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CIMA F1 exam is essential for anyone pursuing a career in finance or accounting. It provides a solid foundation in financial reporting and enables candidates to understand the financial health of an organization. It is also important for those seeking to progress in their career, as it is a prerequisite for the CIMA Professional Qualification.
NEW QUESTION # 52
Which of the following correctly identifies the order of the steps involved in the development of an International Financial Reporting Standard prior to it being issued?
- A. Issue an exposure draft, then set up an advisory committee and then issue a discussion document.
- B. Set up an advisory committee, then issue a discussion document and then issue an exposure draft.
- C. Issue a discussion document, then issue an exposure draft and then set up an advisory committee.
- D. Set up an advisory committee then issue an exposure draft and then issue a discussion document.
Answer: B
NEW QUESTION # 53
It costs PWR £7.50 to produce product H, per product. Product H is typically sold for £89.99. It costs
£5.00 to package product H and £15 to deliver product H to customers.
PWR is currently selling faulty versions of product H from a defunct batch, (let's call this version product I), for 25% of the original price.
Which of the below options represent the correct inventory price for product I?
- A. £3.50
- B. £20.00
- C. £2.50
- D. £7.50
Answer: C
NEW QUESTION # 54
Which of the following is the main purpose of corporate governance regulation?
- A. To protect the interests of shareholders in a quoted entity.
- B. To ensure that shareholder wealth is maximized.
- C. To ensure that financial reports are produced on a regular basis and in line with relevant regulations.
- D. To guarantee that corporate scandals do not happen in the future.
Answer: A
NEW QUESTION # 55
EF is a large manufacturing entity with several of its manufacturing sites in different locations. Currently all of the sites have a local procurement department. EF's board are looking to implement a centralized purchasing system.
Match the tokens according to whether you believe each statement is either an advantage or disadvantage of implementing a centralized purchasing system for EF.
Answer:
Explanation:
NEW QUESTION # 56
The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:
1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September
20X0.
2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.
3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.
4. PQ uses the fair value method for non-controlling interest at acquisition.
What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 31 December 20X0?
- A. $4,000
- B. $2,000
- C. $1,667
- D. $3,333
Answer: C
NEW QUESTION # 57
Which of the following is the responsibility of the International Financial Reporting Standards Interpretations Committee?
- A. To advise the International Accounting Standards Board on the agenda and priorities for future work.
- B. The development and publication of new international financial reporting standards.
- C. To provide a forum for interested parties to participate in the formulation of international financial reporting standards.
- D. To provide authoritative guidance on the application of international financial reporting standards where conflicting practice has developed.
Answer: D
NEW QUESTION # 58
The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:
1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September
20X0.
2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.
3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.
4. PQ uses the fair value method for non-controlling interest at acquisition.
Calculate the amount that will be shown as the share of profit of associate in PQ's consolidated statement of profit or loss for the year ended 31 December 20X0.
- A. $4,000
- B. $2,000
- C. $10,000
- D. $3,200
Answer: B
NEW QUESTION # 59
The following information relates to ABC.
Which of the following would be a reason for the movement in the trade receivable days?
- A. One customer who regularly took 120 days to pay their invoices stopped buying goods from ABC during the year ended 30 June 20X3.
- B. A system of early settlement discount was introduced during the year ended 30 June 20X3 which was taken up by quite a few customers.
- C. It was decided during the year ended 30 June 20X3 to stop undertaking credit checks on new customers.
- D. A new credit controller was appointed during the year ended 30 June 20X3 who has been chasing customers for payment.
Answer: C
NEW QUESTION # 60
OP has five main geographic segments and reports segmental information in accordance with IFRS 8 Operating Segments.
Which THREE of the following would be regarded as operating segments of OP in accordance with IFRS 8?
