Free CIMA-F1 Exam Dumps Preview

An entity's policy is to finance the investment in working capital using short-term financing to fund all of its investment in fluctuating net current assets as well as some of its investment in permanent net current

assets.

What is this working capital financing policy known as?

Which of the following is the most appropriate definition of the term 'factoring'?

UV's financial statements for the year ended 31 March 20X8 were approved for publication on 30 June
20X8.

In accordance with IAS 10 Events After the Reporting Period, which of the following material events would have been classified as a non-adjusting event in these financial statements?

On 31 March 20X1 OP decided to sell a property. On that date this property was correctly classified as held for sale in accordance with IFRS 5 Non-Current Assets Held For Sale And Discontinued Operations.

In the draft financial statements of OP for the year ended 31 October 20X1 this property has been included at its fair value, which was $520,000 lower than its carrying value. This has resulted in a charge to profit or loss, the result of which is that the draft financial statements show a loss of $450,000 for the year to 31
October 20X1. When the management board of OP reviewed the draft financial statements it was unhappy about the loss and decided that the property should be reclassified as a non-current asset and reinstated to its original value, despite the fact that its plans for the property had not changed.

In accordance with the ethical principle of professional competence and due care, which THREE of the following statements explain how this property should be accounted for in the financial statements of OP for the year ended 31 October 20X1?

WX is considering an investment in ST.

At 31 December 20X2 ST had the following balances in its statement of financial position:

Which of the following would cause ST to become an associate investment of WX?

EFG prepares financial statements to 31 December each year. EFG has the following receivable days based on the year end receivable balances:

Which of the following would be a reason for this decrease in receivable days?

Company R use a defined benefit plan pension scheme. Employee UW has been working for Company R for 25 years. The defined benefit plan is 1.5% of the employee's annual salary during their time at the company, for every year of employment.

Employee UW started on a ?8,000 per annum salary. After 10 years of employment. Employee UW received a promotion and began earning £22,000. After another 3 years of employment. Employee UW got promoted to a wage of £35,000, and is still on this salary now.

How much pension has Employee UW accumulated since working at Company R?

Which of the following is a characteristic of a defined contribution post-employment benefit scheme?

Country X charges corporate income tax at the rate of 20% on all income irrespective of whether it is paid out as a dividend. Country Y charges corporate income tax at the rate of 25% on all income.

An entity, AA, which is resident in Country X pays a dividend of $100,000 to another entity, BB, which is resident in Country Y.

Countries X and Y have a double taxation treaty which adopts the exemption method in respect of this type of transaction.

What is BB's liability to tax in Country Y in respect of the dividend income received?

When calculating the gam chargeable to tax on the disposal of a building, which of the following would NOT be an allowable deduction?

TUV owns property that has a carrying amount greater than its original cost due to a revaluation 2 years ago. The property continues to be used by TUV up lo the date of its disposal and is sold for more than its carrying amount.

Which THREE of the following correctly describe the accounting treatment for the disposal of the property?

CDO is an entity that is preparing to apply to its local stock market for a listing. CDO is currently run by a board of ten directors, each of whom manages a department of CDO. The board is chaired by Ms E who is
also CDO's Chief Executive Officer.

Which TWO of the following actions would assist CDO to meet corporate governance regulations?

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The following information is extracted from the trial balance of YY at 30 September 20X3.

i. Included in revenue is a refundable deposit of $20 million for a sales transaction that is due to take place on 14 October 20X3. ii. The cost of closing inventory is $28 million, however, the net realisable value is estimated at $25 million. iii. The interest free loan was obtained on 1 January 20X3. The loan is repayable in 12 quarterly installments starting on 31 March 20X3. All installments to date have been paid on time.

Calculate the figure that should be included within non-current liabilities in YY's statement of financial position at 30 September 20X3 in respect of both of the loans outstanding at the year end?

Give your answer to the nearest $ million.

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QR purchased a property for its investment potential on 1 January 20X3 for $2.5 million.

The total property cost is split as follows: land $1 million and buildings $1.5 million. The buildings were expected to have a remaining useful life of 40 years.

The local property index at 31 December 20X3 indicates that the fair value of the property has risen by
10%.

What is the balance that QR will include in its statement of financial position at 31 December 20X3 for this property, assuming that it uses the IAS 40 Investment Properties fair value model?

Give your answer in $million to two decimal places.

In accordance with IAS 16 Property, Plant and Equipment, in which of the following situations would subsequent expenditure on a non-current asset be capitalised?

Which of the following is NOT a responsibility of the International Accounting Standards Board?

