUMULATED IMPAIRMENT (INVESTMENT PROPERTIES)
431 ATIVOS FIXOS TANGÍVEIS 431 TANGIBLE FIXED ASSETS
438 DEPRECIAÇÕES ACUMULADAS EM AFT 438 ACCUMULATED DEPRECIATION (TANGIBLE FIXED ASSETS)
439 PERDAS DE IMPARIDADES ACUMULADAS EM AFT 439 ACCUMULATED IMPAIRMENT (TANGIBLE FIXED ASSETS)
441 ATIVOS INTANGÍVEIS 441 INTANGIBLE ASSETS
448 AMORTIZAÇÕES ACUMULADAS 448 ACCUMULATED AMORTIZATION (INTANGIBLE ASSETS)
449 PERDAS DE IMPARIDADES ACUMULADAS EM ATIVOS INTANGÍVEIS 449 ACCUMULATED IMPAIRMENT (INTANGIBLE ASSETS)
51 CAPITAL SOCIAL 51 SHARE CAPITAL
52 ACÇÕES PRÓPRIAS 52 TREASURY SHARES
53 OUTROS INSTRUMENTOS DE CAPITAL PRÓPRIO 53 OTHER EQUITY INSTRUMENTS
54 PRÉMIOS DE EMISSÃO 54 SHARE PREMIUM
55 RESERVAS 55 RESERVES
56 RESULTADOS TRANSITADOS 56 RETAINED EARNINGS / ACUMMULATED LOSSES
57 AJUSTAMENTOS DO MEP 57 EQUITY METHOD INVESTMENT ADJUSTMENTS
58 EXECEDENTES DE REVALORIZAÇÃO 58 REVALUATION SURPLUSES
59 OUTRAS VARIAÇÕES NO CAPITAL PRÓPRIO 59 OTHER CHANGES IN EQUITY
61 CUSTO DAS MERCADORIAS VENDIDAS E DAS MATÉRIAS CONSUMIDAS 61 COST OF GOODS SOLD
62 FORNECIMENTOS E SERVIÇOS EXTERNOS 62 SERVICES AND SUPPLIES EXPENSES
63 GASTOS COM O PESSOAL 63 SALARIES AND WAGES EXPENSES
64 GASTOS DE DEPRECIAÇÃO E DE AMORTIZAÇÃO 64 DEPRECIATION AND AMORTIZATION EXPENSES
65 PERDAS POR IMPARIDADE 65 IMPAIRMENT, ALLOWANCE AND WRITE DOWN EXPENSES
66 PERDAS POR REDUÇÕES DE JUSTO VALOR 66 FAIR VALUE LOSSES
67 PROVISÕES DO PERÍODO 67 EXPENSES WITH PROVISIONS OF THE PERIOD
68 OUTROS GASTOS E PERDAS 68 OTHER EXPENSES AND LOSSES
69 JUROS DE FINANCIAMENTOS 69 INTEREST EXPENSES
71 VENDAS 71 SALES
72 PRESTAÇÃO DE SERVIÇOS 72 SERVICES RENDERED
76 REVERSÕES DE IMPARIDADES E PROVISÕES 76 IMPAIRMENT, ALLOWANCE, WRITE DOWN AND PROVISIONS REVERSAL
77 GANHOS POR AUMENTOS DE JUSTO VALOR 77 FAIR VALUE GAINS
78 OUTROS RENDIMENTOS E GANHOS 78 OTHER REVENUES AND GAINS
79 JUROS E DIVIDENDOS RECEBIDOS 79 INTEREST REVENUES
811 RESULTADOS ANTES DE IMPOSTOS 811 INCOME BEFORE TAXES
812 IMPOSTO SOBRE O RENDIMENTO DO PERÍODO 812 INCOME TAX EXPENSE
818 RESULTADO LÍQUIDO 818 NET INCOME

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