CIMA CIMA-F1 Online Practice Questions and Exam Preparation

CIMA CIMA-F1 Online Questions & Answers

• Question 141:

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

  A. The amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.
  B. The employer would make additional contributions into the scheme if the actuary predicted a shortfall in the funds available to pay post-employment benefits.
  C. The amount of the post-employment benefits paid to former employees is determined at the date of their retirement using a predefined formula.
  D. The employer may take a contributions holiday and stop paying contributions for a period, if the scheme's assets appear to be more than are required to meet the scheme's obligations.
  A. The amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.

• Question 142:

  Which THREE of the following statements are NOT true of the IFRS Foundation trustees?

  A. Are involved in the technical matters relating to accounting standards
  B. Are mainly from Europe and the USA
  C. Receive funding by donations from the general public
  D. Responsible for appointing members of the IA5B
  E. Responsible of appointing members of the IFRS interpretations committee
  A. Are involved in the technical matters relating to accounting standards
  B. Are mainly from Europe and the USA
  C. Receive funding by donations from the general public

• Question 143:

  Which of the following would be the most immediate impact of overtrading?

  A. An inability to pay trade payables.
  B. Having to offer bulk discounts to customers.
  C. An inability to pay dividends to shareholders.
  D. A shortage of inventory
  A. An inability to pay trade payables.

• Question 144:

  When developing local Generally Accepted Accounting Principles (known as local GAAP) some countries start with International Financial Reporting Standards (IFRSs) which are then amended to reflect local needs and conditions. This type of approach is classified as:

  A. Adoption of IFRSs as local GAAP.
  B. Using IFRSs as a model for local GAAP.
  C. IFRSs having a persuasive influence in formulating local GAAP.
  D. IFRSs having little or no impact in formulating local GAAP.
  B. Using IFRSs as a model for local GAAP.

• Question 145:

  Which of the following best describes the purpose of depreciation?

  A. To accumulate funds for asset replacement.
  B. To allocate the cost of an asset over its useful life.
  C. To reduce tax liabilities.
  D. To adjust the value of assets to their market value.
  B. To allocate the cost of an asset over its useful life.

• Question 146:

  FILL IN THE BLANK

  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 goodwill arising on the acquisition of BC.

  Give your answer to the nearest whole $.

  $118300

• Question 147:

  KL has S90.000 of plant and machinery which was acquired on 1 June 20X4. Tax depreciation rates on plant and machinery are 20% reducing balance. All plant and machinery was sold for 560,000 on 1 June 20X6 Calculate the tax balancing allowance or charge on disposal tor the year ended 31 May 20X7 and state the effect on the taxable profit.

  A. A balancing allowance of $2,400 reduces taxable profit.
  B. A balancing charge of $2,400 reduces taxable profit.
  C. A balancing charge of $2,400 increases taxable profit.
  D. A balancing allowance of $2,400 increases taxable profit.
  C. A balancing charge of $2,400 increases taxable profit.

• Question 148:

  A building was purchased on 1 January 20X1 for $300,000 and had a useful economic life of 40 years. On 1 January 20X5 the building was revalued by a professional surveyor at $450,000. Directors decided to incorporate the revalued amount into the financial statements.

  The accounting entries to record the initial revaluation of the building in the financial statements for the year ended 31 December 20X5 will be to debit building cost $150,000 and then:

  A. credit accumulated depreciation $37,500 and credit revaluation reserve $112,500.
  B. credit accumulated depreciation $30,000 and credit revaluation reserve $120,000.
  C. debit accumulated depreciation $30,000 and credit revaluation reserve $180,000.
  D. debit accumulated depreciation $37,500 and credit revaluation reserve $187,500.
  C. debit accumulated depreciation $30,000 and credit revaluation reserve $180,000.

• Question 149:

  FILL IN THE BLANK

  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 profit attributable to the non-controlling interests disclosed in PQ's consolidated statement of profit or loss for the year ended 31 December 20X0.

  Give your answer to the nearest whole $.

  $8000

• Question 150:

  The following data has been extracted from GH's accounting records:

  

  What is GH's average inventory days for the year ended 31 March 20X3?

  A. 39 days
  B. 43 days
  C. 25 days
  D. 28 days
  A. 39 days