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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 amount of the non-controlling interest to be included in YZ's consolidated statement of financial position at 31 March 20X2.

Give your answer to the nearest whole $.

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GH's tax liability at 30 June 20X3 in respect of the tax charge on the profits for the year ended 30 June
20X3 is $876,000.

There was an over provision of $105,000 that related to the tax charge on the profits for the year ending 30
June 20X2.

What amount should be shown in GH's statement of profit or loss for the year ending 30 June 20X3?

Give your answer to the nearest $.

Which THREE of the following matters should an entity consider when determining the credit terms granted to a customer?

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PP supplies zero-rated and standard-rated goods. During the year ended 30 March 20X3, the standard-rated goods made up 50% of the total supplies. During the year ended 30 March 20X4 this percentage increased to 60%.

What percentage of input tax suffered can PP claim back in the year ended 30 March 20X4?

Give your answer as a whole number.

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LM manufactures a range of bicycles and holds an inventory of certain bicycle parts.
Part number F564 costs LM $8.00 per unit. LM expects to use 12,000 units of part F564 per year and normally orders a month's supply at a time.
Ordering costs have been calculated at $150 per order, and inventory holding costs have been estimated at $5.75 per unit per year.

The supplier of part number F564 has offered:

A 1% discount off the purchase price if each order is for 1,500 units or more.
A 2% discount off the purchase price if each order is for 2,000 units or more.
Advise LM as to which of the following quantities of F564 is most cost-effective to order at any one time.

Select THREE actions that should be taken by a business offering credit to its customers to ensure that amounts owing are collected as quickly as possible.

Which of the following correctly describes a provision in accordance with IAS 37?

What does the exemption method of giving double taxation relief mean?

Which THREE of the following actions, considered in isolation, would increase the working capital cycle of an entity?

At 31 December 20X4 the directors of MNO decide to revalue its property. Before revaluation adjustments the balances relating to property are as follows:

The property has been revalued at $1,600,000.

How much will be included within MNO's statement of financial position at 31 December 20X4 for revaluation surplus?

Which of the following would NOT be classified as part of non-current assets in a statement of financial position?

Which of the following is a feature of value added tax (VAT)?

XYZ has the following data relating to the forecast sale of goods for the quarter to 31 December 20X2:

XYZ expects trade receivables to be settled as follows:

1. 20% in the month of sale, by offering a settlement discount of 5%;
2. 30% in the month following sale, and
3. the remainder, after allowing for irrecoverable debts, in the subsequent month
4. $10,000 of the sales made in October 20X2 are expected to be irrecoverable

What is the forecast amount to be received by XYZ from trade receivables in December 20X2?

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The following data relates to Company AB.

Statement of Profit or Loss for the year ended 30 June 20X4:

During the year ending 30 June 20X4, which was not a leap year, the average stock holding period was
102 days.

Calculate the working capital cycle in days.

Give your answer to the nearest full day.

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An entity purchased an asset on 1 April 20X4 for $320,000, exclusive of import duties of $32,000.

The entity sold the asset on 31 March 20X9 for $480,000 incurring legal fees of $12,000.

The entity is resident in Country Y where chargeable capital gains are taxed at 20% and no indexation is allowed.

Calculate the amount of capital tax that the entity is due to pay.

Give your answer to the nearest whole $.

Which of the following is a type of short-term finance?

EF has been offering its customers a 60 day credit period, but now wants to improve its cash flow.

EF is proposing to offer a 2% discount for payment in 15 days.

Assume a 365 day year and an invoice value of $100.

Which of the following is the effective annual interest rate EF will incur for this action?

Which of the following would be classified as a parent and subsidiary relationship in accordance with IFRS 10 Consolidated Financial Statements?

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.

In Country X corporate income tax is levied on profits as follows:

Which of the following describes the tax rate structure in Country X?

The development of an international financial reporting standard generally goes through a number of stages.

Which of the following is NOT a stage of development?

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?

HOTSPOT

What is the correct classification of a 90-day government bond?

The following information is extracted from OO's statement of financial position at 31 March:

Included in other payables is interest payable of $80,000 at 31 March 20X2 and $73,000 at 31 March
20X1.

The following information if included within OO's statement of profit or loss for the year ended 31 March
20X2:

Included within finance cost is $124,000 which relates to interest paid on a finance lease. 00 includes finance lease interest within financing activities on its statement of cash flows.
________________ Within OO's statement of cash flow for the year ended 31 March 20X2 which figures should be included to reflect the changes in working capital within the net cash flow from operating activities?