CIMA CIMA-F1 Online Practice Questions and Exam Preparation

CIMA CIMA-F1 Online Questions & Answers

• Question 181:

  Which of the following is NOT a feature of a multi-stage sales tax?

  A. The entire tax burden is usually passed to the final consumer.
  B. Tax is charged each time a product is sold in the chain from manufacturer through to retailer.
  C. Tax is applied at the retail level only and not at production level.
  D. Credit may not be allowed for taxes paid on sales within the chain from manufacturer through to retailer.
  C. Tax is applied at the retail level only and not at production level.

• Question 182:

  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 make information more comparable.
  D. To ensure that information is consistent with its legal form.
  D. To ensure that information is consistent with its legal form.

• Question 183:

  FILL IN THE BLANK

  XY acquired 75% of the equity shares of CD on 1 January 20X2 for $230,000.

  On 1 January 20X2 CD had the following balances:

  

  XY uses the proportionate share of net assets method to value non controlling interest at acquisition.

  Calculate the goodwill arising on the acquisition of CD.

  Give your answer to nearest whole number.

  $5000

• Question 184:

  The IV Group is formed of I Ltd and its subsidiary company V Ltd. I Ltd purchased 67% of V Ltd's ordinary share capital on 31 March 20X3. The purchase cost I Ltd £129,000. At the date of purchase V Ltd's net assets were £155,000 while its share capital was £37,000. NCI fair value on the date of acquisition was

  £31,000.

  What was the amount of goodwill I Ltd paid as part of the acquisition. Calculate this figure using both the proportion of net assets method and the full good will method for valuing the non-controlling interest.

  A. Proportion of net assets method = £25,150
  B. Full goodwill method = £5,000
  C. Proportion of net assets method = £5,000
  D. Full goodwill method = £25,150
  E. Proportion of net assets method = £77,150
  F. Full goodwill method = £57,000
  A. Proportion of net assets method = £25,150
  B. Full goodwill method = £5,000

• Question 185:

  Which of the following is an example of a capital expenditure?

  A. Repairs to machinery
  B. Purchase of a delivery van
  C. Advertising costs for a new product
  D. Staff training costs
  B. Purchase of a delivery van

• Question 186:

  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. $10,000
  B. $2,000
  C. $4,000
  D. $3,200
  B. $2,000

• Question 187:

  DRAG DROP

  There are two main approaches that a country could adopt in respect of corporate governance regulation - a rules based approach and a principles based approach. Match the following statements with the appropriate approach by placing either rules based or principles based against each of them.

  Select and Place:

  

  

• Question 188:

  ST has $20,000 of plant and machinery which was acquired on 1 April 20X0. Tax depreciation rates on plant and machinery are 20% reducing balance. All plant and machinery was sold for $12,000 on 1 April 20X2. Calculate the tax balancing allowance or charge on disposal for the year ended 31 March 20X3 and state the effect on the taxable profit.

  A. A balancing allowance of $800 will increase taxable profits.
  B. A balancing allowance of $800 will reduce taxable profits.
  C. A balancing charge of $800 will increase taxable profits.
  D. A balancing charge of $800 will reduce taxable profits.
  B. A balancing allowance of $800 will reduce taxable profits.

• Question 189:

  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. North America
  B. Europe
  C. Asia
  D. Middle east
  E. South America
  F. All other segments
  B. Europe
  C. Asia
  D. Middle east

• Question 190:

  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?

  A. Separate the roles of Chair of the Board and Chief Executive Officer and appoint different individuals to each role
  B. Ensure that no part of any director's remuneration is linked to corporate or individual performance
  C. Appoint a number of non-executive directors to the board of CDO.
  D. Allow all directors to vote on their own remuneration increases
  E. Allow the Chief Executive Officer to appoint all new directors when a vacancy arises
  A. Separate the roles of Chair of the Board and Chief Executive Officer and appoint different individuals to each role
  C. Appoint a number of non-executive directors to the board of CDO.