- A. All other segments
- B. Middle east
- C. North America
- D. South America
- E. Asia
- F. Europe
Answer: B,E,F
NEW QUESTION # 61
While conducting their audit, auditor 0 did not encounter issues which significantly limited the scope of their audit, however they did run into problems in that they disagreed with the management on facts in the statements.
These disagreements were somewhat material, but they did not affect the auditor's overall opinion of the business. Which of the following statements should auditor 0 issue?
- A. Emphasis of matter
- B. 'Except for' qualification
- C. Disclaimer of opinion
- D. Adverse audit opinion
- E. Unqualified report
Answer: A
NEW QUESTION # 62
The following information relates to AA.
Extract of Trial Balance at 31 December 20X4;
Notes
(i) Inventory at 31 December 20X4 was valued at cost at $30.
(ii) The loan which was received on 1 July 20X4 is repayable in 20X9.
(iii) Corporate income tax represents an over-provision of tax for the year ended 31 December 20X3. AA reported a loss for tax purposes for the year ended 31 December 20X4 and a tax refund is expected amounting to $20.
(iv) Cost of sales, administration and distribution costs need to be adjusted for the following:
What figures should be entered on the face of the Statement of profit or Loss for the year ended 31 December 20X4 in relation to Interest and Corporate income tax?
- A. Interest $25 Corporate income tax $(37)
- B. Interest $50 Corporate income tax $(3)
- C. Interest $25 Corporate income tax $37
- D. Interest $50 Corporate income tax $3
Answer: A
NEW QUESTION # 63
DE purchased an asset on 1 January 20X1 for $60,000 with a useful economic life of six years and a residual value of $3,000.
DE uses straight line depreciation for this asset.
On 31 December 20X3 the asset has a value in use of $ $28,000 and a fair value of $26,000.
Which of the following values should be used for the asset in DE's statement of financial position as at
31 December 20X3?
- A. $30,000
- B. $31,500
- C. $26,000
- D. $28,000
Answer: D
NEW QUESTION # 64
Which TWO of the following are features of a bank overdraft?
- A. Repayments are scheduled in advance
- B. The bank cannot demand repayment of the overdraft before the end of the agreed period.
- C. Interest is charged on the balance outstanding.
- D. A fixed amount of interest is determined for the period of the overdraft
- E. The amount off overdraft utilised will fluctuate according to the needs off the borrowing entity.
Answer: C,E
NEW QUESTION # 65
Which of the following is NOT a primary need for regulating financial reporting information of incorporated entities?
- A. To improve the reliability of information for users.
- B. To make information more consistent.
- C. To ensure that information is consistent with its legal form.
- D. To make information more comparable.
Answer: C
NEW QUESTION # 66
The subsidiary company of Group XY has purchased £150,00 worth of goods its parent company. However the goods purchased have yet to arrive at the subsidiary at the end of the financial year 20X4, meaning there is a disagreement in the current account balances between the parent and subsidiary.
With Group XY looking to produce its CSOFP for the end of the financial year, which of the following statements are true in relation to accounting for this disagreement? Select ALL that apply.
- A. The adjustments to resolve this disagreement, need to be accelerated, so they can be included in the consolidation of assets for the CSOFP for 20X4
- B. £150,000 will be credited into the receivables account of the parent company
- C. As the goods have not reached the subsidiary by the end of the financial year 20X4, they will be included in the CSOFPfor the next financial year
- D. £150,000 worth of inventory will be credited into the subsidiary's inventory account
- E. £150,000 worth of inventory will be debited into the subsidiary's inventory account
- F. £150,000 will be credited to the payables account of the subsidiary company
- G. £150,000 will be debited to the payables account of the parent company
Answer: A,E
NEW QUESTION # 67
Statements of financial position for YZ, BC and DE at 31 March 20X2 include the following balances:
YZ purchased 90% of BC's equity shares for $508,000 on 1 January 20X2. On 1 January 20X2 BC's retained earnings were $183,000. YZ uses the proportion of net assets method to value non-controlling interest at acquisition.
YZ purchased 30% of DE's equity shares on 1 April 20X1 for $112,000. DE's retained earnings at 1 April
20X1 were $88,000.
On 1 February 20X2 YZ sold goods to BC for $28,000 at a mark up of 25% on cost. All the goods were still in BC's inventory at 31 March 20X2.
Calculate the value of the investment in associate to be recognised in the consolidated statement of financial position at 31 March 20X2.
Give your answer to nearest whole $.
Answer:
Explanation:
$116800
NEW QUESTION # 68
FG purchased 40% of the equity shares of QR and exerted significant influence over the board of the directors.
QR will be classified as____of FG.
Answer:
Explanation:
NEW QUESTION # 69
The accounting profit before tax of an entity was $243,200 for the year ended 31 July 20X4.
The accounting profit included disallowable income from government grants of $48,000 and disallowable expenditure of $25,600 on entertaining expenses.
The entity also paid a $40,000 dividend to shareholders. The tax rates for the country were as follows:
Calculate the tax the entity is due to pay for the year ending 31 July 20X4.
- A. $44,160
- B. $57,546
- C. $47,840
- D. $39,174
Answer: C
NEW QUESTION # 70
Which THREE of the following are included within an entity's statement of profit or loss?
- A. Dividends paid
- B. Finance income
- C. Impairment loss
- D. Revaluation surplus
- E. Dividends revived
Answer: B,C,E
NEW QUESTION # 71
Statements of financial position for YZ, BC and DE at 31 March 20X2 include the following balances:
YZ purchased 90% of BC's equity shares for $508,000 on 1 January 20X2. On 1 January 20X2 BC's retained earnings were $183,000. YZ uses the proportion of net assets method to value non-controlling interest at acquisition.
YZ purchased 30% of DE's equity shares on 1 April 20X1 for $112,000. DE's retained earnings at 1 April
20X1 were $88,000.
On 1 February 20X2 YZ sold goods to BC for $28,000 at a mark up of 25% on cost. All the goods were still in BC's inventory at 31 March 20X2.
Calculate the value of the investment in associate to be recognised in the consolidated statement of financial position at 31 March 20X2.
Give your answer to nearest whole $.
Answer:
Explanation:
$116800
NEW QUESTION # 72
YZ has $40,000 of plant and machinery which was acquired on 1 June 20X1.Tax depreciation rates on plant and machinery are 25% reducing balance. All plant and machinery was sold for $24,000 on 1 June 20X3.
Calculate the tax balancing allowance or charge on disposal for the year ended 31 May 20X3 and state the effect on the taxable profit.
- A. A balancing charge of $1,500 reduces taxable profit.
- B. A balancing allowance of $1,500 increases taxable profit.
- C. A balancing allowance of $1,500 reduces taxable profit.
- D. A balancing charge of $1,500 increases taxable profit.
Answer: D
NEW QUESTION # 73
EF purchased an asset on 1 September 20X4 for $800,000, exclusive of import duties of $30,000. EF is resident in country Y where indexation is allowed on purchase costs when the asset is disposed of.
EF sold the asset on 31 August 20X9 for $1,500,000 incurring transaction charges of $20,000. The indexation factor increased by 40% in the period from 1 September 20X4 to 31 August 20X9.
Capital gains are taxed at 30%.
What is the tax due on disposal of the asset?
- A. $108,000
- B. $95,400
- C. $102,600
- D. $101,400
Answer: B
NEW QUESTION # 74
Which of the following is not a possible tax rate structure?
- A. Progressive
- B. Regressive
- C. Proportional
- D. Direct
Answer: D
NEW QUESTION # 75
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Preparing for the CIMA F1 exam requires dedication and hard work. Candidates need to have a strong foundation in financial accounting, management accounting, and business mathematics. There are various study materials available to help candidates prepare for the exam, including textbooks, online courses, and practice exams.
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